Settle or go to trial?

Note: This is the last of four blog posts devoted to Week 5/Module 5 of my business law summer course.

This week, we are exploring civil and criminal cases, and I devoted my previous post to the ideal of “due process of law”, the single-most important procedural ideal of our legal system. Personally, for example, I think Joe Exotic’s criminal conviction should be commuted by President Trump, but due process is not about outcomes; it is about the way people are treated by the legal system, and Joe Exotic was tried by a jury of his peers and given the opportunity to defend himself against the charges against him. (As for Carole Baskin, the docuseries Tiger King raises many legitimate questions about her role in the disappearance of Don Lewis, but legally speaking Mrs. Baskin is not required to prove her innocence. Instead, it is up to the accusing party to bring formal charges or file a civil complaint and to prove his or her case in a court of law.)

But, in reality, Joe Exotic’s jury trial was an extremely rare event. How rare? As we saw in a previous post, most criminal cases result in plea bargains, not jury trials, and likewise, most civil cases settle out of court. (And when I say most, I mean over 98% of all civil and criminal cases, State or federal.) I thus devote the last part of my module on civil and criminal cases to a strategic question that all litigants–civil or criminal–must eventually contend with: when should you cop a plea or settle out of court, and when should you go to trial?

First off, recall from a previous post that going to trial, especially in civil cases, is costly and time-consuming because of the discovery process. But cost is just one part of the settle-or-go-to-trial equation. The other key variable is uncertainty. That is, even if you have all the time and money in the world to fight your case in court, do you really want to take your chances with a jury?

This is not a rhetorical question. Whenever a case goes to a jury, it is next to impossible to predict with any degree of certainty what the outcome of that case will be. Why? Because of another aspect of due process: the burden of proof. In a criminal case, for example, the prosecution must prove its allegations beyond a reasonable doubt, a demanding standard of proof. Even in civil cases, where the plaintiff’s burden of proof is much lower (preponderance of the evidence or “more likely than not”), the defendant is still able to prevail in the case of tie, i.e. if the jury believes the defendant as much as it believes the plaintiff.

If you want to go deeper into these strategic questions, you may have to pay Google Scholar a visit or read my textbook chapter on “Strategic Aspects of Litigation & Settlement.” For now, it suffices to say that the interplay between these two variables–cost and uncertainty–are the main reason why so many civil cases settle out of court and why so many criminal cases end up in plea bargains. FYI: Next week, we will conclude our summer survey course by taking a closer look at ethics, including natural law, animal rights, and business ethics. In the meantime, I will resume my review of Tyler Cowen’s “Love Letter to Big Business” in my next few blog posts.