Cognitive Bias in Arbitration: The Backfire Effect

arbitration backfirePeople tend to process information through some of the same filters over and over again. We call these filters “cognitive biases.” They are hardwired into our brains.

One of these biases is called the “Backfire Effect.” People look for patterns in evidence so the world does not become a string of disconnected observations. As we are starting to piece together a pattern, or develop a hypothesis, one might think that a rational person would reconsider the hypothesis when faced with an inconsistent fact. It actually takes an extra cognitive step to approach the world that way, since our tendency is to strengthen the developing hypothesis in the face of the inconvenient evidence. Our minds value seeing some pattern over the chaos of having no pattern.

In an arbitration, the arbitrator may experience the backfire effect without even realizing it. Every decision has two elements, determining (i) what actually happened and (ii) whether the fact pattern fits into an intellectual construct of whether to make an award for the plaintiff (whether that construct is legal, course of dealing or fairness depends on the type of tribunal).  As the complainant begins her case, she draws an image of the events that led to the conflict. Her counsel then fits the developing image into the developing pattern of the argument for an award.If it is well-drawn, the arbitrator who is not careful will begin to buy into it subconsciously in order to make sense of all the data. When the defense begins to present its case, it may be fighting an uphill battle not only to dislodge the plaintiff’s version of the story and legal claim, but maybe even to battle against a subconscious tendency to reject inconsistent evidence, laced with the secret emotionality that goes along with the backfire effect. Arbitrators, who like judges tend to be a rational bunch, are not always sensitive to non-rational tags that become attached to developing patterns.

As an arbitrator, be aware of the backfire effect. As a party or advocate, use it. The early part of the complainant’s case is critical. The pattern is drawn in the opening statement, then those first bits of evidence must layer over each other as cleanly as possible to set the stage. Think of the presentation as a house of cards, with the evidence as credibly as possible built on itself to tie together a story that the arbitrator has to work to step away from when the other party has its turn. For the other party, the best way to undermine the backfire effect is to damage the credibility of the complainant’s very first bits of evidence presented and the way complainant’s story fits together, so the arbitrator has conscious doubts over the intellectual construct he is developing.  If the complainant’s story has not fully taken hold, it leaves space for the respondent to develop its story.

The backfire effect: be aware of it.  Use it.