During mediation, the neutral speaks with the parties about their “litigation risk” to motivate them toward a resolution. What is “litigation risk” in today’s environment? Throughout the country, verdict values in catastrophic injury cases are up. The challenge for mediation participants is to assess the realistic impact of what risk analyst Nassim Nichaolas Taleb described as the “known knowns,” the “known unknowns” and the “unknown unknowns” in litigation. In this commentary, we conceptualize litigation risk and how it can help reach a settlement in mediation.

Risk in the Context of Climbing

Authors Ron Funderburke and Derek Debruin defined risk in an article entitled “Managing Risk in Rock Climbing” in the periodical “Accidents in North American Climbing” published in 2019. They wrote, “Dictionaries suggest the words ‘hazard’ and ‘risk’ are synonymous, but the scholarship surrounding this subject describes a much different relationship between these words. We’re going to describe risk as a cycle, wherein hazards exist objectively, our exposure to those hazards subjectively creates an opportunity for loss as well as reward, and the outcome of our exposure can be analyzed.”