NEGOTIATE SETTLEMENT TASK 75

1. WHAT AND WHY
   1. You have an obligation to your client and to the court to negotiate in good faith to settle your case before trial.
   2. A well-prepared, negotiated settlement can save substantial costs, reduce the risks associated with trial and provide maximum benefits to your client.
      
2. WHEN
   1. Begin negotiations after you know the facts and have properly evaluated the case. See Task 74, Analyze Damages and Remedies.
   2. The best time to begin serious negotiations is when your opponent is vulnerable. For example:
      1. Before your opponent has the opportunity to fully evaluate his or her case, or to see the weakness in yours.
      2. After you discover information that hurts your opponent's case.
      3. When your opponent is about to incur substantial litigation expenses.
      4. When your opponent waited too long to begin discovery and will be unable to complete it before the trial date.
      5. After key depositions.
      6. After arbitration or mediation sessions.
      7. When one of your opponent's key witnesses or experts becomes unavailable.
      8. After an adverse ruling by the court.
3. HOW
   1. Carefully review your file and proof outline (see Task 74). Be completely familiar with them before beginning settlement negotiations.
   2. Review Task 74 to evaluate your case's value.
   3. Contact your client and discuss settlement. Make sure you understand your settlement authority and what, if any, conditions your client want to meet in settlement.
   4. Follow this step-by-step guide to formulate a negotiation strategy:
      1. Define the parties' issues and positions. Investigate their interests, i.e., subjective factors, such as ideals, traditions, time factors, biases, alliances, or other hidden agenda items that may drive the bargaining process.
      2. Define the result your client seeks so you can define your settlement objectives, such as:
         1. Money
         2. Performance of an obligation or fulfillment of an agreement
         3. An agreement to take action or desist from activity
         4. Disposition or property
         5. An acknowledgment of rights or obligations
         6. Ratification or verification of an agreement by a third party
         7. Power, retribution, vindication, etc.
      3. Establish the parameters for the settlement negotiations.
         1. Determine your client's bottom line needs (i.e., what your client must have from the settlement).
         2. Evaluate your client's ultimate risks (i.e., what your client cannot afford to lose if the case does not settle).
         3. Identify deal-breaking points that may sabotage negotiations.
         4. Evaluate the extent to which your client is a risk-taker.
         5. Ascertain whether your client has a hidden agenda or unrealistic goals (e.g., power, retribution, vindication) that you must address before your client can meaningfully negotiate a settlement.
         6. To the extent possible, identify the opposing party's needs, risks, deal-breaking points, level of risk-taking, and unrealistic goals. Look for leverage from issues such as the party's financial difficulties, the party's reputation concerns or any special consequences of litigation.
      4. Conservatively evaluate the strength of your case for trial.
         1. Research the law on the liability and damages issues.
         2. Evaluate the known and probable witnesses, documents and other evidence.
         3. Objectively consider the strengths of your opponent's defenses, in terms of the law and the evidence.
         4. Examine how a jury will view the relative equities of the parties' competing interests. Assuming that the law and evidence are weighed equally on both sides, which party is a jury likely to favor?
      5. Consider the problems they didn't tell you about in law school. Determine whether:
         1. Your client understands that alternative dispute professionals are in the business of compromise, that judges often are forced to orchestrate compromises with little time to vindicate the righteous, and that juries are unpredictable.
         2. Your client has the financial staying power to litigate through trial and on appeal if necessary. Consider whether the client will be able to pay your bills and for experts, transcripts and other costs.
         3. Your client can withstand litigation delays.
         4. The decision-maker supervising the litigation on the other side has internal problems (e.g., power struggles, erroneous early case evaluations) that may obstruct his or her ability to implement a comprehensive trial or negotiation strategy.
         5. A judgment is readily collectible.
         6. Either party is laboring under artificial time restrictions.
   5. Litigation settlement tactics:
      1. Who should make the first move? Normally, the plaintiff is expected to open settlement negotiations. However, the defendant can make an offer or call upon the plaintiff to make a demand. It usually is advantageous to get the other side to commit first. The object is to discover the range in which the other side will settle and the basis for any offer or demand. Beware of an unrealistic demand or offer that is not a good faith commitment to negotiate a dispute, but is an attempt to entice you to make concessions or commit to a settlement range. When you have the advantage of getting the other side to commit first during settlement negotiations, remain receptive and do not interrupt or argue.
         1. Your initial offer or demand should not be too extreme, nor should it state your bottom line. If it is too extreme, there is no incentive to bargain. If you claim to have revealed your bottom line, the other side will distrust you and you will have almost no room to negotiate further.
         2. Substantiate all real offers. Well-documented demands enhance credibility. Obtain a professional and objective analysis of how much you are entitled to. Be prepared to prove your demand to the satisfaction of a neutral third party before you submit it to the other side. Refer to jury verdict reports, similar settlements, accounting analyses, comparable sales, etc.
         3. If you want money, tell your opponent how much and why. As soon as possible, give the other side a detailed Statement of Damages that is supported by the law and evidence. Deal with concerns that you will state your damages too low by explaining that the Statement is based on evidence available at the time, and that you will promptly amend it when more information becomes available.
         4. Put settlement demands in writing.
            1. Demand letters can be used to provide notice to insurance carriers, preserve claims and satisfy mandatory prerequisites. Include explanations of the facts that will help persuade the other side to settle.
            2. Settlement demand letters also can be phrased so as to constitute an Offer of Judgment under FRCP 68. See Task 76.
            3. Always refer to the inadmissibility of settlement overtures in evidence. FRE 408.
      2. Understand the special art of offer and counteroffer:
         1. Entice movement. However, do not fall victim to the argument that you must move in an amount equal to the other side. The party who begins from an unrealistic starting point usually demands equal movement by the other side. Develop counteroffers or counterdemands that can be independently substantiated. Do not simply react to the other side's offer.
         2. Plan your use of concessions. Grant concessions when necessary. Obtain comparable concessions in return. Consider the timing of concessions. The party who wishes to settle early usually is the party who has to make more concessions. Identify your opponent's special needs that you can satisfy at a low cost in order to close the deal. Do not offer concessions prematurely. Unless you get concrete concessions, do not make a counteroffer.
