Civil Litigation: Process and Procedures Chapter Eight Settlement and Alternative Dispute Resolution

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 2 Negotiated Settlement Most cases settle prior to trial Case is analyzed & prepared Realistic determination of value/cost is made Documentation of claim is submitted Informal negotiations Negotiations assisted by Alternative Dispute Resolution (ADR)

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 3 Settlements, cont. Direct costs assessed Time preparing for & attending trial Preparation of witnesses & exhibits Court costs Indirect costs Time it takes to get to trial Anxiety of uncertainty Strain of reliving the event

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 4 Settlement Factors Plaintiff Uncertainty of juries Potential for surprise Judicial decisions affecting admission of evidence Direct & indirect costs Limited defendant assets Carrying debt for long periods of time

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 5 Settlement Factors, cont. Defendants Judges expect good faith offers Cost/benefit analysis determines it is better to pay before incurring costs of litigation The reserve allotted for this action is more than the demand Unusually appealing plaintiff, witnesses Unusually unsympathetic defendant, witnesses

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 6 Negotiations Many styles, approaches Intimidation Confidence & reasonable position Well prepared to show: Strength of facts (witnesses, evidence) Strength of law Eliminates the “wild card” factor of a third- party decision-maker

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 7 Damages Plaintiff determines the preliminary value of the case Special damages, both paid & outstanding, e.g., Lost wages Medical bills (future treatment, rehab) Repair bills Cost of performing chores General Damages, e.g., pain & suffering Speculative, difficult to assess Research into local awards can help prepare a claim

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 8 Damage Defenses Causation Injury not as bad as claimed Preexisting condition Liability Defendant not responsible No contract or no breach No duty or breach of duty

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 9 Negotiation Documents Settlement letters Informal demand Sets forth special damages Settlement brochure Outline of the case, facts Damages (special & general) Demand Exhibits supporting claim

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 10 Supporting Evidence Photographs Before & after, during treatment Even if too prejudicial for trial Marked as exhibits & captioned Bills & reports, other records Medical bills, reports Repair bills Employment documentation

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 11 A Day in the Life Multi-media, electronic, or print “Before” movies, still photos, videos Follow through an “After” day Documents changes in activities Chores Work Transportation Recreational activities

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 12 Work Product Negotiations are not limited by the rules of evidence Must make a persuasive case to succeed Without giving away trial strategy Without violating the attorney work product doctrine

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 13 Settlement Range Plaintiff’s ( π’s) demand, usually far above the expected recovery Defendant’s ( Δ’s) offer, usually far below the expected recovery If close at the outset, settlement will be easier Terms are on the table, motives are not

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 14 UPL Paralegals cannot Make offers or demands Agree on behalf of a client Advise clients on the fairness of an offer Paralegals can Act as a conduit of information from the attorney to the client Safeguard confidential materials

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 15 Offers Once the range is established, negotiations may proceed All offers should be communicated to the client, even those outside the range The dispute may be over specific performance, which leaves less room for maneuvering

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 16 Minors’ Settlements Generally, the court must approve a settlement made on behalf of a minor or person under a mental disability File a petition with details of liability & damages Identify legal fees & costs May be some oversight of investments, payouts

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 17 Settlement Documents Release of claims by the plaintiff or Mutual release of claims by both parties In writing, normally prepared by the Δ Identifies the parties, situation, and where the matter is in terms of litigation Identifies the settlement terms & payout Withdraws or dismisses the case Confidentiality clause Signature lines

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 18 Release

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 19 Confidentiality of Settlements Agreement may contain a confidentiality clause May condition the settlement on confidentiality Without penalty, there is no enforceability Private contract, and not public record

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 20 Termination of Lawsuits Once the lawsuit is filed, the settlement must include an end to the case, and the court must be notified Notice of dismissal (no answer filed) by π, with no record Stipulation of dismissal (signed by all parties) with no record Consent judgment (settlement becomes part of the court record)

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 21 Alternative Dispute Resolution ADR includes Negotiated settlements Arbitration Mediation Neutral fact finding Early neutral evaluation Mini-trials Summary jury trial Private judging

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 22 ADR Characteristics Generally less costly Generally faster Can remain private, rather than public Covered by confidentiality Relaxed rules of procedure, discovery, evidence Limited right of appeal

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 23 Binding Decision or Promoting Settlement Some types of ADR end with a binding decision that the parties have agreed to abide by (voluntary arbitration, private judging) Some types inform the parties of the value of their case, encouraging settlement (mediation, Early Neutral Evaluation, Summary Jury Trial)

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 24 General Characteristics ADR participants can generally Resolve disputes in a confidential setting Follow their own procedural rules and timeline Select the presiding official or “neutral” Lower costs of the dispute Maintain on-going relationships (non- adversarial, in many cases)

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 25 Negative Indicators Sympathetic clients or witnesses argue for a jury Witness credibility question Public resolution (precedent) may discourage subsequent suits Wish to preserve the right to appeal No viable possibility of settlement

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 26 Mediation Non-binding, structured negotiations Led by a mediator, or facilitator, who will “broker” the procedure Generally voluntary, although can be –court- ordered Mediator levels the playing field between stronger & weaker parties The mediator does not render a decision, but helps the parties arrive at a mutual agreement

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 27 Voluntary Arbitration Binding (voluntary) Parties agree to rules of discovery, procedure & evidence Arbitrator(s) render a decision (award) that can be converted into a judgment Limited grounds for appeal

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 28 Court-Annexed Arbitration Usually during or following discovery in a case set for trial Arbitrator(s) render an advisory judgment, which the parties can accept or reject Helps the parties evaluate their cases & promotes settlement

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 29 Other ADR Methods Binding or non-binding Neutral Fact Finding may settle a single issue Early Neutral Evaluation assists parties in settling by evaluating a written description of the matter Mini-trials are non-binding proceedings conducted in front of the decision-makers in the matter Summary jury trial is non-binding, conducted in front of a mock jury Private judging may be permitted in some states, with a temporary judge hired by the parties to render a binding decision, appealable (with a record)

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 30 Private ADR Private organizations can help parties arrange for a variety of ADR methods They can provide (for a fee) Rules Facilities Lists of decision-makers or neutrals Forms & templates for the process

Civil Litigation: Process and Procedures Goldman/Hughes © 2009 Pearson Education, Upper Saddle River, NJ All Rights Reserved. 31 Federal Arbitration Act Voluntary arbitration agreements in commercial contracts are Valid Irrevocable Enforceable