Monday, June 2, 2014

How risky are you?

Litigation - the process of trials and hearings where the outcome is determined by judge or jury - is fraught with risk.  Whether a civil or criminal case, client and lawyer continuously engage in a risk versus benefits analysis in deciding how next to proceed.  The following thought experiment demonstrates some of the points.

Assume you find yourself on The Price is Right, holding a box containing a 4-year prison sentence which you must complete.  On stage are 3 identical looking boxes and you cannot tell what is inside.  The first happens to have in it a "get out of jail free" card, meaning if you choose that box you do no prison time.  In the second box is a 4-year prison term (the same you are facing now), and in the third box is a 10-year prison term. 

Would you take the opportunity to exchange the box you are holding for a choice of one of the three on stage?  If you say no, you are "risk averse" and will take a plea or settlement offer pretty quickly.  If you say yes, you have done the math and concluded you "only" have a 33% chance of doing worse, perhaps a risk worth taking.

What if we change the scenario so that both box 2 and 3 have 10-year prison sentences?  If you say yes to choosing you are risky, willing to serve a 10-year sentence in the hope (against the odds) that you do no time.

What if we add a box, so that there now are 4 boxes on stage, one of which has the get out of jail free card, one which has the 4-year sentence, one which has a 10-year sentence, and one which has a life sentence?  How does that change your answer?

What if you have to pay to choose (i.e. to pay the lawyer trying to maximize your favorable odds)?  Does that change your analysis in each of the above scenarios?  How much would you pay? 

What if, in addition to paying to choose, you had to wait six months to make your choice?  Does the time factor play into your analysis?

Note that guilt or innocence, right or wrong, whether someone is a "good" or "bad" person, play no part in this experiment.  At some point, the kind of risk-benefit analysis demonstrated above influences the outcome of most any criminal or civil matter.  How risky are you?  Don't go it alone, Count on Sanderson Law, P.C., to help.  303-444-8846.

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