CHAPTER 2 LITIGATION RISK|COST ANALYSIS TECHNIQUES
| Jurisdiction | United States |
(Mar 1984)
LITIGATION RISK/COST ANALYSIS TECHNIQUES
Associate Professor of Law University of Denver College of Law
Denver, Colorado
Christine E. Ledbetter
MSJA (1983) University of Denver College of Law
Denver, Colorado
INTRODUCTION
Litigation analysis and management has traditionally been viewed as one area that would never be computerized. Law firms and corporate counsel have, however, efficiently developed and used computerized accounting and finance, word processing, and legal research. Although not the primary subject of this article, the relationship between computerized accounting and finance functions, word processing, and legal research is helpful to understanding the development of litigation risk and cost analysis techniques. Appendix A is attached to aid the reader in understanding the interrelationships between these traditional legal areas and litigation analysis. In Appendix A, the presently used accounting and finance functions are characterized as traditional data procesing functions which can be divided into back office and front office functions. The budgeting and planning functions of a law office are critical to litigation cost analysis which will later be analyzed. The integration of back office and front office functions into a total law office integrated financial planning system is rapidly becoming common in leading edge law firms.
Word processing is a second area depicted in Appendix A. Computerization of word processing by memory typewriters is very common today, and is already being combined with law office
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computerized memo and brief data banks. Standard first draft form generation in the areas of probate/will and the corporation/articles of incorporation is becoming increasingly common. As computer technology continues, the integration of word processing, memo and brief banks, and first draft form generation will become increasingly common. Eventually these integrated systems will lead to legal reasoning systems which will include computerized legal research as part of this integrated system. These legal reasoning systems approach the area of artificial intelligence. Effective use of these integrated word processing, memo and brief data banks, and first draft form generation systems is critical in controlling legal costs in general. In the litigation area, this integration helps reduce costs by preventing "re-invention of the wheel" each time a memo, brief, or standard form document is needed.
The final area treated in Appendix A is litigation management. Computer technology is playing a major role in litigation management and to a large extent revolves around traditional artificial intelligence concepts. Artificial intelligence was primarily developed in mathematics. In the litigation context it is sometimes termed automated legal reasoning or computer-aided legal analysis. These computerized legal thought processes use computer programs to copy human thought and reasoning processes through knowledge and logical relations stored in the memory of a computer. The primary strengths of the computer are its capacity to store many pieces of information and perform logical manipulations on data at great speeds. The advantages of large amounts
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of data and fast logical manipulations, combined with the human knowledge and ability to direct the computer, can result in faster, more consistent, and more comprehensive legal decision making.
The systems designed to date include a stored body of law and the relations among laws. The attorney enters case facts, either by answering a series of questions, or by typing in a capsulated description. The computer then applies the law to these facts and performs various functions: (1) prints the appropriate document, or (2) assigns probabilities to various options, etc. The computer program outlines the mechanical steps taken to systematically evaluate alternatives and arrive at the conclusion. These computer programs are designed on the assumption that an attorney proceeds the same way with each case, which, in fact, may not be true. The steps taken in litigation are not always consistent, rational, or logical. The sequence of steps taken in litigation may not be programmable at all. The body of legal knowledge in any area may be so extensive as to be impossible to keep up to date, much less code all possible options.1
On the more technical side is the language barrier. Semantic capabilities are being further refined to make communication in English easier. As yet, however, the computer's English is not completely compatible with most attorneys' English.2 The process of mechanizing and programming human thought is fraught with constantly changing emphasis and conceptualization. There is also the intrinsic problem of the computer's inability to
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duplicate human intuition and experience. After a brief explanation of reasoning modes, several of the legal analysis systems currently being developed will be discussed.
DEDUCTION VS. ANALOGY
Computer judgment is only that of the programmer, and so far legal computer models have attempted to simulate two models of human reasoning: deduction and analogy. Deduction is based on syllogistic logic, which is a method of using major and minor premises to arrive at a conclusion. From the computer stand-point, this is propositional logic based on Boolean algebra. Premises are represented in an "IF-THEN" format with "logical connectors" (not, and, or) representing relationships between premises. Legal rules are translated into this format, allowing the computer program to decide when the provisions are satisfied.3 To the user, these types of analysis systems are easy to understand because the computer frames the IF-THEN statements into yes/no or true/false questions, and then recycles the answer back to determine whether to accept or reject the premise.
Analogy is based on comparing case specifics with those stored in the computer for similarities, and then applying the rule of law from the stored set of facts to the case in question. The computer uses semantic network comparison, similar to computer flow charts. Fact situations are converted to "things" and "relations" which are linked together to form a network. There are different "kinds" of relations, and each are stored in a hierarchy with categories of things and relations. For comparison, networks are checked for matches in structure and
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analogous "kinds" of relations.
Attorneys use both deductive and analogic reasoning when analyzing a case. Computer programs have generally followed one method or the other.
ACADEMIC and DEVELOPMENTAL MODELS
The following is a brief discussion of several academic and experimental models. New models are constantly being developed.
ROSIE
Waterman and Peterson have written a general analysis of rule-based computer modeling of the decision-making process involved in out-of-court settlements. Their prototype model, ROSIE is based on lawyers' and insurance claim adjusters' description of how they try to settle hypothetical cases. IF-THEN statements were formulated from this information and constitute the computer's imitation of the reasoning process. Behaviors and decision processes are translated into rules based on law or simply experience. The rules are applied according to the specific facts of the case and form a decision tree that leads to a legal conclusion (i.e., as to the liability of the defendant and under which rules of law.) ROSIE then offers further explanation of the model's decision-making process (e.g., defendant's liability, what rule led to a certain deduction, etc.). The program estimates the worth of a civil claim by considering formal and informal legal rules, subjective interpretations (e.g., "reasonableness", "ordinary care") and the impressions of the jury and judge.
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There are intrinsic drawbacks to any decision...
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