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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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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All Rights Reserved.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
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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)
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
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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)
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
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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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All Rights Reserved.
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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
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
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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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All Rights Reserved.
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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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All Rights Reserved.
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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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All Rights Reserved.
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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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All Rights Reserved.
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31. Federal Arbitration Act
 Voluntary arbitration agreements in
commercial contracts are
 Valid
 Irrevocable
 Enforceable
Civil Litigation: Process and Procedures © 2009 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
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