Confidence Bias

Allen Schreiber • November 9, 2020
Allen Schreiber, Birmingham Arbitrator and Mediator

Eighty percent of professional truckers believe they are safer than average, and 94% of college professors think they are above average. Obviously, this cannot be true!


Lawyers and litigants tend to suffer from the same fate - having overconfidence in their likelihood of success. In fact, 64% of attorneys who were asked to predict outcomes at trial were overconfident in their prediction of their success (Goodman-Delahunty, Insightful or Wishful: Lawyers’ Ability to Predict Case Outcomes).


The 2008 Randall Kiser Study, released in the Journal of Empirical Legal Studies, found that parties who reject the “last and best offer” at mediation overwhelmingly regret the decision. The study, which surveyed thousands of cases in California and New York over a five-year period, concluded that plaintiffs who rejected the last settlement offer and proceeded to trial do worse a whopping 61% of the time, while defendants did worse than their last offer 24% of the time. In only 15% of the cases did both sides obtain a better result at trial.

Not all is good news for defendants, however. Although they may statistically do better at predicting outcomes, the 24% of the time the defendants are wrong ends up being much more costly to them. Defendants who fail to do better than the plaintiff’s last demand ended up with a verdict that was on average $1.1 million more than the plaintiff’s last demand. On the other hand, plaintiffs received on average $43,000 less than the last offer given before trial.


Every experienced and honest litigator can point to cases they won when they didn’t think they had a chance of winning. Simultaneously, they can point to times when, “if there was any justice” they would have won, but lost. There simply is no way to accurately predict with absolute certainty the outcome of a litigated case, whether decided by a judge, a jury, or an arbitrator.


In mediation, the parties who consistently acknowledge, understand and actively work to address their biases have the best results. An open mind is often the best tool any attorney has to facilitate a resolution.

Schedule your next ADR session via our convenient online calendar, or call Carol Waldrop at 855-754-8807.