The document discusses settlement of civil litigation cases and alternative dispute resolution. It notes that most cases settle prior to going to trial through negotiated settlement. The parties assess costs and work to determine realistic values of the case. Settlements help avoid direct costs of trial as well as indirect costs like time and stress. Factors that influence settlement for plaintiffs and defendants are examined, such as uncertainty of juries, costs of litigation, and strength of facts. Negotiation strategies and documentation to support settlement values are also reviewed.

1. Civil Litigation:
Process and Procedures
Chapter Five
Settlement and Alternative Dispute Resolution

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)
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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18. Release
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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
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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)
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21. Alternative Dispute Resolution
 ADR includes
 Negotiated settlements
 Arbitration
 Mediation
 Neutral fact finding
 Early neutral evaluation
 Mini-trials
 Summary jury trial
 Private judging
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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
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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)
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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)
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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
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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
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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
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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
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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)
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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
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31. Federal Arbitration Act
 Voluntary arbitration agreements in
commercial contracts are
 Valid
 Irrevocable
 Enforceable
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