         3. Use artful settlement language that preserves flexibility. You can change your position without loss of face if you qualified an offer with a statement that the offer was based on what I have heard up to now. For example, a settlement offer around $100,000 conveys a message, but suggests a willingness to engage in further negotiations. However, do not resort to offers in a range.î The upper end of any range that the plaintiff demands is the plaintiff's real demand, and the lower end of any range that the defendant offers is the defendant's real offer.
         4. Where defendant's conduct has been particularly offensive or outrageous, argue for punitive damages notwithstanding that they are rarely awarded at trial and, if awarded, are frequently remitted or stricken. BMV v. Gore, ___ U.S. __, 116 S.Ct. 1589 (1996). The real leverage to be gained from a claim for punitive damages is that it may persuade the defendant to accept your settlement offer in order to avoid particularly harmful evidence of misconduct or embarrassing evidence of the defendant's wealth from being introduced at trial.
   6. Consider these general tips and techniques:
      1. To make real progress, negotiate disputes in person, if possible, or by telephone. Litigators tend to posture if they are forced to put their offers in writing.
      2. Suggesting settlement does not convey weakness. Do not be afraid to suggest settlement negotiations any time, whether you represent a plaintiff or defendant. Raise settlement without conceding weakness by using the context of cost savings, the need for timely solutions and the fact that local rules require settlement negotiations. To convey strength and confidence, be prepared to drop settlement overtures that are rebuffed.
      3. Negotiate with confidence. Be conscious of body language. Make eye contact with the opposing party when you state a dollar amount or emphasize your case's strong points. An averted gaze suggests a lack of sincerity or confidence.
      4. Avoid gamesmanship. Use a fact-based approach to negotiations. Do not indulge in empty threats, argument, ad hominum or attacks on credibility. Avoid grandstanding tactics such as final offers and escalating demands (these are rarely successful, unless the party has an overwhelmingly superior bargaining position).
      5. Set the pace. Offer to arrange the settlement meeting, and then set the agenda. The other party may accept your agenda by default; thus, you will define the objectives, control the formalities and influence the outcome. Keep the flicker of hope alive, remain accessible and do not impose unnecessary deadlines.
      6. Be alert to illusory offers. Make concrete proposals and demand concrete responses. Beware of would you take it if I could get it's offers.
      7. Use common points of reference to encourage joint problem solving. Draft sample agreements to use as negotiating tools. Use an easel or blackboard which all parties can refer to in discussing an issue or outlining corresponding settlement demands.
      8. Violate the role of cross-examination and ask Why? Master the evidence and look for uncontested issues of fact to establish common grounds of understanding. When the other party will not agree about apparently uncontested matters, ask Why? The answer can provide useful discovery and insight into the other side's hidden agenda.
      9. Evaluate whether the other side is serious about going to the mat. Powerful leverage that every party has in litigation negotiation is the fear that he or she is ready, willing and able to go to trial. Winning may be uncertain but the fear of trial for some litigants is overpowering. Never let it be known that you fear a trial if you wish to avoid a trial.
      10. Silence can be golden. Silence can force the opposing party to provide further explanations and concessions, and can be particularly effective to apply pressure, especially in response to an excessive demand or statement.
      11. Beware of artificial obstacles, such as a limited pot or restricted funds.
      12. Note that settlements often occur just before a deadline. Indeed, most serious litigation settles on the courthouse steps. A skillful negotiator should project a willingness to go to trial until the very end.
      13. Divide the cake, not the frosting. Do not factor attorney's fees, prejudgment interest or punitive damages into the actual dollar amount of settlement demands or offers. Parties rarely settle by conceding that they will pay these damages.
   7. When negotiating multi-party cases of some complexity, consider the following strategies:
      1. First resolve the easiest claims or parties to simplify negotiations with the remaining key party.
      2. Negotiate a comprehensive settlement with all concerned parties to cut off litigation expenses.
      3. First settle with the most liable party. The other parties will quickly settle in view of their inability to ride the lead party's coat tails.
      4. In some jurisdictions, good faith settlement laws favor the joint tortfeasor that settles first, and permit that party to settle under value and cut off adverse cross-claims. See McDermott, Inc. v. Amclyde, 114 S.Ct. 1461 (1994).
   8. When faced with a deadlock, meet with your client and re-evaluate the bottom line. Propose voluntary mediation (see Task 78) or arbitration (see Task 77), but make sure you leave the door open for further discussions.
   9. If the other party will not settle, put pressure on him or her by using the court. For example:
      1. Serve an offer of judgment under FRCP 68. See Task 76.
      2. Serve a demand for settlement conference under the relevant local rules.
      3. File a motion for mediation or other ADR procedure permitted by the local rules or EDR Plan. See Tasks 73 and 78.
      4. Petition the court for a Mandatory Settlement Conference with clients in attendance. Ask the court to speak to the clients about settlement.
   10. If you settle, immediately tape record the terms or, if you are in court, have the court reporter record it. Call it a settlement and Compromise Agreement. Put the agreement in writing and have the parties sign it.
   11. Before entering into a settlement agreement, consider and discuss with your client the effects of such things as third party claims, cross claims, offsets, workers' compensation, medical costs, prior attorney's fees, liens, insurance coverage problems, carry-over exposure, unstated claims, contingent claims, state and federal reporting requirement and indemnity agreements.
   12. Remember that in multiple representation situations, all parties must agree to the settlement. In some jurisdictions, a judicial determination that the settlement is in good faith and reasonable in proportion is required.
   13. If you have any doubt that the settlement will be fulfilled, incorporate the settlement into an Order of Dismissal, and condition a dismissal with prejudice on the court's retention or jurisdiction to ensure full performance. Otherwise, the court will lose jurisdiction to enforce the settlement after the case is dismissed. Kokkonen v. Guardian Life Ins., 114 S.Ct. 1673 (1994).
   14. Immediately notify the court of any settlement. Court approval may be required for some settlements, such as those involving minors, incompetents and class actions. In some jurisdiction where tort reform partially abrogates join and several liability, courts must approve settlements with one of several joint tortfeasors if they may reduce claims against others.
       
