Dealing With Damages

By R. Craig Smith and Chris Dominic

In an article published in the Wall Street Journal in 1994, Theodore B. Olsen, an advocate of punitive damage reform, opined that “[p]unitive damages have replaced baseball as our national sport.” He suggested that the system is “a perverse combination of lottery and bullfighting, selecting beneficiaries and targets almost at random.”

In the subsequent decade, because of a growing perception of “out of control” damage awards, a number of reforms have been both suggested and implemented with varying degrees of success and with a surprising lack of uniformity or consistency. The question of damages, particularly punitive damages, remains somewhat of a mystery to most attorneys in spite of a great deal of empirical research that has been conducted in an effort to understand how and why juries behave the way they do when faced with decisions about monetary awards related to their verdicts.

Before taking any civil case to trial, attorneys on both sides must weigh carefully the risks inherent in the jury decision-making process, particularly as they relate to damage awards. Any pre-trial discussions of damages, from the initial demand letter to settlement or mediation, must be conducted with an understanding that, should the case ultimately end up in the hands of a jury, arguments by both sides may be seen very differently by jurors who are neither parties or counsel to the matter at hand and who may have decidedly different views about monetary awards.

Pre-trial risk assessment and analysis requires an understanding of what influences are at play when six, eight, or 12 people go into a room to decide how much a case is, or is not, worth. And while liability issues may be easier to prove or disprove, it is often more difficult, even after a weighty verdict, for jurors to translate the effect of their decision into a dollar amount, particularly damages that reach beyond quantifiable actual or compensatory damages.

Thus, in addressing damages, whether pre-trial, or in the courtroom, ultimate consideration should be given to how a jury might perceive the evidence presented from both sides, and what other factors will be brought to the table during the decision making process.

While the bulk of recent reform efforts have been largely aimed at punitive damages, questions relating to damages across the board still remain. It is interesting to observe the wide range of approaches taken by attorneys when they reach that point in trial when they must ask a jury to compensate a plaintiff client, or to demonstrate to the jury why plaintiff’s numbers are unreasonable. For the purposes of this article, three distinct areas of damages have been considered: economic; non-economic; and punitive damages.

Economic Damages

It is not surprising to most attorneys that economic damages are generally the easiest for a jury to calculate or define. This is clearly due to the tangible nature of the damages. There are medical records and bills, income related documents, expenses and costs that can be documented, and a myriad of other tangibles that can demarcate loss. However, even here, where the paper trail appears quite clear and indisputable, plaintiff attorneys, being generally more aggressive and target-dollar oriented than defense counsel, continue to come up with innovative new ways to “create” a record reflecting numbers far in excess of what the circumstances and facts of the case might actually represent. A soft tissue injury, for example, supported by extensive bills for physical therapy, medications and even psychological or emotional rehabilitation may far exceed that which, given the nature of the injury, a reasonable jury would anticipate. It is left to the jury then to decide whether claimed treatments and expenses are credible and recoverable, or whether they simply reflect an effort to inflate the value of an otherwise inadequate claim.

Non-Economic Damages

Non-economic damages are an altogether different matter. Placing a monetary value on human experience, loss, pain and/or suffering, requires attorneys to step out of the quantitative world, whether accurate or inflated, into a qualitative realm that is filtered and tempered by the individual life experiences and perceptions of a group of unique individuals who make up a jury. Huge damage awards for pain and suffering, as reported in the media, have created a perception to many that jury trials are random and excessive. Actual research in this arena has found that juries are reasonable, consistent, and unsurprising at determining the severity of injury to the plaintiff or plaintiffs. However, juries vary greatly in the dollar amount they deliver for similar injuries incurred in comparable ways. Regardless of the side you’re on, the key to getting jurors to affirm your position, is to present damages in ways that are understandable, manageable and, above all, familiar to lay jurors.

