Appellate Base Rate

An appellate base rate is the historical rate at which judgments of a given type, in a given jurisdiction, have been affirmed, reversed, or modified on appeal, and it is the primary input for pricing a judgment's residual risk once the underlying merits question has already been decided at trial. Because a judgment is a categorically different asset than the pre-trial claim that preceded it, pricing it requires a distribution anchored to appellate outcomes rather than to the trial-level settlement-probability distributions appropriate to a pre-resolution position. Appellate base rates should be computed at the level of granularity the underlying variance actually lives at, since affirmance rates can differ meaningfully across circuits and across case types within a single jurisdiction, and a base rate averaged too broadly across circuits can understate the specific residual risk a given judgment actually carries. An institution pricing a judgment portfolio should expect its appellate base rates to be disclosed by jurisdiction and case type, with the sample size behind each figure, rather than as a single blended figure applied uniformly across a portfolio holding judgments from several different circuits and case types, since a blended figure obscures exactly the variance a granular pricing decision needs to see.