In this series on defining wins in litigation, we’ve talked about defining the goals and strategies at the outset, clear and open communication, and the benefits of resolving a dispute both financially and reputationally. The final piece in this series discusses why mitigating the plaintiff’s damage recovery can also be a “win”. I can speak from experience because I have effectively used this strategy for a client.
Suppose your customer accuses your company of taking certain actions that violated the terms of your contract. After digging into the contract and some other communications between the parties, it is clear you breached the contract. It also appears that your employees’ actions violate a statute that allows the customer to recover punitive damages. The customer claims $500,000 in compensatory damages, and wants another $3 million in punitive damages. What do you do from a litigation strategy standpoint?
Credibility is Paramount
If it is clear that you are liable, own it. Remember the twelve jurors in your case are sizing up your credibility from the moment they lay eyes on you in the courtroom. The best way to lose credibility is making ridiculous arguments that aren’t supported by the evidence. Not only will you lose with the jury on the liability questions, but they also will not believe you on the damages issues. Some of the best defenses in these situations go like this: “Ladies and gentlemen, we acknowledge that we breached the contract. But the reason we are here today is because the plaintiff is not entitled to the damages they claim they suffered.”
Eliminating the Punitive Damages Exposure
Taking a remorseful approach can also eliminate the punitive damages exposure. Jurors view punitive damages as a way to punish a defendant who engaged in egregious conduct. In other words, punitive damages are used to teach a lesson. But if the defendant comes out and credibly tells the jury that it already learned its lesson, the jury is unlikely to award punitive damages.
Is the Plaintiff Greedy?
Finally, this strategy allows a defendant to turn the jury’s focus in the case from the defendant’s conduct to the plaintiff’s credibility. If you tell the jury that you acknowledge you did something wrong, they will subconsciously begin to question why the trial is even moving forward. That leads to an assumption that the plaintiff is seeking too much in damages. All of the sudden the jury is focusing on the plaintiff, and not on your conduct.
Tilting the Scales in Your Favor
I mentioned earlier that I have experience with this strategy. The client was willing to acknowledge liability at the outset of the trial, and we focused the entire trial on the plaintiff’s claimed damages. Instead of $3.5 million dollars, the plaintiff walked away with less than $1,000. Pigs get fat, and hogs get slaughtered. Merry Christmas and happy holidays to all!