4. PRACTICE NOTE
   1. Federal courts lose jurisdiction after a lawsuit is resolved. Therefore, remember to move the court to retain jurisdiction to enforce the settlement for a reasonable amount of time. Arata v. New Skin, 96 F.3d 1265 (9th Cir. 1996).
   2. You may stipulate to keep the terms of a settlement agreement confidential. Such stipulations are generally upheld, as long as the party seeking disclosure of the settlement agreement cannot show good cause for the release of the agreement and the information is not available through other sources. Butta-Brinkman v. FCA International, Ltd., 164 F.R.D. 475 (N.D. Ill. 1995).
   3. If a client refuses to settle, despite a recommendation of counsel, attorney on a contingent fee may withdraw, but they should not expect to receive any compensation for work done. Auguston v. Speiser Krause Madole & Mendelsohn, 76 F.3d 658 (5th Cir. 1996).
   4. While it is important to keep clients well advised during negotiations, and it often is necessary to have clients available during court-mandated settlement conferences, it is not always wise to invite clients to participate in negotiations.
      1. If the client is very involved, he or she may be less objective.
      2. Each time a plaintiff hears an amount, he or she may start to spend it. Each time a defendant offers an amount, he or she may reallocate what is left.
      3. Lawyers feel compelled to posture as tough negotiators in front of clients and are reluctant to make necessary concessions.
      4. The client's absence gives the lawyer bargaining room and time to get concessions for
      5. the client.
   5. Don't give up on settlement even after trial. A post-judgement settlement can result in judgment being vacated. National Union Fire Ins. Co. v. Seafirst Corp., 891 F.2d 762 (9th Cir. 1989).
   6. Where appropriate, seek to keep the settlement confidential by obtaining a confidentiality order upon a showing of good cause. Pansy v. Borough of Stroudsber, 23 F.3d 772 (3rd Cr. 1994).
   7. While statements made during settlement discussions are normally deemed inadmissible pursuant to FRE 408, care should be taken when making offers of Judgment along with statements constituting an admission of fact if the Offer is made outside of the settlement negotiation context.

