Frequently Asked Questions
General Questions About Decision Analysis
What is litigation decision analysis?
Litigation decision analysis is a systematic methodology that applies decision theory and probability assessment to legal disputes. It uses decision trees to map out all possible outcomes of a case, assigns probabilities to each potential event, and calculates expected values to determine a case’s risk adjusted value. Decision tree analysis has been used for over 40 years in commercial litigation in the United States to calculate the settlement value of a case.
How is risk adjusted value different from a judgement or verdict in a case?
A potential judgment or verdict represents just one possible outcome at trial. Risk adjusted value, by contrast, is the probability-weighted average of all possible outcomes, accounting for the likelihood of each scenario. It also factors in litigation costs and the time value of money, providing a more comprehensive valuation than simply focusing on potential verdicts. The risk adjusted value is a rational settlement value for the case.
How accurate is decision analysis in predicting actual settlement outcomes?
Decision analysis doesn’t predict outcomes—rather, it provides a rational basis for settlement decisions based on probability-weighted calculations. When probability assessments are thorough and realistic, decision analysis typically leads to more favorable settlements than unaided judgment.
Is decision analysis only useful for large or complex cases?
While decision analysis provides particular value in complex litigation with multiple claims and uncertain outcomes, its principles can be applied to cases of all sizes. Even straightforward cases benefit from the rigor and objectivity that decision analysis brings to settlement decisions.
Our Consulting Services
How long does the consulting process take?
The timeline depends on case complexity, the availability of necessary information, and how quickly probability assessments can be obtained from your legal team. Accurate probability estimates are critical to this process and should not be rushed. We provide best practices for how to make these assessments and can facilitate these discussions.
Do I need to share confidential case details?
Can decision analysis be used for cases that are already in settlement negotiations?
Absolutely. Decision analysis can be especially valuable during active negotiations by providing objective settlement ranges and helping you evaluate settlement offers against the expected value of continued litigation.
What information do you need to conduct an analysis?
We typically need:
– A summary of all claims, counterclaims, crossclaims and defences by all parties and an understanding of how they relate to one another. For example, are the claims independent or in the alternative to each other.
– Your team’s assessment of the probabilities of success on each issue.
– The range of possible damage awards for each claim and the estimated probabilities for each award.
– Information about potential cost awards.
– Your current and anticipated future litigation costs through trial.
– Information about legal fee insurance and insurance coverage.
– Whether there are collection risks.
– Information about any additional value that may be gained if a certain outcome is achieved (for example, a competitor’s patent is declared invalid) or additional costs that may be incurred if the litigation proceeds (for example, the cost of internal resources that must be devoted to the case).
Training and On-Demand Learning
Do I need special software to implement decision analysis after training?
We use and train others to use 
as we believe it is the best and easiest to use commercially available product for legal professionals. Our clients receive preferred pricing through our promo code: “Settlement Value”. Visit eperoto.com