Over the past couple of decades, there have been great developments in the fields of psychology and cognitive neuroscience that have allowed the advancement of our understanding of how people make judgements about causality in several domains. We provide a review of some of the contemporary psychological models of causal thinking that are directly relevant to legal reasoning. In addition, we cover some exciting new research using advanced neuroimaging techniques that have helped to uncover the underlying neural signatures of complex causal reasoning. Through the use of functional imaging, we provide a first-hand look at how the brain responds to evidence that is either consistent or inconsistent with one's beliefs and expectations. Based on the data covered in this review, we propose some ideas for how the effectiveness of causal reasoning, especially as it pertains to legal decision-making, may be facilitated.