When it comes to pain and suffering, most plaintiff attorneys feel a need to place a finite number in front of the jury when asking for damages. This is most commonly referred to as the “anchor.” The number is, more often than not, more in line with the attorney’s target-dollar objective than with reality, and the prevailing assumption is that if you ask for a higher number; you’ll likely get a higher award. While this tactic can be effective when facing a defense attorney who refuses to argue damages, you give the “voice of reasonability” to the defense attorney who can skillfully argue damages. One alternative to this approach is to give the jury a formula that, on its face, is very down to earth, but one that will let jurors arrive at their own number, often greater than what would be spelled out for them in closing argument.

In a recent case where a plaintiff had lost the majority of the fingers on his dominant hand in a table saw accident, attorneys initially planned to ask the jury for $250,000. It was proposed, as an alternative, that instead of asking for a fixed amount, that the attorneys suggest to the jury that the loss of use of one’s dominant hand and the daily struggle of having to deal with the difficulties of being unable to complete even simple tasks such as tying his shoes or cutting his food at the dinner table, could be quantified on a simpler scale. The stares and questions of others who would see his disfigurement every time he was out in public and the impact of the loss on his work as a carpenter, his self esteem and his relationship with his wife was certainly worth something. Instead of speaking in terms of a quarter of a million dollars, however, the attorneys would suggest a formula that an average person might easily understand and identify with, one that put a daily number on the loss. The attorney would suggest that $500 per day would not be unreasonable, but certainly, at the very least, $100 per day was merited by the loss. Then the attorney asked the jury to consider that this individual had a life expectancy of 25 to 40 years, and to do the math themselves. At the minimum of $100 per day, which every juror could deal with, and considering a minimum life expectancy of 25 years, the jury would arrive, on their own, at a figure approaching $1 million. Presenting damage arguments in a way that jurors can understand and manage is usually better than pulling a number out of the air. This is particularly so when it comes to pain and suffering.

Punitive Damages

Punitive damages are the most difficult to deal with because the underlying purpose of punitive damages is not simply money. Punitive damages are awarded for punishment and deterrence. Meeting the burden of proving that the behavior was “outrageous” because of an evil motive or reckless indifference to the rights of others is a challenge. Although many people believe that punitive damages are awarded routinely, Bureau of Justice Statistics report that punitive damages are only awarded in four percent of cases where liability was found. Furthermore, half of the punitive damage awards were for less than the amount of the compensatory damages.

One of the important factors in regard to punitive damages, as reported by Jennifer K. Robbennolt, J.D., PhD in Buffalo Law Review 103 (2002), “Determining Punitive Damages: Empirical Insights and Implications for Reform,” is that they are sensitive to variables such as the degree of harm risked or suffered, the outrageousness of the defendant’s conduct and especially by the financial status of the defendant. “In particular,” she notes, “jurors appear to be influenced by media reports of high awards in complex ways, their intuitions about punishment emphasize retribution to the neglect of deterrence considerations, they have difficulty mapping their punishments onto a dollar scale, and they have difficulty understanding the legal instructions.” The last of these observations has been demonstrated time and time again in both mock trial research and in post trial research and evaluation, leading to the conclusion that not enough consideration is given by attorneys to designing and explaining jury instructions that are clear and understandable.

Attorneys tend to assume that jurors take the time to fully understand and adhere to their instructions absent emphasis from the attorney presentations. There is good research that absent effective communication from the bench or attorneys, jurors may have vastly different perceptions of jury instructions to the point of disregarding them entirely.

In consideration of the aforementioned assumptions, there are several variables that go into pre-trial and trial risk assessment of damages, including:

Case characteristics: We have learned that early in the case process, the nature of the case, including the severity of the harm caused, the degree of outrageousness of the behavior of the defendant, and the wealth and/or resources of the defendant are foundational issues that must be taken into consideration. Research suggests, for example, that jurors hold corporations and professional entities and individuals to a higher standard of conduct because they are perceived as having greater knowledge, expertise and resources, all of which should reduce the likelihood of inappropriate behavior.

