Judge William J. Haddad (Ret.)
Honorable William J. Haddad (Ret.)
(Copyright ©2012 Hon. Wm. J. Haddad – Chicago, IL. All rights reserved.)
In planning a pre-trial settlement conference before a trial judge, it is important to select matters that fit the judge’s abbreviated schedule. More complicated cases should be referred to formal, outside mediation. Pre-trial statements are appropriate. In some cases it may be helpful to bring the client to the conference to meet the judge and observe.
In preparation of the settlement conference both sides should evaluate their settlement authority. In the real world the initial “demands” and “offers” preceding the conference may look unrealistic, but may serve as a useful tool for the parties to formally posture their respective positions and leverage the opponent. What is relevant is whether or not both sides have, what we call, “authority” to settle the matter, and “flexibility” to move toward settlement. Any good faith effort to settle a matter requires two elements: settlement authority and flexibility. Therefore, the parties must send attorneys with extensive knowledge of the case, settlement authority and flexibility.
Selecting a pre-trial judge is the first mutual decision the parties must make in preparation of a settlement conference. Attorneys should select a judge who has the ability and instincts to facilitate the settlement process by enabling the parties to focus on the issues to reach an agreement. The judge should be proactive in guiding and supporting the attorneys, and even leveraging lienholders and third party interests. The judge should have a realistic understanding of the obvious issues of fact and law, but also have some insight into the less visible subtleties stressing the positions of the parties. Cases are seldom free of collateral impediments to settlement such as the personalities of the participants, liens, or third party claims.
Preparation of the Pre-Trial Settlement Memorandum
A pre-trial statement is a captioned document delivered to the court within 2 to 5 days of the pre-trial (or as designated by court rule) that usually includes such items as contact information on the attorneys on each side, the date(s) of loss, a discussion of liability, a discussion of injuries or damages, damage calculations, the demand and the offer (if any). In some cases they are “confidential”.
The pre-trial statement should be “fresh”, thorough, and concise, and not a pro-forma recitation of worn language borrowed from other documents. It should stress the strengths of each side, including the theory of liability, the extent of injury and causation. Finally, it should not expose unobvious weaknesses of the party, but should inform the judge of the facts without embellishment or argument.
Demands and Offers
Great scrutiny should be made of the first numbers posited in the statement. The demand should be reasonable, but also high enough to cover future exigencies such as greater than anticipated medical bills. They say “it’s easer to reduce a demand than increase it”. The offer should also be carefully considered. It should be high enough to signal that there is good faith authority to settle, but not so high as to “raise the stakes”.
The reality of demands and offers come to bear in judge’s chambers, not on the face of the statement, during court sanctioned ex parte, confidential “one on one” discussions with the pre-trial judge.
Narrowing the Issues
In most personal injury matters there are three issues: 1) The wrongful act—whether the defendant acted negligently or wrongfully; 2) The Injury—whether the plaintiff was injured or suffered damages; and 3) The Causation—whether there is a nexus between the injury and the wrongful conduct.
However, in most pre-trials there are two issues: 1) Exposure—whether each side realizes the strengths and weaknesses of each’s case; and 2) Authority—whether each side has sufficient authority to settle.
Actual “settlement value” is a misnomer. Settlement value is NOT what the parties believe their case is worth, but rather the number “that works”.
Strategies during a Pre-Trial
It is important to impress upon the judge and the opposing counsel the merits of your case, but always in a professional and businesslike manner. The pre-trial is not a “trial”. Attorneys can be persuasive without being argumentative or overbearing.
At the outset of the pre-trial the parties should be prepared to briefly present to the judge an oral statement which would include a factual basis for liability and damages. An opening statement should clear the air on what is important to accomplish that day. It should present the facts of the case “factually”. It might be augmented with pertinent diagrams, photos, and other depictions of potential exhibits, excerpts from documents, statements and depositions. Also, the parties should be prepared to educate the judge on the law of the case.
The key negotiation technique is “The Art of Compromise”. The stated demands and offers are sometimes unrealistic, but a good starting point. To achieve compromise, the best tact is not to argue against a party’s position, but to work with your opponent a bit until they can be convinced to reposition to a closer number. Best and worse case scenarios can be bolstered by citing verdict reporters. The ultimate strategy is to ferret out an offer or “number” that will achieve settlement at a figure that meets the realistic expectations of a party’s client as well as the case value.
