SETTLEMENT NEGOTIATIONS, PRE-TRIAL STATEMENTS/CONFERENCES & MOTIONS IN LIMINE

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1 SETTLEMENT NEGOTIATIONS, PRE-TRIAL STATEMENTS/CONFERENCES & MOTIONS IN LIMINE Craig E. Frischman, Esquire Frischman & Rizza, P.C. How Early on Should the Negotiation Process Begin? Some cases settle before suit is filed. If plaintiff s counsel has solid basis to file a complaint, supplying a draft copy of that complaint (along with relevant expert reports and documents) to the defendant or defendant s insurance carrier before a lawsuit is initiated sometimes results in defendant s insurer being willing to discuss settlement before a lawsuit is filed. Incentives include avoidance of negative publicity about the insured s conduct, lower costs and likely lower settlement value. However, the majority of settlement negotiations occur following the completion of discovery and exchange of expert reports.

2 Who Initiates the Negotiations and How? If you have a good case, then don t be afraid to show it earlier rather than later. Remember, the squeaky wheel gets the grease. Get your case on the defense lawyer s radar by early provision of evidence and by moving your case toward trial expeditiously. The threat of a looming trial is a great motivator for all parties to pay attention to a case that should be settled. Types of Negotiations and General Considerations Whether pre-suit, during discovery once suit has been filed or on the eve of trial, there are various ways in which one can negotiate a successful outcome of a claim and avoid the uncertainties, time commitments and expense of trial not to mention the anxiety that goes along with a trial.

3 The Old-Fashioned Way of Working Matters Out In the past, things were worked out by way of frank and open discussion among lawyers, particularly if there was equality among the lawyers in skill, experience or knowledge of the case. Usually, these were situations involving a clear case of liability with low to moderate damages. If both sides have done their homework, then there should be no problem with having a face-to-face meeting, where the requesting attorney is indicating confidence in his/her client s claim or defense, yet has the humility to come to the opponent s den for an open discussion about how the case may be negotiated to a settlement that may be in the everyone s best interest. Remember the adage one attracts more bees with honey than vinegar. Face-to-Face Negotiations Can Go a Long Way Here s a good example of an effective face-to-face negotiation which involved defense counsel suggesting to plaintiff s counsel that the latter may want to come to the office to watch a little movie at which time plaintiff s alleged back injuries were hard to discern as plaintiff was videotaped doing flips on his kids backyard trampoline! Despite the clear negligence of the defendant, the value of plaintiff s damage claim was substantially diminished and the case resolved for an amount that defendant s insurance carrier felt equivalent to the cost of defense. Watch out for social media Facebook, Twitter, etc.

4 Mediation What is it and when is it used? Mediation is a more formal way of negotiating a successful resolution of a case, where one party approaches the other to see if there is interest in mediating, counsel discusses this with his/her respective client, and a decision is made. This popular method of alternate dispute resolution is usually reserved for those cases which are deemed somewhat meritorious yet too volatile or uncertain in their outcome should a jury decide the issues. Mediation The Ins and Outs Since a mediation is a private, voluntary process, it requires that the parties agree on a neutral mediator and the mediation is generally held at the mediator s office. Both sides sign a mediation agreement which contains information such as fees and confidentiality stipulations. The mediation fee is split equally among the parties (usually about $1500/party).

5 Mediation The Ins and Outs, Cont d About 1 week before the mediation, the parties CAN (but they don t have to) submit a confidential Mediation Statement (narrative section + relevant exhibits) not seen by the other side unless otherwise specified. The Mediation Statement can be a powerful tool of persuasion, where you have a chance to show the mediator the meritorious nature of your claim or defense and to provide ammunition to the mediator with respect to any counterpoints that your opponent is likely to raise. Mediation The Ins and Outs, Cont d On the day of the mediation, the parties and their counsel are present and the mediator will start by making a general statements as to the purpose of the mediation, his/her role in it, and will give counsel an opportunity to make a brief statement of their position. After both parties give their openings the mediator will break the parties out into their individual camps and will conduct shuttle diplomacy between the camps throughout the day.

