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Early Neutral Evaluation: An Additional Tool for Resolving Disputes

January, 2012  | By J. Snowden Stanley, Jr.

There are numerous methods available to avoid the time and expense of a trial before a judge or jury if the parties to a dispute wish to do so but are unable to resolve their differences by direct negotiation. Mediation and arbitration are two examples of such devices which can be very useful in this effort. Early neutral evaluation is another tool which has been employed with success in certain areas and can be adapted to assist the parties in focusing their efforts on real issues in a dispute and in achieving settlement if they wish to do so. Sometimes, the parties may request a neutral evaluation of one issue which is impeding the resolution of their dispute.

Early neutral evaluation is a confidential process in which each party presents the factual and legal basis for its claims and defenses and the evidence upon which those claims and defenses are based to a trusted neutral with expertise in the substantive area of the dispute. The neutral then renders a non-binding written evaluation of the positions of the parties in the dispute The parties can then proceed to negotiate a resolution of the dispute on their own or with the assistance of the neutral as a mediator.

When an evaluator is selected, he or she schedules a preliminary conference with counsel to describe the procedures to be followed, to identify issues which need to be developed as part of the preparation for the evaluation session including any limited discovery, discuss matters which are to be included in the written statements which will be exchanged and to set the date for the early neutral evaluation session.

The parties submit to the evaluator and each other their confidential statements at least a week prior to the evaluation session. At a minimum, such statements should include a summary of the factual and legal basis upon which each party believes that it is entitled to judgment or an award in its favor and a list of the persons expected to attend the evaluation session.

The early neutral evaluation session is confidential, and no record of the proceedings is kept. After opening remarks by the evaluator, each party makes its substantive presentation of the key issues in the case and the evidence which they believe supports their entitlement to a judgment or award.

These presentations should be informal. No cross examination is permitted, and no rules of evidence are applied. They may be submitted solely through counsel or may include statements by parties or witnesses. Following the initial presentations, each party may be given an opportunity for responsive substantive presentations. The evaluator then will seek to identify issues on which the parties seem to agree, any issues which would not seem to determine the outcome of the litigation or arbitration and the important issues as to which there appears to be dispute. The parties are offered an opportunity to comment on, clarify or even agree with this description.

Within an agreed period of time the evaluator prepares a written evaluation of the claims, defenses and issues raised in the case and the likely resolution of the case if it is not settled.

If the parties agree, the evaluation can be presented simultaneously to both sides who can use it as a basis for further settlement discussions. If preferred, the evaluator can temporarily withhold the evaluation and proceed to act as a mediator and help the parties explore settlement. If the matter is not resolved by that process, the evaluation can be presented and used in the further discussion of settlement or the development of factual and legal issues necessary to prepare the matter for resolution by settlement or trial.

Advantages of Early Neutral Evaluation.

  • The evaluator is chosen for his or her neutrality and substantive expertise in the subject of the dispute.
  • In the preliminary conference the evaluator can help the parties focus on the key issues between them and plan an evaluation session appropriate to the dispute with which they are dealing.
  • The confidential written submissions provide an opportunity for each side to understand the essential factual and legal basis for the positions of each party.
  • The substantive presentations by the parties at the early neutral evaluation session (and any responsive statements) provide an opportunity for each side, as well as the evaluator, to understand the essential points to be made by each party.
  • Questions by the evaluator to clarify or probe the positions of each party can focus attention on critical issues while assigning others to a lesser role in the analysis of a case.2
  • The non-binding written evaluation, prepared after a full exploration of the important issues in the case, can provide a substantive basis for efforts to settle the case before or after it is presented to the parties
  • If the parties are not ready to settle after the evaluation is presented to them, the evaluator can still assist in focusing attention on the critical issues and essential discovery steps necessary to prepare the case for trial or later settlement efforts

For further discussion of early neutral evaluation and the possibility that it might be a useful tool in resolving a particular dispute, please contact our principals, Snowden Stanley (410-576-4811, jstanley@semmes.com) or Jim Johnson (410-576-47121, jjohnson@semmes.com).