Once in-house counsel understand how they can better evaluate and manage risk, particularly through litigation funding, they can begin to develop a strong legal strategy to pursue cases. In order to comprehensively evaluate and manage risk, legal departments need to be able to objectively assess each case.
In our first article in this three-part series, we explored the need for tools and technologies to assess litigation risk. Here, we will provide advice and guidance on how in-house counsel can move away from instincts and guesswork to an analytical approach to litigation risk assessment and how third parties such as litigation funding companies can often provide the best source for that analysis.
When Instincts Are Wrong
In-house counsel bring a wealth of training, knowledge and acumen to their client. Yet, when it comes to litigation, well-honed instincts and years of experience alone cannot account for all the vagaries and uncertainties inherent in taking a claim to court. The complex interplay between the law, the facts and the decision-making proclivities of those tasked with making critical determinations – from the judge to the jury – often leave in-house counsel feeling as if there is no reasonable way to anticipate how their case will be decided.
Objective assessment of legal claims is a highly sophisticated field, and it can provide in-house counsel with insights that both they and their outside lawyers have not had access to previously. Knowledgeable experts in the litigation finance industry can view the merits of a case analytically. They can also help determine how judges, experts and jurors will likely react to a particular type of case in a specific jurisdiction. Some have even developed innovative technological methodologies to evaluate the perceived merits of a given claim from a multidimensional perspective.
Determining Objective Criteria
There are several aspects to consider when attempting to objectively assess current and potential litigation. The perceived strength of the evidence is one such factor. The probability of obtaining summary judgment is another. The credibility and appeal of key witnesses is a third. And there are numerous others. When considering all these factors, in-house counsel may have some experience in evaluating cases at a high level, but may only be making educated guesses.
That’s why a comprehensive, analytical, data-driven approach by a neutral third party is so valuable. Third parties aren’t blinded by company culture or invested in the history of the case. Rather, they can bring to bear a dispassionate viewpoint based on insights from a range of different types of people who will be intimately involved in determining the fate of a claim, including seasoned trial lawyers who can provide a critical review of the arguments likely to be advanced by both parties, expert witnesses from the relevant fields who understand the issues involved, judges who have the skill to provide an analysis of the facts within the framework of the law and jurors who will ultimately be tasked with judging the case. More specifically, litigation funders can look at:
- Trial lawyers’ insights
It’s not what you know, it’s what you can prove. Those who have been in the trenches and tried cases – yet have no vested interest in the pending matter – offer a unique understanding of how impactful potential arguments can be.
- Judges’ assessments
The guidance of those who have served on the bench and have experience in the key areas of law that relate to a litigant’s claim can be invaluable. Retired judges can fully assess different types of cases, including intellectual property, trade secrets and breach of contract matters within the governing framework of the laws in a given jurisdiction.
- Expert witness evaluations
Experts provide the technical and scientific background that can make or break cases. In some areas of the law, these experts – be they engineers, scientists or forensic accountants – provide insights that can’t be equaled by anyone else on the trial team and aren’t available until those experts have been retained and undertaken the analysis they were hired to perform.
- Jurors’ reactions
Juries represent the greatest wild card. Many in-house counsel feel there is no way to predict how jurors’ will react to their case, but that’s not true. An objective, scientifically based assessment of juror perceptions and decision-making processes can be performed. And, when done correctly, this will provide significant insight into how a specific matter will be viewed and decided.
By bringing together a sound analysis of the perspectives from each of these key groups, it’s possible for in-house counsel to obtain an objective, unbiased look at the merits of their claims.
Finding the right partner to perform this type of analysis is extremely important, of course. In-house counsel should consider sources such as litigation funding companies, which have developed expertise in deciding whether cases are worth funding. For these companies, the trust they place in their analytic processes is backed by the fact that they put their own capital on the line. They have a vested interest in remaining objective and developing an accurate assessment of the claim at issue.
In our next article, we will look at what litigation funding companies can offer to in-house counsel, and how legal departments can evaluate different types of litigation funders and their methodologies. We will also look at how litigation funding companies can mitigate the financial risks of pursuing litigation.