1. Agenda for 13th Class Admin Name plates Handouts Slides Polinsky
Court Visit – Friday 10/28
More info later
Keep day clear – 7AM to 2PM
Review
Appeals
German procedure
1995 Exam
Intro to Settlement & ADR

2. Assignment for Next Class
Settlement and ADR
Yeazell pp , ,
You do not need to read these materials carefully
Handout (Polinsky)
If you are not quantitatively inclined, you will need to read this carefully. Polinsky is extremely clear, but it will take time.
Questions on last page of Polinsky handout
This is writing assignment for Writing Group 5

3. Review of Appeals Can only appeal to change judgment
Need not cross-appeal to defend judgment on different grounds than used by trial court
Final judgment rule
Can only appeal when case is really over
Waiver
Can only appeal issues properly raised and presented in trial court
Harmless error
Appellate court only reverses if error really made a different
Standards of review
De novo – 12(b)(6), SJ, JMOL and other legal issues
Clear error – findings of fact in bench trials and other contexts
Abuse of discretion – when court has discretion
Amendment, sanctions, new trial, and nearly all discovery issues

4. Review of German Procedure
Control of sequence
Discovery
Witnesses
Experts
Appellate review
Judicial career

5. 1995 Exam

6. Intro to Settlement I Most cases settle
Roughly 2/3rds of filed cases settle
Some cases settle even before complaint filed
Roughly 5% go to trial
Roughly 20% dismissed (Rule 12) or terminated by summary judgment
Roughly 10% other – default judgment, plaintiff failed to prosecute, referred to arbitration, etc.
Settlement is contract by which plaintiff dismisses case in return for something valuable from the defendant
Usually money
Can be almost anything – job, house, letter of recommendation, apology
Often non-monetary terms -- Confidentiality/secrecy, return of discovery documents, payment of costs
Economic analysis of settlement
Settlement is attractive to parties because it enables them to save on the cost of litigation
Settlements is sometimes not possible, because parties are sometimes too optimistic about trial outcomes
Settlement is sometimes not reached, if the parties are too stubborn (strategic) in their negotiations

7. Intro to Settlement II Economic analysis of settlement
Settlement attractive to parties because saves on litigation costs
Total litigation costs often equal net amount plaintiff recovers
Suppose plaintiff wins $90,000
Usually pays one third to lawyer.
So plaintiff’s lawyer gets $30,000
So plaintiff nets $60,0000 = $90,000 - $30,000
Defendant usually pays lawyers roughly same amount: $30,000
So lawyers get $60,000 ($30,000 + $30,000) and plaintiff gets $60,0000
Defendant pays $120,000 = $90,000 + $30,000
If settle early, parties can both be better off
E.g. Defendant settles with plaintiff for $80,000
Of course, depends in part on how much parties have already invested in litigation

8. Intro to Settlement III
Economic analysis of settlement (cont.)
Settlement possible if it makes both sides better off than trial
Need to calculate outcome if case did not settle
Easy if trial outcome known with certainty
Plaintiff. Judgment minus lawyers fees. 90K -30K=60K
Defendant. Judgment plus lawyer’s fees. 90K+30K=120K
So any settlement amount between 60K and 120K would make both parties better off
Of course, may fail to settle because of hard bargaining
If trial outcome uncertain, need to calculate expected value
Expected value = probability that plaintiff will prevail x judgment amount if plaintiff prevails
Suppose 50% probability that plaintiff will get 100K
Plaintiff better off with settlement greater than:
(50% x 100K) – 30K = 50K – 30K = 20K
Defendant better off with settlement less than:
(50% x 100K) + 30K = 50K + 30K = 80K
So any settlement between 20K and 80K would make both parties better off
Of course, lots of simplifying assumptions….

9. Intro ADR ADR = Alternative Disputes Resolution
Mediation. Settlement negotiations with assistance from neutral person
Mediator does not have power to imposed settlement
Used with increasing frequency
Arbitration. Adjudication by private judge
Settlement is sometimes classified as ADR