Venue: Community and group attitudes and perceptions about the civil litigation system in general, and how damage awards will impact both the community and the litigation process as a whole also influence the decision making process. Community attitude surveys and mock trial research can help to identify and define attitudes and perceptions that may directly affect decisions reached about damages.

Motivation: It is important to try to understand what jurors may hope to accomplish by their decisions regarding damages, particularly punitive damages. Empirical studies suggest that jurors are typically interested in “sending a message” to a defendant but are rarely interested in crippling or destroying them. This is consistent with the general motivation of juries to “solve a problem.” Depending on the nature and severity of the injury or loss, jurors will tend to award higher damages in order to punish than if their motive is simply to deter future similar behavior.

Individual juror attitudes: Jurors who perceive there to be a crisis in litigation, who believe, as Theodore Olsen has suggested, that civil litigation is out of control-a lottery-tend to award lower damages. Others, who feel that big money, corporations and power entities that oppress the “little guy” tyrannize the litigation process tend, instinctively, to view higher damage awards as a remedy for the common man. The tendency to want to punish and to heal is greater, in these individuals, than a desire to rectify and deter errant behavior.

There is no exception to this pattern of behavior in Washington. Tsongas Litigation Consulting’s 2003 Juror Attitude Study of found that 29% of Washingtonians answered that they “strongly agreed” with the statement, “Forcing corporations to pay high damage awards in court is a good remedy for corporate misconduct.” This is in comparison with: 36% that reported that they “slightly agreed,” 19% that “slightly disagreed,” and 16 % “strongly disagreed.”

Group dynamics: Research suggests that the dynamics of the deliberation process itself is an important factor in determining damage awards in almost every kind of civil litigation. Jurors, acting collectively, often tend to award higher and less variable damages than the same jurors would award if acting independently.

Pre-trial research in the form of mock trials will identify the disparities between individual jurors as well as compromises that are reached within the group, and can reveal individual and group attitudes that may have a significant effect on the ultimate decisions regarding damages. Such pre-trial exercises can also identify subtle attitudes and prejudices that, in the deliberation process, may surface to undermine logic and reason, and help attorneys to create a more accurate high-risk juror profile to be used in jury selection in the actual trial.

Characteristics of the decision makers: The make-up of the jury in regard to attitudes, experiences, and demographics is something that must be considered not only in the context of whether or not the jury will return a favorable verdict, but what, monetarily, they will do with that verdict once arrived at. Therefore, pre-trial juror questionnaires, voir dire and jury selection must be conducted not only with the objective of seating a jury that will reach the desired verdict, but one which will also have the ability to translate that decision into a competitive, monetary advantage.

Jury instructions: As suggested earlier, jurors often have more difficulty than attorneys tend to assume in understanding and applying the court’s instructions on the law. Mock trial research has demonstrated, that the ability to recall, and the willingness to consider each element of the instructions provided is consistently lower than desired. Juries spend less time discussing the admonitions and legal instructions and more time focusing on who did what to whom and who should pay. Jury instructions often identify what the legal issues are, but are less clear about the process of implementing and applying the instructions. An attorney’s willingness and ability, therefore, to spend the time in closing argument to help jurors understand both the substance and the importance of the instructions cannot be underestimated.

Jurors, many of whom are participating in the trial process for the first time, bring to their deliberations a wide range of competencies, as well as personal experiences and perceptions that frame their attitudes and information processing preferences. Since the end result of the vast majority of civil suits will be ultimately defined monetarily, understanding the many factors that influence the decision making process of jurors as they deal with damages is an imperative. From pre-trial risk assessment, to jury selection, to the words and methods used to define what the jury is asked to do on damage issues, careful consideration of the factors identified above, as well as many others, can lead to more predictable and satisfying results.

Chris Dominic is President of Tsongas Litigation Consulting. Since 1997, Dominic has worked on numerous high profile cases across the country. Dominic has spoken at seminars on case strategy, jury selection, litigation graphics, and jury decision-making.