6 Mediation Demands and Offers It is the general consensus that the first 2 or 3 offers (offers are made by a defendant in response to a demand) are not very telling of each of the parties respective positions regarding the value of the case. It is not until the 3 rd and 4 th go-around that the true range is revealed. Mediation What happens at the end? Hopefully, at the end of the day there is common ground upon which settlement can occur. If that s the case, then an agreement is signed confirming the amount of settlement and the lawyers then prepare the necessary documents to conclude the case (i.e. Release and a Praecipe to Settle/Discontinue).

7 Binding Arbitration What is it and when is it used? A binding arbitration is a rare yet effective, expeditious, and final way of resolving a case that requires third party participation. It s analogous to a non-jury trial yet one which is condensed into a very short time frame, rarely exceeding 1 day. Binding Arbitration The Ins and Outs Like a mediation, one person serves as the arbitrator yet the arbitrator is both judge, jury and executioner. While the Rules of Evidence are more lax than at trial, they are more formal than in a mediation setting. The arbitrator will hear abbreviated testimony from the parties and perhaps other fact and/or expert witnesses. Then, the arbitrator will hear a brief summation by each party. Finally, the arbitrator will make findings of fact and conclusions of law, and will render his/her decision. It is common for binding arbitrations to include a high/low agreement.

8 High/Low Agreement What is it and when is it used? A high/low agreement is one where there is likely going to be a verdict for the plaintiff yet the value is wide-ranging. The benefit of such an agreement for the plaintiff is the guaranteed amount that is the low amount agreed upon (even if defendant is found faultless or there is a lack of causation). The benefit to the defendant is that it caps or puts a ceiling on the maximum amount of payment that the defendant or defendant s insurer must pay. There are typically no appeals. Pre-Trial Conference What is it and when is it used? A pre-trial conference can be thought of as a condensed mediation. See Pa. R.C.P & Don t forget to check the corresponding local rules as some Judges can be sticklers! The pre-trial conference is generally held in the Judge s chambers without witnesses testifying or evidence being introduced. These conferences generally do not result in settlement, but they do afford the parties an opportunity to demonstrate to the Court the merit of the party s claim or defense.

9 Pre-Trial Conference The Pre-Trial Conference usually occurs just a week or two before trial so this is not the time to attempt settlement if one can possibly do so earlier by other means (mediation). The Pre-Trial Conference is in part a settlement conference and in part a conference to settle issues relevant for trial should settlement not occur. This may include argument on any previously submitted Motions in Limine, requests for additional voir dire and other matters that common sense would suggest a court would want to know before trial, instead of hearing about it for the first time on the first day of the trial. Make sure you know whether you re in a hot court, in which case be particularly ready to address all issues covered by the state and local rules. Don t forget your client! It is very important that your client is physically present for the Pre-Trial Conference. It may also be a good idea to bring an insurance carrier representative with authority to settle the case. Plaintiff s counsel should be ready to make a monetary demand to settle the case and have sufficient evidence to back up the reasonableness of that demand. Defense counsel needs to be prepared to make a monetary offer with evidence to support it or be prepared to defend the client s decision to offer no money. All counsel can benefit from listening rather than being heard at the time of a Pre-Trial Conference as it is an opportunity to obtain the perspective of a judge who likely has significant experience in knowing how cases generally play out before juries in that particular county. Pre-Trial Statement Remember to check BOTH the Pennsylvania Rules of Civil Procedure AND the local rules of the particular county in which the lawsuit is filed. Narrative Section BE EFFECTIVE! This is probably the only insight that a court conducting a later Pre-Trial Conference will review to get a grasp of that particular party s perspective on the case. Witness List (Remember to attach CVs and reports) Liability Witnesses, and Damage Witnesses, and/or Expert Witnesses Exhibits Include those exhibits to which you may refer and introduce at the time of trial. It is not required that all exhibits be attached to the Pre-Trial Statement. Usually, only the most important exhibits are attached out of abundance of caution this is essential if an exhibit has not been requested during the discovery phase of the case by your opposition. Voir Dire statement of 200 words or less in Allegheny County The Pre-Trial Statement is to be filed with the prothonotary, copied to the parties and usually copied to the trial judge (particularly in counties having individual calendars.)

