Predicting Risk is the Essence of Good Lawyering

Trial advocacy is often dramatized in movies and television. We see persuasive lawyers depicted in emotional closing argument scenes and intense lawyers in those “gotcha” moments of searing cross-examination. But truly great trial lawyers have a skill not seen in the courtroom, let alone on the silver screen: the ability to predict the outcome of a trial before it starts.

Clients come to lawyers asking simple questions about complicated problems:
What is the risk? What are my chances? Do I have a case? Clients want to know
what will happen to them if they proceed through trial. And they should be
worried, according to the late Oliver Wendell Holmes, Jr.,
because the power of the state to enforce court judgments and degrees
is looming over every trial. Prediction, said he, is the object of the
study of law:

When we study the law… we are studying what we
shall want in order to appear before judges, or to advise people in such a way
as to keep them out of court. The reason why it is a profession, why people will
pay lawyers to argue for them or to advise them, is that in societies like ours
the command of the public force is intrusted to the judges in certain cases, and
the whole power of the state will be put forth, if necessary, to carry out their
judgments and decrees. People want to know under what circumstances and how far
they will run the risk of coming against what is so much stronger than
themselves, and hence it becomes a business to find out when this danger is to
be feared.The object of our study, then, is prediction, the prediction of the
incidence of the public force through the instrumentality of the courts. (The
Path of the Law, 10 Harvard Law Review 457 (1897))

A recent California Court of Appeals case exemplifies both the power of the state to enforce judgments and the important
role of risk analysis in civil litigation, and it also stands for an important principle of law, which I will address first.

In Gunderson v. Wall, a jury awarded plaintiff $1.7 million in compensatory damages
and $800,000 in punitive damages against Wall and Welded Fixtures, Inc. The
defendants paid the judgment and filed an appeal. In a November 2009
unpublished opinion, the Court of Appeal affirmed the compensatory
damages award, but ruled there was insufficient evidence to support the punitive
damages. (Click here to read the unpublished opinion.) The plaintiff voluntarily repaid the $800,000,
representing the punitive damage award. However, the defendants filed a
motion in the trial court seeking restitution of the interest that had
accrued on the punitive damage payment during the time of the appeal. The trial
court denied the motion, finding the defendant acted inequitably in response to
plaintiff’s post-judgment efforts to collect the judgment. Defendant filed an
appeal, and the court of appeal affirmed the decision not to reimburse the
defendants the accrued interest. As a result of this case, parties need to be
certain they have acted reasonably in the post-judgment process if they intend
to ask the court for equitable considerations, such as repayment of interest on
a reversed judgment.

The Gunderson opinion and its unpublished companion opinion provide some practical insight into Justice
Holmes’ statements about the power of the state over litigants and the
importance of risk analysis, or prediction.

Will you proceed through trial for the chance of being awarded punitive
damages? In California, you will have to prove by clear and convincing evidence
that someone committed malice, oppression, or fraud, and if you have a corporate
defendant, that a corporate officer or managing agent was involved in the
misconduct (Civil Code 3294). The jury will probably be instructed that
plaintiff must prove the conduct was despicable which means conduct that was so
vile, base, contemptible, miserable, wretched or loathsome that it would be
looked down upon and despised by ordinary decent people. In Gunderson,
the jury awarded punitive damages, but the appellate court said there was
insufficient evidence to support the award.
Your risk analysis should consider the impact of potential motions in limine
on the evidence you intend to introduce at trial. In the 2009 Gunderson
opinion, for example, one of the defendants asserted his fifth amendment
right against self incrimination. The trial court then issued an order that
precluded the defendant from presenting any evidence or cross-examining any
witnesses at trial. This order was reversed on appeal, giving the defendant the
right to a new trial. This also brings up the need for predicting the likelihood
and expense of an appeal and a second trial.
Gunderson used the power of the state to enforce the original judgment which
included writs of execution and the installation of a receiver at defendant
Welded Fixtures. The court also issued a writ of body attachment requiring
defendant Wall to personally appear to answer questions about the loss of
computers and financial data at Welded Fixtures.
Prediction, then, is an important element in the practice of law. It is not
enough, however, to merely predict the outcome of the trial. Each aspect of the
trial has parts and subparts that must be analyzed, including the possibility of
an appeal and a new trial, the costs and time associated with the litigation,
and the likelihood of collecting the judgment. Trial lawyers who analyze and
explain these risks to their client are the best of the best. They are true
counselors at law and trusted advisers to their clients.