Behavioral studies indicate that individuals do not always make objective decisions about risk. Various cognitive biases and heuristics-- mental shortcuts everyone uses consciously or subconsciously to make decisions under conditions of uncertainty--introduce error and subjectivity. At one level, these studies merely confirm the obvious: individuals make decisions based on both reason and emotions. At another level, they may introduce serious complications into some types of legal analysis, which are based on the assumption that individuals are rational actors. The potential effects of erroneous decisions about risk are of particular concern in the area of tort law. Laboratory studies establish that individuals role-playing as jurors in hypothetical negligence scenarios exhibit consistent bias in evaluating the level of risk in certain activities. Their knowledge that an event has occurred or that a bad result has been reached biases them toward finding that the event or result was more foreseeable than if viewed objectively and without prior knowledge of the bad result. Studies also establish that individuals overestimate small risks and underestimate large risks. Individuals also have difficulty evaluating risks and benefits separately, making risk-benefit decisions difficult. Do these apparent deviations from rational decisionmaking significantly affect actual juror decisions about risk in torts cases? Are jury verdicts consistently erroneous, warranting corrective measures? If the results of these laboratory studies can be extrapolated to actual litigation, verdicts in negligence cases may be overdeterring conduct which is reasonably safe. Jurors may also be labeling negligent conduct as recklessness, thereby warranting punitive damages. Fundamental fairness is also implicated. If normative tort rules are tainted by bias in their application, the credibility of the litigation process as a cornerstone of dispute resolution is called into question.
John E. Montgomery, Cognitive Biases and Heuristics in Tort Litigation: A Proposal to Limit Their Effects Without Changing the World, 85 Neb. L. Rev. (2011).