Parties often take an “all or nothing” approach to dispute resolution, or resolving a law suit.  By this, I mean that parties will give a mediation, settlement conference, or early neutral evaluation (“ENE”) one shot.  Oftentimes this can be two hours or less.  If the process fails, the parties trudge on with their dispute.  New evidence comes out, more depositions are taken, and the case is again in position for resolution, but the parties assume they have already given alternative dispute resolution (“ADR”) a go.  They thus miss a valuable opportunity to resolve a case short of trial.

As a mediator and litigator, I have noticed what often separates good mediators, settlement conference judges, and magistrates judges (who conduct ENE’s and Mandatory Settlement Conferences (“MSC’s”) in the federal court) is a willingness to follow through on a case and to keep a pulse on a case through the litigation process.  I have worked with several magistrate judges in the United States District Court for the Southern District of California who are required to conduct an ENE within 60 days of the defendant’s answer.  A case is often not ready to resolve at this early stage so the magistrate judge will order limited discovery on a particular issue, and will order the parties to return in a specified period of time.  This keeps the litigation and the parties focused on the germane issues.  Similarly, good mediators will often follow up in 30 or 60 days with a phone call or letter that lets the parties know that he/she is available if and when the parties want to return to the table.

If your mediator or judge is ineffective then it does not make sense to return to him/her in the context of attempting resolution.  But if the issue in the first instance was timing then it makes all the sense in the world to return to the person who is familiar with the personalities, issues, and evidence of your case.  I would stress that it is important to keep the lines of communication open, both among counsel and with your mediator or judge, so that you may return at some future date when the case is ripe for settlement.

Washington D.C. monument, taken during thunder storm on a recent family vacation.Upon taking in a new file, it is my job to marshal as much evidence as possible in order to ascertain the strengths and weaknesses of your case.  I believe it is important to negotiate from a position of strength.  It is also important to know when in a particular cycle you are going to be in the strongest negotiating position.

I have a colleague who is working on a sexual harassment case that is in the pre-litigation phase, meaning he has not yet filed a case against the prospective defendants.  There is no dispute that the harassment occurred.  There is no dispute that my colleague’s client had given notice to her employer of previous harassing behavior by her supervisor.  It is unknown at present, however, if there had been other prior complaints to the employer regarding this supervisor’s harassing conduct.  My colleague has a strong case now.  Assuming he has done a thorough and accurate job assessing his client’s credibility and likability (meaning, will the prospective plaintiff appeal to the jury), his case can only get stronger as he initiates litigation.  Even if there are no smoking guns out there with respect to prior complaints, he still has a strong case.  There is little risk to taking a hard line approach now to the negotiation process and initiating litigation quickly if the defendants are not properly motivated.

Certain types of cases are conducive to early resolution, while others require that evidence be collected, generally through the formal process of discovery, before they can be resolved.  Injury cases are generally pretty clear early on as to liability (who was at fault) and damages (the monetary value of the injuries).  The issue in those cases is getting all of the records together to make a proper evaluation, which should be completed prior to litigation.  A comprehensive client interview should also occur at the outset to determine whether the prospective plaintiff or defendant is going to be a sympathetic witness.  Business disputes, on the other hand, are generally document-intensive.  Even a “simple” contract dispute may require collection and review of hundreds if not thousands of pages of records.  And other cases, such as the aforementioned sexual harassment dispute and insurance bad faith litigation, are generally going to require significant discovery within the context of litigation before they are ripe for resolution.  In those cases, the plaintiff is attempting to show a pattern and practice of a given type of conduct, and those smoking guns are only going to be unearthed with significant effort and legal wrangling.

As a client, it is important for you to ask your lawyer what evidence he/she needs in order to move your case forward, and how you can help to get that information together.  As a lawyer, having a client who is actively engaged and responsive makes our job representing you infinitely easier.  Remember - I need your help in the same way that you need mine.

So, you have a dispute, maybe a lawsuit, what happens next?

Many clients express concerns that if a case is not resolved prior to the filing of a complaint, which initiates the litigation process, that it will not have further opportunity to be resolved by way of a pre-trial settlement. However, the reality is that there are several stages to a dispute, each with a dispute resolution mechanism either built in or available:

(1) Pre-litigation: Generally speaking, there is an opportunity to resolve a dispute or a claim prior to initiating litigation. In some instances, it is appropriate and necessary to shoot first and ask questions later, meaning that you skip past a pre-litigation attempt to resolve your dispute. The majority of the time, however, it is in your best interests to see if you can resolve a case before it is filed in one of the California Superior Courts.

There are several reasons that it makes sense to try to resolve a dispute before it becomes a litigation case: First, neither side presumably has incurred much in the way of costs or fees in the pre-litigation stage. Therefore, each side should have more flexibility and room within which to work in attempting to negotiate an agreement. (This is true for both contingency fee cases and hourly cases; generally speaking, contingency fee agreements call for a smaller percentage of the gross recovery pre-litigation versus once the complaint has been filed.) Second, there is generally less emotion to block the path to resolution in the pre-litigation phase of the case. Once the matter enters litigation, it is much more likely that one of the parties will become emotionally entrenched and will start making decisions emotionally as opposed to rationally. Third, once the matter enters litigation, there is generally going to be a discovery process (more below) that requires the expenditure of certain costs and fees. This process, as detailed below, is not only time-consuming but can also be costly.