Some parties employ subtle strategies to use the pre-trial to test the facts and law as against the other party. This is a by-product of every pre-trial. Parties look to the vulnerabilities of the other’s case on central issues such as, for example in injury cases, contributory fault, overtreatment, and pre-existing conditions. If liability is questioned, perhaps the jury verdict reporter is a useful source of statistics; for example, the statistical attrition of “fall down” cases that succeed at trial.
Some attorneys and mediators engage in a sort of risk-benefit analysis by clearing the air as to the benefits of reaching finality through an early settlement rather than risking the uncertainty of trial, negative outcomes, and the certainty of litigation costs and fees.
Caucusing with the Judge
At the outset of the pre-trial conference the attorneys should identify themselves to the mediator and each other, and exchange business cards. They should identify the lead attorney for follow-up contact. Everyone has a distinct role in a pre-trial settlement conference.
The attorney’s role is to advocate his party’s position, but also by making a good faith effort to understand and acknowledge the other party’s position as to the facts and law and becoming fully engaged.
The judge’s role is invaluable during the “One-On-One” caucuses. After the initial joint session with all of the parties, the parties should meet individually with the judge. Court rules in most jurisdictions provide for private, ex parte settlement conferences. This way the parties are able to share confidences with the judge. This promotes more candor and gives the judge a bird’s eye view of the realistic chances of settlement.
Use this time to educate the judge as to additional facts and law that strengthen your position, and weaken the opponent’s. The goal is to bring the neutral ground closer to your side, and provide the judge information to leverage the other side.
As arbiter, the judge can be a conduit of messages between sides. The private caucus also enables the judge to achieve some idea of a party’s “real authority” and flexibility. No one wants to be” locked in” to a position until they perceive good faith on the other side.
Attorneys should privately discuss whether to even evoke a recommendation from the judge. There may come a point where it appears that there is no realistic chance of settlement. In that case a judge’s recommendation without some knowledge of its appeal may weaken a party by locking them into an unwanted position in the future.
The judge’s role should be proactive, but also neutral. The judge should try to give equal time to both sides while influencing the parties to meet at a realistic position which is not necessarily in the middle. It may rest at or near the offer or the demand, depending upon the merits of each side.
The judge should be a facilitator, but not a dictator. He should facilitate the parties in reaching a resolution without imposing solutions. Judge’s should be expected to avoid being overbearing, humiliating, or ridiculing a position. As facilitator, the judge can bring the parties to understand their strengths and vulnerabilities and, thereby, ultimately identify the prospects of an agreement.
Judges have the unique ability to share real life trial experiences with the parties to underline the risks of a jury trial. How will a jury will react to the strengths and weaknesses of the evidence? Will the witnesses “flip” with unexpected testimony? Will the trial judge rule on important motions as expected? Will the attorneys perform predictably? Although the verdict reports are informational, they do not reflect the uncertainty and risks of the human factors which impact a trial. Judges have first hand experience of jury trial trends in the courthouse.
Driving to a Settlement Agreement
By employing noncommittal, nonspecific rhetoric in these sessions, an instinctive judge may sense a settlement figure even though both sides cannot formally declare it. Indeed, both sides may formally disown a judge’s recommendation, while informally welcoming the opportunity to use it to bring the client to a compromise figure.
Hopefully, the judge will have an opportunity to meet with the clients to encourage confidence in the process. To accomplish this, the judge may show empathy and understanding of the client’s position. Also, where appropriate, the judge can exhibit support for the attorneys in order to build confidence and trust in future recommendations. The judge should be careful not to speak down to the client, but never surrender the majesty of the position of the court.
Finally, judges can use their power to resolve collateral issues which impede settlement such as lien problems, third party interests and claim, distributions of proceeds, and enforcement of agreement. In particular, lienholders and interveners very often hold the key between settlement and trial. Where useful, they can be included in the conferences. Judges can foster more cooperation among lienholders and, on occasion, adjudicate their interests to facilitate settlement.
If there is a settlement, it should be clearly expressed to all sides at the conclusion of the conference and someone should be designated to draw up the formal settlement papers. In some cases, the terms in the settlement are inserted in the body of the settlement dismissal order. The settlement dismissal order should include terminology that allows the court to “retain jurisdiction” for enforcement of the settlement and to arbitrate any outstanding liens.