In mediation, we often come across parties who have invested so much into litigation, in terms of either time or money, they are driven to continue with a case even in the face of likely loss. The world of gambling calls this "pot committed.”¹

A poker player is pot committed when there is no better option than continued play of a losing hand.²  The term is often used to justify continued play where the player has bet significantly into the pot (the sunk costs philosophy).³  I have experience with this from years of playing high-stakes, professional Texas hold ’em poker. And, by that I mean, all the movies I've watched about gambling. 

Sage poker players know, however, that it is unwise to keep playing a losing hand based on the amount bet.⁴  In fact, truly being pot committed has little to do with the amount bet, and everything to do with the remaining chip stack and the player’s ultimate goal.⁵  If, for instance, the goal is to stay alive in tournament play, one may actually be pot committed if losing the hand will eliminate the player from the tournament. The amount already bet, itself, however, should not drive continued betting.

In litigation, if a party has spent a significant amount of money or has devoted a vast amount of time and energy to a case, they are prone to being pot committed. Even in the face of near-certain loss, the pot committed mindset can drive a party to not settle and proceed to put even more at risk. It can be difficult to convince someone that it is smart to end a case with a net loss outcome. After all, when faced with unappealing options, it is easy to be distracted by a low-chance win. Identifying and discussing the emotion behind pot commitment can help. This discussion can include:

• Big picture/goals (there is no tournament!);
• The initial “bet” may have been justified, but it is smart to reevaluate;
• Lawsuits (like gambling) are not business investments; and
• Benefits of settlement (protect the remaining chip stack; i.e., time/money/energy/resources that can be used better elsewhere).

Smart players avoid being pot committed.⁶  And they are also keenly aware of others who may be suffering from it—playing with a pot committed player brings its own problems^.7  

This is one of the many reasons I believe that early mediation is highly beneficial. In current times, it is easy to let delay creep into cases. And with more time, parties may increase their litigation spend. Early mediation is a fantastic way to avoid the pot commitment problem altogether.
 

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¹ Gibson, Neil, “Understanding What It Means to Be Pot Committed,” December 10, 2014, https://www.pokernews.com, https://www.pokernews.com/strategy/understanding-what-it-means-to-be-pot-committed-20050.htm
² Id.
³ Walker, Greg, “Pot Committed,” https://www.thepokerbank.com/strategy/concepts/pot-committed/
⁴ https://www.pokerlistings.com/strategy/odd-talk
⁵ Id.
⁶ Little, Jonathan, “Feeling Pot Committed,” https://jonathanlittlepoker.com/potcommitted/
⁷ http://dictionary.pokerzone.com/Pot+Committed (bluffing is not advised when playing against a pot-committed player)