An experiment was conducted to investigate whether hindsight bias influences an important class of legal decisions—civil jurors' judgments of liability for punitive damages. Jury-eligible citizens were shown a videotaped summary of the circumstances surrounding an environmental damage lawsuit. Some subjects were presented a foresight perspective and asked to judge whether or not a railroad should comply with an order to stop operations on a section of track that had been declared hazardous. Other subjects were asked to judge whether the railroad was liable for punitive damages after an accident occurred. Three independent variables were manipulated: temporal perspective with one third of the subjects assessing risks in foresight and two thirds assessing risks in hindsight; subject role with one half of the subjects asked to assume the role of a juror rendering a verdict and one half the role of a citizen whose personal opinion was solicited; and, in the hindsight conditions only, the amount of damage ($240,000 vs. $24,000,000) caused by the accident. Almost all measures of participants' judgments and thoughts about the case showed dramatic foresight–hindsight differences. The participants' role had an effect on some measures; for example, participants in the juror role exhibited slightly smaller hindsight effects when judging liability than did those in the citizen role. The magnitude of the damage caused by the accident had no effects on any measures.
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