5. Ivana Loyer claims she has been unfairly dismissed by her employers. She consults the law firm of Zackon and Vorovat, who agree to take up her case. They advise her that if she wins her case she can expect compensation of £15,000, but if she loses she will receive nothing. They estimate that their fee will be £1500, which she will have to pay whether she wins or loses. Under the rules of the relevant tribunal she cannot be asked to pay her employer’s costs. As an alternative they offer her a ‘no win no fee’ deal under which she pays no fee but if she wins her case Zackon and Vorovat take one-third of the compensation she receives. She could decide against bringing the case, which would incur no cost and result in no compensation. Advise Ivana what to do:

   1. (a) using the maximax decision rule

   2. (b) using the maximin decision rule

   3. (c) using the minimax regret decision rule

   4. (d) using the equal likelihood decision rule

Answer rating: 100% (QA)

The payoff table is Standard fee 13500 1500 No win no fee Win Lose Standard fee 10000 0 a Maximum r... View the full answer