Jury Economics: Requests for damages are anchoring strategies for plaintiffs and defendants
By Thomas M. O’Toole and Kevin R. Boully
A lot has been written over the last few years about the rise of “nuclear verdicts.” Reasons range from the rise of the millennial majority in jury boxes to inflation and distrust in society’s institutions. There are many explanations, all of which have contributed to the inflationary trend in noneconomic awards, but one simple explanation is anchoring. Anchoring is a strategy typically deployed by plaintiffs’ attorneys where they ask for numbers well beyond what they believe the jury will award with the expectation that the net effect will be an amount larger than what the jury would have otherwise awarded absent the anchor. For example, if attorneys know the jurors are most likely to “split the baby,” a $30M damages request will produce a larger award than a $20M request.
The empirical research on jury damages awards is replete with findings on the effectiveness of anchors. For example, a 2017 study out of Washington University examined two scenarios for a medical malpractice case, one in which no amount was suggested by the plaintiff and the other where the plaintiff specifically asked for $5M. Without the influence of an anchor demand, the mock jurors in this study awarded an average of $473K. With the anchor request, the average shot up to $1.9M. That is a significant effect with the anchor quadrupling the award.
While anchors are nothing new, we have seen an inflationary trend in the anchor amounts suggested by plaintiff attorneys across the country over the last few years. Emboldened by headlines about monstrous jury awards and this empirical research, plaintiffs’ attorneys are understandably asking for larger numbers with some requests entering the realm of the obscene. A decade ago, trials where the plaintiffs asked for numbers in the hundreds of millions or billions were sparse. In the past few years, they seem to be common, certainly from what we have seen in our practice.
We regularly witness the impact of these “absurd” damages requests in our jury research. In a recent mock trial in an admitted liability case, the attorney asked for $175M for a plaintiff who suffered several broken bones and a mild traumatic brain injury. 83% of the mock jurors indicated in their questionnaires they thought the plaintiff was asking for too much money. During deliberations, there were numerous comments about the absurdity of how much the plaintiff was requesting, yet the three mock juries all awarded damages in excess of $40M, which was well above what the defendant expected. The mock jurors’ criticism of the plaintiff’s extraordinary request had little impact on their awards. In this respect, these seemingly outrageous damage requests are a lot like political ads: everyone hates them, yet they work.
So, what are the lessons we have learned from our jury research in recent years. The first lesson that might stand out is that plaintiff attorneys should have no fear asking for “outrageous” numbers in closing argument, but that is not necessarily true. It depends on the strength of the liability arguments in the case. In cases where liability is admitted (or should be admitted because of the strength of the evidence), our research shows that there are virtually no limits on what the plaintiff attorney can ask for. As long as they have the admission or the evidence to leave jurors with no question about the defendant’s liability, there seems to be no downside to asking for outrageous numbers.
However, where the defense has reasonable arguments on liability or evidence of contributory negligence by the plaintiff, we have found that outrageous damages requests can backfire. The reason is that in these cases, the jurors have a reasonable path they can take in deliberations that is critical of the plaintiff. Visceral reactions to absurd damage requests can trigger jurors and motivate them to focus more on criticizing the damages strategy than on other more pro-plaintiff issues in the case. In admitted liability cases, there seems to be no consequence for jurors believing the plaintiff is overreaching on damages, but in disputed liability cases where the defense has reasonable evidence, beliefs about overreaching can generate skepticism that hurts the plaintiff on liability and apportionment. Consequently, plaintiff attorneys should carefully evaluate the strength of their liability case when determining how high they want to set the anchor for damages in closing argument.
Where does this leave defendants? The first and most obvious answer is counter-anchoring, which any experienced defense attorney already knows and understands. The research on efforts by defendants to counter-anchor is equally strong. In 2020, Sound Jury Consulting conducted a large national study involving thousands of mock jurors on damages, nuclear verdicts, and the effectiveness of defense strategies in managing these. Using a motor vehicle accident case, it found that the average damage award decreased by $10M when the defense provided an alternative damage figure of $2M compared to when it offered no alternative damage figure at all. Other research has demonstrated similar findings showing that alternative damage anchors are effective.
This might lead defense attorneys to conclude they should always offer an alternative damage number, but there are downsides to doing so. First and most important is that many jurors perceive alternative damage awards suggested by the defense as admissions of fault. These jurors are quick to assume the alternative damage suggestion is “what the defense is willing to pay,” which leads them to conclude the defense believes it has liability in the case. Unfortunately, the standard speech about how it is the job of the defense attorney to address all issues in the case does not solve this problem. Some jurors are adamant that a defendant that does not believe it is liable would never suggest an alternative amount to give to the plaintiff at trial.
