David, Goliath, and reverend Bayes: Prior beliefs about defendants' status in personal injury cases

AbstractTwo experiments were performed to ascertain the effect of the extra‐legal factor of defendants' status on subjects' judgements in a simulated jury task. In support of the ‘deep‐pocket’ hypothesis, high‐status defendants were perceived as less sympathetic and were more likely to lose their case, even though the factual evidence was identical, than low‐status defendants. There was a spillover effect, such that plaintiffs (Davids) suing high‐status defendants (Goliaths) were themselves viewed as more sympathetic. The effect of defendants' status was mediated by the sentiments that it aroused toward both litigants; it was negligible with sympathy partialled out. Contrary to the deep‐pocket hypothesis, high‐status defendants did not have to pay more for the same injury; subjects are able to ignore status in awarding compensation when compensatory and punitive damages are clearly separated. In treating defendants differently depending on their status, subjects relied on relevant prior beliefs about the relationship of defendants' status to wealth, propensity to cause harm, and standards of accountability. The results are discussed in terms of the sometimes conflicting norms between an optimal decision‐making model like Bayes' Theorem and legal guidelines for judgements of liability and compensation.