Case evaluation helps clear busy trial calendars

October 18, 2010
| By Bill Rohn |
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(Editor's note: This piece was published in the Business Journal in 2006. Its essence still applies today.)

A settlement process known as "case evaluation" continues to shorten the period of time consumed by Michigan civil litigation.

Case evaluation allows lawyers to summarize and argue cases before independent case evaluators, who respond with evaluations of cases before trial. Though the hearings were initially viewed with suspicion by trial lawyers, who were more comfortable before judges and juries, the process has gained widespread acceptance.

Case evaluation has proved to be of value in promoting settlements and clearing crowded court dockets. It also has altered the way in which cases are prepared, as the likelihood that disputes will go to trial continues to decrease.

The case evaluation rule

The Michigan case evaluation rule states that any civil action in which the relief sought is primarily money damages or a division of property may be assigned to case evaluation. Few cases have been deemed unsuitable for the process, and some judges assign every civil dispute to case evaluation or an alternative process known as facilitative mediation.

Kent County's three-member case evaluation panels are comprised of lawyers who are members in good standing of the Michigan Bar and who have at least five years of experience.

Case evaluation hearings typically take place following the "discovery period," which is the period during which litigants may formally discover (through pretrial investigation) the facts that their adversaries intend to prove at trial. The lawyers present the case evaluation panel with written briefs plus oral summaries of key facts and law.

Each lawyer is allowed 10 to 20 minutes for argument at the hearing. No witnesses are permitted, but attorneys often summarize expected trial testimony. Most hearings conclude within 25 to 45 minutes.

After listening to the lawyers' presentations and questioning about matters of concern, the panel issues an "evaluation" indicating the dollar amount at which it believes the case should settle. For example, the panel may respond to a plaintiff's request for $350,000 and a defendant's response that no money should be awarded by evaluating the case at $350,000, zero dollars, or any amount in between.

Sanction for rejection

Within 28 days after receiving the panel's evaluation, all parties must either accept or reject the evaluation. If all parties accept, a judgment enters for the amount of the evaluation, and the litigation ends.

A party who is dissatisfied with an evaluation may reject it, thus signifying a desire to go to trial. However, when the case evaluation panel issues a unanimous decision, a rejecting party who does not "improve its position by more than 10 percent" at a subsequent trial must pay all costs incurred by the opposing party after the date of rejection.

Thus, if a panel unanimously renders a $100,000 evaluation that is rejected by the plaintiff, the plaintiff must win more than $110,000 at trial or be held responsible for the defendant's litigation costs incurred after the rejection.

Success in Kent County

Statistics provided by Kent County Alternative Dispute Resolution coordinators illustrate case evaluation's value. In 1982, 33 cases were assigned to what was then a new process known as "mediation." During 2002, 379 cases were assigned to case evaluation and all parties accepted the case evaluators' evaluation in roughly one-third of the cases evaluated.

In 2005, 312 hearings resulted in 89 decisions that were accepted by all parties, for a settlement success rate of 28.5 percent.

Even when case evaluation does not result in the resolution of a case, the process often increases the prospect of settlement because one or more parties accepts the award, thereby sending a clear signal concerning the amount at which it will settle, regardless of its settlement position prior to case evaluation.

Effects of case preparation

The existence of case evaluation has also caused cases to be prepared with an eye toward creating a record for case evaluation. The fact that the hearing may be a party's only day in court has increased the efforts of attorneys to establish a concrete record of evidence well before trial.

Cases also must be prepared more quickly. Some Michigan circuit judges now assign disputes to case evaluation shortly after the defendant's answer is filed.

Finally, the threat of having to pay an adversary's actual legal costs if a case evaluation is rejected increases the pressure to settle out of court.

In Kent County, the success of the case evaluation program is regularly attributed to the willingness, hard work and experience of the attorneys who serve on the panels. The Kent County process is also noted for the extra time and energy put into the hearings by the case evaluators.

Bill Rohn is a trial partner with the law firm of Varnum, Riddering, Schmidt & Howlett LLP.

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