April 17, 2019

The dangers of confirmation bias

Posted in Commercial Litigation, Corporate Litigation, Employment Law by Gene Killian |

As I write this, we’ve just completed a three-week jury trial against a major, politically connected New Jersey law firm defendant (represented in the case by another major, politically connected New Jersey law firm).  The case involved a whistleblower claim (under the New Jersey Conscientious Employee Protection Act, or CEPA). The jury came back with a $1.5 million verdict, representing our client’s lost back pay and front pay through retirement, as the result of her wrongful termination. With a likely fee award under the fee-shifting provisions of CEPA, the total award will probably be north of $2 million. The ironic part is, we would've settled with these guys for $300,000 three years ago, but they steadfastly refused to offer anything. They just developed an absolute case of tunnel vision and refused to see any weaknesses on their side, despite being repeatedly warned by the presiding judge in settlement conferences, and despite losing a summary judgment motion in which they claimed they had no liability, and also losing two separate directed verdict motions.  (If you’re a non-lawyer:  A “directed verdict” motion is a motion made at the close of evidence in a trial, in which one side argues that the other side’s evidence is insufficient to support a verdict.)  At some point, you’d have to think, “Maybe we’re wrong and have some exposure here.”  Guess not.

Then, on the night before the jury was to begin deliberations, they basically offered us nuisance value, and told us that the offer would be deemed automatically withdrawn the next morning. Unbelievable.

Given their previous refusal to accept responsibility for anything, I’m sure that an appeal is coming, of course.  (My favorite words from an opposing attorney:  “We’ll be appealing…”)

Here’s a brief summary of the facts: Our client, an experienced class-action attorney and a partner at the firm, had objected to a class-action settlement on the ground that it violated the ethical rules and a standing court order.  Under the proposed settlement, the lawyers were going to get richer but most of the clients were going to get nothing.  She got fired for her trouble, although, at trial, the law firm somehow even denied firing her. (That’s the kind of straight shooting that jurors love.)  They then spent most of the trial trying to convince the jury that her claim was “made up,” but they couldn't seem to keep their story straight in many respects. The jury apparently wasn’t impressed.

The purpose of this post isn’t to gloat or brag.  (Well, maybe to brag a little...)  It’s to point out a key principle that lawyers and businesspeople should carefully consider and often forget in this busy world:  Confirmation bias, while an easy way to view problems, is a deadly disease.  That’s why we always focus-group any case we’re going to try, and why I spend hours reviewing the comments of focus group participants who voted against us. It’s depressing work, but absolutely necessary. In making any rational decision, you need to understand and respect all points of view, especially those that contradict your perspective.

“Confirmation bias,” by the way, is the human tendency to cherry-pick information that confirms our pre-existing beliefs or ideas. It’s rampant in American boardrooms, courtrooms, and politics. Confirmation bias explains why two people with opposing views on a topic can see the same evidence and come away feeling validated by it. This cognitive bias is most pronounced in the case of ingrained, ideological, or emotionally charged views (like litigation positions).

Failing to interpret information in an unbiased way can lead to serious misjudgments. By understanding that, we can learn to identify bias in ourselves and others. We can be cautious of data that seems to support our views.

In her excellent book “Own It,” Sallie Krawcheck (the CEO of Ellevest), argues that the 2007-08 financial crisis stemmed in part from a lack of diversity on corporate boards, and a failure to appreciate and respect divergent points of view. Boardrooms were overtaken by a universal, macho, “hard-charging” ethos, which can be extremely dangerous.  Krawcheck writes:  “They were people who had worked together for years, went to the same universities, sent their kids to the same schools, attended the same training programs, dined at the same restaurants, got promoted together, vacationed together, played tennis together, drank together, and sat on charitable boards together. Therein lay the problem. The thinking converged. People approached decisions in the same way. Leadership teams imposed neither checks nor balances on one another. Individuals didn’t fundamentally challenge one another. I saw any number of executives finish one another’s sentences. As a result, Wall Street suffered from what I call the ‘false comfort of agreement.’”

Just yesterday, I participated in an unsuccessful mediation, in which the other side absolutely refused to give our point of view any credence at all. We understood their point of view, and were willing to take a substantial discount on the amount in issue. But they were so convinced they were right, that they’re now apparently going to risk a jury trial.  Even if they win the trial (which is questionable), is this a good decision, given the expense and disruption that will be involved?  It’s another example of confirmation bias at work.

I think too many people (especially men) may have seen the movie “Patton,” and believe that relentless aggressiveness accomplishes things.  Don’t bother me with details! But in the movie, after Patton defeats Field Marshal Rommel’s forces in a battle in North Africa, what’s the first thing he says? “Rommel!  You magnificent bastard!  I READ YOUR BOOK!”  In other words, Patton did thorough research before formulating a strategy.  He didn’t charge off blindly without carefully analyzing all available data, and, in particular, having a thorough understanding of his opponent’s point of view. 

The real General Patton, meanwhile, once became unhappy with what he perceived to be too many yes-men at a staff meeting, and famously said:  “If everyone’s thinking alike, then no one’s thinking.”  

The lesson for trial lawyers, HR professionals, and businesspeople:  Never fall in love with your own story.  You might end up paying a very stiff price.