February 2014 Bar Bulletin
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February 2014 Bar Bulletin

The Fairness Paradox: Mind Shouldn't Matter

By Fredrick D. Huebner


"I like not fair terms and a villain's mind."
-The Merchant of Venice
Act I, Scene 3

We are of two minds about fairness when we go to settle a dispute. We truly want any settlement to be seen by our clients as fair. We also want the money paid or a serious adverse result avoided.

I submit that in the settlement conference you will find some working knowledge of behavioral economics and game theory about "fairness" a better tool than that copy of John Rawls' A Theory of Justice you haven't read since the 3L seminar. The Fairness Paradox, or Fairness Trap,1 is a cluster of three client behaviors in which excessive focus on "fairness" leads to an economic result for the client that is worse than they might otherwise have obtained.

Each of these behaviors and some strategies for coping with them are suggested below.

Identity Bias

When one party hates or devalues the other because of who they are, that party is often unable or unwilling to recognize and accept objectively fair terms in settlement. A person afflicted with identity bias thinks that the person he does not like cannot make a fair deal, so any deal offered must, by definition, be unfair and therefore unacceptable, even if it is economically advantageous.

The goal for both counsel (and their mediator or settlement judge, when they become involved) should be to diminish and debunk identity bias during case preparation. This is common sense, not rocket science.

Don't treat or describe the opposing party as "the other" - another race; another ethnicity; another culture; a greedy, no-good plaintiff who never worked an honest day; or a corporation that exists to suck the blood from the public. Emphasize common humanity. Corporations aren't people, but they are run by people prone to human frailty and capable of making good on a corporate wrong.

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