Disclaimer: The issues and recommendations discussed in this Task are based on hypothetical situationsand do not constitute legal advice. My objective is to alert you to some common issues so that you can avoid or minimize legal trouble. Anyone with a law problem should be guided by the advice of his or her lawyer, under applicable federal and state laws, after a full and confidential disclosure of all relevant facts.

Site Map and Navigation Bar

Professional Profile	Home Page	Significant Cases
Aviation Site Reviews The ACE Awards	Initial Consultation	Law Corporation Location
Mr. Kolcyznski's Book: Preparing For Trial In Federal Court Table of Contents Sample Chapter-Negotiations	E-mail The Law Corporation	Aviation Safety Report Form Form & FAQs Tracking Log
Aviation Law Newsletter No. 1 Air Crash Litigation Product Liability Lawsuits FAA License Defense Business Dispute Resolution Damages - Death & Injury Maritime Losses Transportation Accidents Military Mishaps Aviation Law Newsletter No.3 New FAA TicketingProcedure Owners - Personal Liability? Gen. Aviation Manufacturer Immunity? Mediation Of Aviation Lawsuits FOQA - Legal Obstacles To Safety	Aviation Law Newsletter No. II NTSB Accident Reports Design, Manufacture & Warning Defects FAA Investigations Aircraft Maintenance Disputes Contingency Fees Fatal Crashes On The High Seas Aviation Insurance Claims New Aviation Legislation   Favorite Aviation Poems High Flight Low Flight	In Depth Articles Aviation Product Liability NTSB Investigation Guide Post Air Crash Procedures Avoiding FAA Sanctions FAA V. Airmen (10 Tips) Military Air Crash Litigation Aviation Whistleblowers Victims v. Defective Products Expert Witness Tips Ethics & Experts FAA Ticketing Program FOQA- Safety v. Legal Rights Aircraft Owner Liability Liability - Homebuilt Aircraft Accidents Criminal Liability In Aviation Dangerous New Precendent In FAA Enforcement Law International Airline Accident Law Fractional Ownership Liability TSA Aviation Security Enforcement General Aviation Air Crash, Manufacturer Immunity?

This Web Site rated in Top 300 Aviation Web Site

This Web Site was rated by Red Street's As ONE OF THE BEST 100 Legal Web Sites in the USA

Web Site Disclaimer | Top Of Page