We have not been able to find any research studies on this issue, but one strategy defense attorneys might consider is raising this issue in voir dire and asking venire members if there is anyone who would be quick to assume the defense is admitting liability if it suggests and alternative damage award. This provides an opportunity for good discussion (and education) on this issue early in trial while also potentially identifying high-risk jurors for the defense so it can use peremptory strikes on those jurors who would see it as an admission of liability.
Another downside to alternative damage anchors by defendants has to do with their arbitrary nature. Too often, the alternative numbers thrown out by the defense are seen as nothing more as an attempt to “lowball the plaintiff” or “pay as little as possible,” which can frustrate jurors. Consequently, while the alternative anchors have the effect of lowering the overall award, often the final awards are still well above the range the defense had in mind. Defendants are often understandably unsatisfied with verdicts that award the midpoint of the plaintiff and defense anchors. After all, the plaintiff can always ask for more, but the defense has a clear floor. So how can defendants magnify the impact of their alternative damage anchor? The key is in the presentation.
Defense attorneys should offer jurors alternative damage frameworks, not just alternative damage numbers. The difference is that the former gives jurors a formulaic way of thinking about the process of awarding damages, and jurors love formulas. If defendants can influence the process jurors use to determine the damages award, they can exert much greater influence over the final award. Let’s look at an example with an admitted liability, personal injury case where outrageous anchors by a plaintiff are very effective. In these cases, defense attorneys should reframe the central question on damages, telling jurors the key question is “how can money help the plaintiff?” This central question focuses jurors on the practical value of money, which moves them away from damages decisions based purely on gut feelings. Gut feelings almost always favor plaintiffs, especially on noneconomic damages. From there, the defense should create categories of how money can help the plaintiff. In doing so, it should look for opportunities to be “generous.”
For example, we worked on an mTBI case where the plaintiff testified that one of the things he missed most was his dogs. The plaintiff loved dogs and had six dogs before the accident, though his attorneys did not ask for any damages specifically tied to this issue. In our closing, the defense acknowledged the plaintiff was not asking for money regarding his love of dogs, but argued that he should still get something, and created a damages category for it. The defense said he should have dogs again and have someone to help him take care of them and set aside $50K in that category. The jurors were shocked the defense would offer money the plaintiff did not ask for, and thought $50K for dogs was incredibly generous (some even said it was an absurdly high amount). This violated all their negative expectations about how a large corporate defendant approaches money in a lawsuit and led them to conclude the defense was genuinely interested in finding ways in which money could help the plaintiff. This, in turn, opened them up to adopting the defense’s alternative damage framework.
That is just one example. In wrongful death cases, defendants can set aside $50K a year for the family to get away on vacation. The language is key in an example like this. The defense attorney should say in closing that nothing will ever take the pain away or make them forget their loss, but this money gives the family an opportunity to get away somewhere nice every year and possibly find some momentary peace. In another wrongful death case, a defendant created a category to cover college for each of four grandchildren because the evidence was clear the deceased grandparent wanted the grandchildren taken care of, and this as just one example of how money can help the plaintiffs.
The key is to have several categories that cover the issues that have come up over the course of trial and then be generous in these categories. The dog example is on point here. The jurors were shocked by the generosity of suggested $50K for dogs when the plaintiff had not even asked for money for this, yet $50K was nominal in the bigger picture (the plaintiff asked for $70M). Generosity surprises jurors by violating their expectations and makes it more likely they will adopt this defense framework for thinking about damages.
One final tip for defendants using this strategy: build up to the total number. It is important to create all these categories with money allocations and impress jurors with the sense of generosity before showing them the total alternative damage award. If the defense attorney starts with the total number and then goes to the individual categories, jurors are more likely to have the negative, visceral reaction to the total number as nothing more than an effort to “lowball the plaintiff.” If the defense builds up to that total number through a series of generous allocations, jurors will be more open to the total number when it is finally revealed because they understand with clarity the “generous” reasoning behind it.
Alternative damage frameworks rather than just alternative damage numbers give jurors a different way to think about how to determine damages and naturally exerts downward pressure on damages.
Thomas M. O’Toole, Ph.D. is President of Sound Jury Consulting in Seattle. Kevin R. Boully, Ph.D. is Senior Consultant at Perkins Coie in Denver.