Corporate Litigation: Halo Effect, Halo Tax, and Home Court Advantage
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As they examined these cases, they found three distinct characteristics:
Halo Effect: High status companies received a sort of “halo effect” that the researchers said was associated with jurors giving the company the benefit of a doubt. Overall, jurors were 14% less likely to find high status companies liable when compared to low status firms. Juror perspectives changed if the high status company was found liable and then jurors became angry and punished high status firms severely (when they did find them liable).
Halo Tax: If the high status company was found liable for employment discrimination, jurors punished them more severely than they punished low status companies. The researchers call this a “halo tax” and described victims of high status firms as being awarded 3x more in punitive damages than were victims of the low status firms. The researchers say this likely happens because high status corporations are held to a higher standard and if found liable, they are punished for their hypocrisy.
Home Court Advantage: When firms are headquartered in the state where the trial is happening—they are less likely to be found liable. The researchers call this a “home court advantage”.
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