SettlementAnalytics
SettlementAnalytics™ is a quantitative economic research and advisory firm, focused on litigation valuation, settlement optimization and legal claims risk management. We are dedicated to advancing the application of scientific and quantitative methods to litigation analysis and settlement bargaining. Core advisory and software services draw on the firm’s proprietary quantitati
ve models of litigation and settlement, which bring together ideas from game theory, information economics, financial analysis and Monte Carlo simulation. Our goal is a simple but ambitious one: we want to change the way litigants price and transact legal claims. Problems and Solutions
The firm’s approach is based on the idea that claim valuation and settlement optimization must properly reckon with the bilateral character of the dispute, the uncertainty of trial outcome and the fundamentally contingent nature of legal claims. Conventional approaches to lawsuit pricing, legal spend and settlement decisions are vulnerable to error because they can fail to adequately take account of this complexity. Research shows that the scale of this problem is enormous. In the case of settlement decision making, empirical research consistently indicates that plaintiffs are making settlement errors in approximately 60% of legal disputes while defendants make errors in about 25%. And the size of these errors should be of concern to any litigant. The broader problem is that legal-economic issues are mathematically complex, and as a result decision-making can be highly sub-optimal when this complexity is overlooked. Qualitative approaches or the use of historical data can sometimes help, but they can also paint an incomplete and unreliable picture. Our own approach focuses on the pure economic rationality of litigation and settlement decisions and we think this provides litigants with an important check and balance against the heuristic and/or data biases that may occur. SettlementAnalytics seeks to reduce errors in claim valuation and settlement decision-making through the application of its quantitative models and software applications. Game Theory of Litigation
SettlementAnalytics is pleased to announce the launch of OptiSettle™, the world’s first fully-automated legal economic analytics platform – a new model-based approach to litigation analysis. OptiSettle represents a comprehensive litigation pricing and claim risk management framework, based on the game theory of litigation. The software platform incorporates the firm’s proprietary model development and seamlessly integrates ideas from information economics, Monte Carlo simulation and financial analysis in one analytic concept. We believe that OptiSettle is a pioneering initiative in the application of game theory and Monte-Carlo simulation to litigation and settlement decision-making. Quantitative Perspective
A key feature of OptiSettle’s analytic framework is that it enables litigants to examine the value of claims across the dyad of both trial and settlement. This distinguishes its analytic approach from the simple trial expectations and decision tree model. We believe it is analytically very important to get beyond a pure trial expectations framework – if only because 95% of all legal disputes are resolved before a court adjudication. OptiSettle delivers this broader analytic perspective. OptiSettle also brings a level of quantitative rigor to the process of claim valuation and settlement decision-making. Whereas the conventional process of translating trial expectations into settlement decisions is largely qualitative and intuitive, OptiSettle enables corporate litigants to establish a more systematic, quantitative, documented and auditable approach. And as legal claims become a bigger part of the enterprise value calculus, OptiSettle should help by providing a more rational and defensible basis for claim disclosures and settlement pricing. To learn more about OptiSettle, visit the SettlementAnalytics website. Legal Technology Trend
SettlementAnalytics is part of an emerging trend towards the application of technology to litigation and we expect this sector to continue to demonstrate robust growth. As legal costs continue to spiral upward, quantitative approaches to making litigation decisions should become increasingly compelling. But beyond the trend towards legal tech, we believe there is a more fundamental paradigm shift afoot. From one characterized by a legal mandate and a cost-center orientation to one characterized by an investment mandate and a risk-adjusted return orientation. From trial-centric, trial-maximizing to claim-centric, claim-maximizing. The technology now exists to apply the same asset, risk and portfolio management practices to legal claim portfolios that previously have been reserved for more conventional corporate assets such as pension funds, real estate and treasury balances. In other words, not merely to look at legal claims as a portfolio, but to examine all litigation decisions through the lens of investment management. SettlementAnalytics.com