10 General Considerations Regarding Negotiations to Settle CONFIDENTIALITY SUBROGATION COURT APPROVAL JOINT TORTFEASOR RELEASES STRUCTURED SETTLEMENT Confidentiality Confidentiality related to any settlement of the case is rather routine and part of the consideration of any settlement such that no party can publicize the details of any privately agreed upon settlement such as the amount of the settlement. Be aware of Dennis Rodman! See Amos v. Commissioner of Internal Revenue, 2003 WL (U.S. Tax Ct, 2003)

11 Subrogation In personal injury cases, there may be times when a third party (such as Medicare, Medicaid, or an ERISA based plan) may have a right of subrogation for a portion of any settlement monies obtained because that third party paid medical bills incurred by plaintiff due to defendant s conduct. PRIVATE insurance companies (i.e. Blue Cross Blue Shield) also sometimes possess subrogation rights. Court Approval Before settlement can occur, remember to obtain necessary court approval for any claim of a minor, incompetent or deceased person. For minor or incompetent, see Pa.R.C.P If no action instituted, then see Orphan s Court Local Rule 12.16G and Local Rule 2039 For deceased person, see Pa.R.C.P If suit is filed, then you can get approval from the Court of Record, Orphan s Court involvement is not required. (STILL TRYING TO FIGURE THIS ONE OUT!) If suit is not filed, then you must get approval from Orphan s Court. See Orphan s Court Division Rule 12.16F

12 Joint Tortfeasor Releases 42 Pa.C.S.A et seq. In the event that settlement cannot be reached with all parties in a multi-defendant case, plaintiff may settle with some defendants and proceed to trial against the other. The Release protects the settling party from any financial obligations to the plaintiff or non-settling defendant in exchange for the agreed upon amount of money for this settlement. The settling party remains a defendant in the case for purposes of trial and a jury is not informed of the Release. This bugaboo will be less of an issue with the Fair Share Act. Joint and Several Liability Law June 29, 2011 marked a change in Pennsylvania s joint and several liability law ( Act 17 ). It does NOT apply to a defendant whose liability has been determined to be 60% or more of the total liability apportioned to all parties. On or after this date, if a plaintiff cannot hold a non-settling defendant liable for 60% or more of the total liability, that non-settling defendant s share of the liability is that percentage of monetary damages for which that non-settling defendant has been found liable. Act 17 was meant to prevent plaintiffs from going after deep-pocket defendants who had limited liability by having them pay a monetary amount in excess of their fare share portion of liability as determined by the factfinder. In other words, you can no longer look to a marginally liable yet deep-pocket defendant to pay the entire verdict amount (so that the plaintiff is made whole) if that deep-pocket defendant is not found to be 60% or more at fault.

13 Structured Settlements A structured settlement is obtained through a specialist who will purchase an annuity with some of the settlement monies to be paid over many years to plaintiff or one to whom the plaintiff directs the proceeds (i.e. a Trust). In this situation, the principal is tax-free AND the interest earned on the principal during the time over which both principal and interest are paid out in regular sums is also tax-free. Motions in Limine This is a written motion to the court (and served upon the opposing party) for its Pre-Trial ruling on evidence a lawyer may want to limit or exclude before trial occurs so as to avoid the prejudice of an inadvertent introduction of this evidence and so that counsel knows what they are dealing with before the start of trial. Examples: Motion to preclude cumulative evidence such as multiple experts opining on the same subject matter; probative yet prejudicial evidence (i.e. crimen falsi conviction occurring may hears ago, lack of board certification by a defendant-physician), junk science opinions (Daubert/Frye case law), a preemptory strike of deposition testimony that is clearly inadmissible hearsay; relevance. Most motions in limine are, unfortunately, not ruled upon until close in time to trial (sometimes even on the morning of trial), so if at all possible, request that the court rule upon any vital motion in limine at least several days before the start of trial.

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