(2) The CMC: A litigation case is started by filing a complaint in one of California’s Superior Courts. After the complaint is filed, the defendant(s) has 30 days to answer. Generally speaking, filing and service takes anywhere from 2-4 weeks. For planning purposes, you can estimate 60 days from filing of the complaint until the defendant files a responsive pleading. In San Diego, the Superior Court orders a Case Management Conference (“CMC”) within 90 days of the defendant’s filing of a responsive pleading. At the CMC, the parties will have an opportunity to select an alternative dispute resolution (“ADR”) procedure, including mediation or a settlement conference. Thus, within 6 months of the filing of the complaint, the parties will generally have a second opportunity to resolve the case.

(Note: in Federal Court, there are different ADR processes and procedures available. The District Court for the Southern District of California orders an Early Neutral Evaluation (“ENE”) in front of the magistrate judge within 60 days of the defendant’s responsive pleading to the complaint. This is effectively an early settlement conference that takes place in front of an eminently qualified and experienced federal judge.)

(3) Discovery: It is important to know the facts of your case before you enter into settlement discussions. It is also important to know what evidence the other side has and will be producing at time of trial. These are factors that ultimately influence the value of the case. The discovery process includes written questions (interrogatories, request for admissions, and request for production of documents), oral questions (depositions), and document subpoenas to third parties. While this process can be time-consuming and costly, it can also be extremely valuable. Oftentimes, this process will lead to the “discovery” of a case-changing document or witness statement. A case-changing event can often lead to expedited settlement discussions and, if the stars align, resolution.

(4) Pre-Trial: Should the matter make it all the way to the eve of trial, courts will often order the parties to attend a settlement conference in front of a Superior Court judge in order to give the case one last chance to informally resolve. There is also the possibility of resolving a case “on the courthouse steps,” which may entail jury selection and can even include making opening statements and taking trial testimony. It is never too late to settle, but at the same time pushing your adversary into court with hopes of then resolving your dispute is a very risky game of chicken and is generally not advisable.

There is nothing precluding the parties from initiating settlement discussions at any point. While it is important to negotiate from a position of strength, sometimes you are forced to try to resolve a case wherein the evidence is stacking up against you. I call it “pulling the parachute.” You may also hear me talk about good money chasing bad money. (The flip side of that is when the evidence stacks up in your favor. You may hear me talk about “holding the cards.” If we’ve got the cards, we’re not going to overplay them. But we’re going to play them.) These are discussions every lawyer should have with his/her client in order that the client can make a logical, informed decision as to how to proceed. As set forth above, there are many mechanisms built into the process to allow parties to resolve their disputes informally.

The most important thing a client wants to know is how much his/her case is worth. Sometimes the assessment is fairly simple: there are monies owed pursuant to a contract that have not been paid. I recently had such a case in the context of public works construction. That case became more complicated, however, when additional elements of damages were factored into the equation. My client, a subcontractor, was also entitled to prompt payment penalties (Cal. Pub. Contract Code § 7107; Cal. Bus. & Prof. Code § 7108.5), interest, and attorney’s fees. Having a firm grasp on the underlying contract damages made the job of calculating the remaining damages much easier. At that point, the question became what the client would accept to resolve the case short of trial.

Some cases are not as easy to assess. For example, I have been working on a number of internet piracy cases. I have a client who is an industry leader in his field. He has registered copyrights on his web site content. In attempting to enter that field, several different entities and individuals have simply cut and pasted material from my client’s web site. Statutory damages for willful infringement of a copyright range from $200 to $150,000. (See http://www.copyright.gov/title17/92chap5.html.) So if someone has taken 2-3 pages of copyrighted content verbatim, is that infringement worth $200 or $150,000? I have conducted extensive research for verdicts and settlements on these internet piracy cases to ascertain that the infringement may be worth anywhere from $25,000 to $75,000 per infringement. (Note: this assumes that there are no actual profits made by the infringer and/or actual damages incurred by my client.)

The value of a case may also change throughout the pendency of the litigation. I have had cases that appeared to be $100,000 cases when they came in the door only to find, through the discovery of adverse evidence, that the case was only worth $30,000. I have also had cases that appeared to be $200,000 cases that ultimately resolved for several times that amount. Sometimes the evidence falls in your favor, sometimes it doesn’t. There are always risks to litigation: There is the risk that evidence will be unearthed during discovery that is adverse to your claim or case. Then there is the risk that all of the evidence will fall in your favor, but a jury will not be sympathetic to you or your case.

One of the most important things I do is to minimize your risk, and to help you understand the level of risk. It is my job to constantly and continually evaluate and re-assess your case, and to communicate these assessments and evaluations to you. There are several steps I take to make sure we are headed down the right path. The first is to always understand the evidence as it currently stands. The second is to obtain the strongest evidence that will help us prove our case or disprove the opponent’s case. The third is to conduct whatever research is necessary or appropriate to ensure that we have the proper documentation to substantiate our position. The issue is not whether or not there are going to be curveballs; the issue is whether you can hit the curveballs when they inevitably come.