Early Neutral Evaluation: Encouraging Settlement and Understanding

Occasionally, a court will recommend an early neutral evaluation shortly after a case has been filed.  Courts will usually recommend this when they believe an evaluation may help the parties accurately see their positions compared to the other party’s and potentially think about a settlement.   Sometimes, a court will recommend the case to early neutral evaluation because they believe the parties will benefit from having the issues and facts of their case explained and evaluated.  The parties can also choose to participate in early neutral evaluation on their own.  However, a case finds its way to early neutral evaluation, the process can provide insight, understanding, and a renewed appreciation for the case.  Participating fully in the process by knowing what to expect when a case is recommended will help the parties to leave the evaluation ready to either settle their case or understanding what is needed to move their case forward.

What is Early Neutral Case Evaluation?

Early neutral case evaluation is a process where a neutral party not involved in the case looks over the case shortly after it is filed and evaluates it.  The neutral is usually an attorney that understands the subject matter and can make an unbiased evaluation of the case for the parties, balancing their interests and the interests of the court to settle cases and clear up backlogged cases. This may happen in a meeting with the parties where the parties discuss the case with the neutral, or the neutral may review written comments by the parties on the issues and desires in the case.  After reviewing the case, the attorney will provide an evaluation of the strengths each side has, while also highlighting and discussing the weakness the case has.

Common characteristics of the neutral evaluation include:

  • Confidential: The evaluation of the case between the neutral and the parties will be confidential.  The neutral will not share the discussions that take place within the evaluation with the judge or anyone else apart from the parties.
  • Neutral: The process will be neutral. The evaluator, or neutral, will approach the parties’ dispute without bias. Neither party should have sway over the neutral, and the neutral should not take sides, but merely present the strengths and weaknesses of each case.
  • Discussion: The parties and the neutral will usually meet to discuss the case or meet to discuss the evaluation of the case.  This discussion will usually include the neutral sharing their thoughts on the merits of the case and the parties further discussing their case and possibly discussing settlement if that is an option.
  • Non-Binding: The evaluator is not allowed to decide the case or force the parties to agree or follow the evaluator’s decision.  The process exists only to provide the parties with a chance to hear about the potential outcome of their case, reevaluate their positions, or discuss a settlement.
  • Collaborative: Once the neutral provide their evaluation of the case, the parties can collaborate and decide whether a settlement may be acceptable.  The parties may be more willing to work together after they have a better grasp on their case.

What is the Purpose of Early Neutral Case Evaluation?

The purpose and reasoning behind why judges or parties send a case to evaluation differ with the case and the parties.  However, there are a few common reasons to send a case to evaluation, including:

  • They think the case could settle.  Courts and the legal system are often incredibly overwhelmed by the number of cases that need to be tried at any given time.  This is why many judges will encourage settlement. If a case is filed and a judge sees the potential for settlement early, they may recommend it to early neutral evaluation to encourage the parties to move towards a settlement.
  • The parties need an unbiased and accurate opinion of the case.  Parties to a legal dispute often see their case in a very optimistic way.  This is incredibly normal and often necessary for parties to recover what they are entitled to.  However, the optimism can occasionally drive the parties to have unrealistic expectations for the case, and it may stop any fruitful conversation or accurate work on the case. The evaluator may be able to reign in the parties’ expectations and paint an accurate picture of what the attainable results of the trial may be.  This could then lead to settlement discussions or a trial with fewer disputes than originally stated.
  • The parties contracted for it.  Contracting parties may agree to submit any disputes that arise to a neutral before a case is filed.  This clause can be included in a contract and be enforced when there is a contractual dispute.  This requires that the parties submit a good faith and accurate representation to the neutral so that the neutral has the most accurate picture of the dispute before they present their evaluation.
  • The parties agree to submit it post-dispute. Parties may also agree to submit the case to early neutral evaluation after a dispute arises.  All parties must agree to submit their dispute to the evaluator, meaning that it cannot be forced unilaterally. Again, the parties must present a good-faith representation of their case so the neutral can make an accurate evaluation.

What are the Advantages of Early Neutral Evaluation?

There are several important advantages of early neutral evaluation.  These include:

  • Expertise: The neutral can be appointed or chosen based on their knowledge about the subject matter of the dispute.  This can both ensure the parties that the evaluator is knowledgeable about the process and the outcome and help the parties understand the critical issues in the dispute.
  • Focus: There are often many aspects of a case that can distract the parties from the most important aspects of the case, including emotions that may drive the parties to focus on smaller points of lesser importance.  An evaluation can help the parties focus on the most important aspects of their case. This can provide new insights and a clearer path to success on the case.
  • Confidential: Because the entire process is confidential, it allows the parties to speak freely knowing that nothing will be shared publicly or in court.  It can help agreements or disputes stay private as well, protecting the interests of the parties.
  • Neutral: The opinion of the neutral evaluator can help the parties feel that their case has real value, and it also helps them understand where the value lies in the other party’s case.
  • Voluntary: Because the parties are choosing to participate in the evaluation and choosing to settle or continue in the case after, the parties are often more forthcoming in the process and can see value in the chance to learn more about their case.
  • Chance to Settle Early: Early neutral evaluation gives the parties a chance to come together, hear the strengths and weaknesses of their case and the other case, and have the opportunity to discuss settlement before the parties spend too much money on attorneys and court fees.

What are the Disadvantages of Early Neutral Evaluation?

There are also disadvantages to early neutral evaluation that can impact the accessibility or necessity of the process and must be considered.  These include:

  • Cost: Because the process is voluntary, there is no guarantee that the case will be resolved after the evaluation, and the evaluation may add costs.
  • Stress: When the process does not provide a settlement or clarification for the parties, it can feel like wasted time and stress for something that was not fruitful.
  • Refusal: Sometimes, a party will hear that their case is not strong but still refuse to settle the case.  This can drag out the process of resolving the case and keep the parties in a state of limbo where they know what will likely happen but cannot act on it.

What Kinds of Cases are Suited for Early Neutral Evaluation?

While most civil cases would benefit from some form of neutral evaluation, certain cases may be particularly successful after undergoing an early neutral evaluation:

  • Child Custody: Parties that are seeking to establish or modify child custody orders may benefit from early neutral evaluation because this process often benefits from an unbiased evaluation of the positions.  The parties are often strongly fueled by emotion, and a neutral’s opinion can help provide an accurate portrayal of the case.
  • Divorce: Similar to child custody cases, early neutral evaluation can often help the parties see an accurate picture of what the court would award and may help them to protect their interests.
  • Contracts: Contracts can include an agreement to submit a dispute to early neutral evaluation, as mentioned above.  Contract cases often have a step-by-step evaluation of the case, so having a neutral evaluate the case early on can save time for the case and provide clarity about the strength of the claim.

Conclusion:

Early neutral evaluation gives the parties a chance to come together early on in the case and listen to the strengths and weaknesses of each case.  The neutral evaluator will assess the positions of the parties and provide the parties with a picture of what the case might look like as it moves through the court system.  It also gives the parties a chance to see what areas need to be settled and what areas are of critical importance.  An evaluation provides a starting point for settlement and gives the parties a chance to evaluate what a possible settlement might look like.  It can serve as a valuable tool and is an important aspect of alternative dispute resolution that serves both the clients and the court system as a whole.

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