WINNING VERSUS THE OTHER GUY LOSING: THE EMOTIONAL COSTS OF LITIGATION
by Stephen Marcus
Obviously, anyone is involved in a lawsuit wants to win. Winning is better than losing. That
almost goes without saying. However, sometimes the objective of “winning” gets lost in the emotion of
wanting the other guy to “lose”. One or more parties may come to a mediation thinking “I want to
crush the other guy”, or “It’s a matter of principal”, or “That scalawag has to pay for what he has put
me through”. This brings an emotional component into the equation which makes the logical,
mathematical analysis of probabilities less meaningful. This mind set eliminates any type of “win-win”
scenario, and often results in “lose-lose”.
The emotional factor is not meaningless, and should not be discarded lightly. A need for
vindication or fulfillment of purpose are real emotions which are valid litigation objectives. However, it
is important for any party to a lawsuit to recognize that these are emotional needs that may deflect from
an economically sensible negotiated settlement.
For example, a defendant who is positive she has “done nothing wrong”, and believes that
paying “even one penny” to that scum on the other side will encourage the filing of more “frivolous
lawsuits” and that “the scoundrelmust be stopped!” has to realize that (a) taking the case to trial and
winning will cost more than settling at (or even before) a mediation, and (b) unless the case can be won
on summary judgment [and most attorneys know how difficult that can be], there is a chance of losing,
and having to pay the other side in addition to one’s own litigation fees and costs.
On the other side, a plaintiff may validly assert: “That bastard has to be stopped! If I let that
bum get away with this, he will do it again to others, if not to me!” Again, vindication and social
justice comes with a cost – the cost of litigation (which may exceed the amount of damages to be
awarded and collected), the risk that even winning will not stop the abhorrent behavior, and the risk of
losing [having to pay the litigation costs.]
Sometimes a defendant may threaten to file bankruptcy before having to pay an adverse
judgment. A plaintiff may say “Go ahead and file – I want justice! If the deadbeat is put out of
business, so be it!”. The defendant may be bluffing. Or the plaintiff may recover in bankruptcy the
same amount that can reasonably be expected to be collected on a judgment. On the other hand, if the
defendant’s bankruptcy is a valid and realistic possibility if the case is pushed to trial, perhaps by
accepting a lesser sum (but more than what would be received in bankruptcy or forced liquidation),
and/or accepting payments over time (perhaps with some security if any is available), the plaintiff may
allow the other guy to stay in business long enough to make the promised payments.
In conclusion: The demand for truth and justice and the fulfillment of emotional vindication,
revenge, etc. are realfactors in assessing offers or non-offers that arise in mediation. These factors
should not be totally ignored. But they should be recognized for what they are, and the costs and risks
of holding on to them should be given full consideration.
About Stephen Marcus
Stephen H. Marcus is an experienced mediator and attorney with a background in resolving complex commercial disputes, including securities fraud, construction defects, employment claims, and bankruptcy matters. A graduate of Harvard Law School and MIT, he brings a unique blend of legal acumen and technical insight to his practice. Stephen has conducted over 35 mediations and serves on multiple court and professional mediation panels, including the U.S. District and Bankruptcy Courts and FINRA.