Including Statistical Analysis Into Your Employment Litigation Risk Management Plan

Well over 95% of civil litigation cases settle. Many settle after expensive discovery, all too often on the eve of trial; but many times the parties know or could have readily learned most of the key facts relevant to the dispute without incurring much of this expense. Litigants often can achieve better case resolutions earlier, and dramatically reduce litigation expenses, through disciplined case management and rigorous early case evaluation. Use of a structured approach for evaluating cases - litigation risk assessment - is the key to this process.  - PerkinsCoie
What is an employment litigation risk management program? Perkins Coie has a good summary of what a litigation risk management program includes; this summary can be found here. Typically, a litigation risk assessment contains the following items:

  • Introduction and Recommendations;
  • Summary of Facts;
  • Case Status;
  • Legal Analysis;
  • Strengths and Weaknesses;
  • Budget;
  • Possible Results and Probabilities;
  • Conclusions and Recommendations.

In short, a litigation risk assessment is intended to provide management with a concise evaluation of the risks and costs associated with litigation. What is the value of an employment litigation risk management program? Benefits include:
  • significant reductions in the number of pending cases. Dockets may be reduced by half or more as cases are aggressively evaluated early in the process;
  • significant reductions in the overall expense of litigation, including both payouts and attorneys' fees and expenses. Again, reductions of 50% or more are not uncommon;
  • reduced discovery expenses. By placing the need for discovery in the full context of the case, litigants can better prioritize or even eliminate some of the most expensive discovery such as depositions;
  • improved ability of business units to make informed settle-or-litigate decisions;
  • improved ability to settle disputes creatively, such as through an exchange of goods or services;
  • improved ability to evaluate the performance of both inside and outside counsel;
  • increased ability to identify the causes of litigation and to take countermeasures to avoid similar claims.
One additional component that may be added to a litigation risk assessment, depending on the nature of the matter, is a statistical analysis. For example, in a class action discrimination matter, a statistical analysis can be used to:

  • address class certification questions, such as commonality and typicality;
  • evaluate the merits of the claim(s);
  • provide exposure estimates for damages under the assumption that liability will be found;
  • assist in the identification of the underlying causes of the litigation;
  • assist in the design of countermeasures and evaluate the effects of the countermeasures.

Incorporating a statistical analysis into your litigation risk assessment can provide a more informative assessment of the matter, enabling business units to make better decisions.