What is a Mandatory Settlement Conference?

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What is a Mandatory Settlement Conference?
What is a Mandatory Settlement Conference?

Mandatory settlement conferences (MSC) are a regular part of the course of a lawsuit in California. Mandatory settlement conferences are ordered and set by the court and can be set at the request of either party or the court. The conference usually takes place shortly before trial and operates as an opportunity for the parties to come together to try and resolve the dispute without a trial. But for people not familiar with the court process, hearing that they have a mandatory settlement conference set on the calendar may seem intimidating. This article will outline the process in California, discussing the rules establishing the practice and different aspects of the process. By the end of this article, people and parties should feel confident in knowing what to expect and how to take advantage of a settlement conference.

California Rule Establishing Mandatory Settlement Conferences:

The practice of mandatory settlement conferences is most common in California. The California Rule of Court 3.1380 outlines mandatory settlement conferences, providing the grounds and procedures for the conferences. There are several important provisions of the rule to determine the procedure, including:

  • Calendaring: The rule allows the court on its own motion or at the request of either party to set one or more mandatory settlement conferences.
  • Required Persons: The rule requires any attorneys, parties, and persons with authority to settle to attend the conference unless excused by good cause. The rule also requires that anyone that must give permission to settle for any reason must be present in person at the conference.
  • Statement: The rule requires that the parties submit a statement to the court not later than five days before the initial date set for the conference. The requirements for this statement will be discussed later in this article.
  • Restrictions: The rule does not allow the court to appoint a mediator already serving in the action as the one to conduct the conference or to conduct mediation under this rule.

This establishes the very basic outline for a mandatory settlement conference. Knowing these rules will help a party know what is required and disallowed for the conference and begin to prepare for the conference.

Further Defining a Mandatory Settlement Conference:

While the rules provide some basic dos and don’ts for a mandatory settlement conference, there are more aspects of the process that need to be understood to be best prepared. These considerations include:

  • Timing: Timing can depend on the county where the litigation is taking place and when in the process the parties or court decision that a mandatory settlement conference is needed. However, it will likely be close to the trial. Some counties will set a mandatory settlement conference the same day that they set a trial date.
  • Location: Location will depend on the county, but many counties hold the mandatory settlement conferences at the courthouse or buildings around the courthouse.
  • Dispute Content: Mandatory settlement conferences are available for most civil disputes. These conferences are very common in family law and workers’ compensation but can be very useful for all other types of disputes.
  • Leader: The mandatory settlement conference is usually lead by a temporary judge or a sitting judge. In Los Angeles County, the mandatory settlement conference program has six current judges who help the parties reach an agreement. In Santa Clara County, temporary judges hold settlement conferences. These temporary judges are usually lawyers with a lot of experience.
  • Cost: Because these are conferences mandated by the court, they are either low or no-cost programs to provide alternative dispute solutions.

Important Distinction:

It is important to note that mandatory settlement conferences are not mediation. These have occasionally blurred in cases in the past, and the California Rules of the Court Advisory Committee Comment is quick to make this distinction. The courts encourage the parties to use mediation to settle cases as the trial process continues, but many people may not have the ability to pay for such services, so this provides a low-cost way to settle disputes creatively and effectively. However, many parties also participate in mediation during the trial preparation but are unable to resolve their disputes, so the settlement conference provides another chance for the parties to settle the dispute without a trial.

The most important reason for the distinction between mediation and a mandatory settlement conference is the confidentiality element of mediation. Mandatory settlement conferences (MSC) do not have the confidentiality requirement that mediations do, so the record of the conference and the settlement will be public record.

Mandatory Settlement Conference Statements:

As mentioned above, the parties participating in a mandatory settlement conference will need to submit a statement to the court. While the rules require this statement to be submitted at least five days before the conference, counties often extend this up to ten days before the conference so that the conference leader will have the opportunity to review the options and be prepared to make other suggestions. The California Rules of Court require that the statement includes:

  • Demand: The statement must include a good faith settlement demand. This helps the judge set the parameters of the argument and understand where the parties are starting. It also helps the judge identify what is important to the parties.
  • Itemization: The statement must include an itemization of economic and non-economic damages by each plaintiff. This will help the judge understand where the settlement demands are coming from and what the plaintiffs are seeking at trial.
  • Offer: The defendants must submit an offer of settlement. This helps the judge understand how much the defendant believes they will be able to give and what they believe they are liable for. It gives the judge a number to start with.
  • Facts and Law: The parties must provide a statement with the pertinent facts and law on the issues of liability and damages involved in the case as seen by that party. This will further help the judge determine where the parties are basing their ideas and suggestions and how the case may go if it proceeds to trial.

Local rules may impose other rules on the statements, but every mandatory settlement conference statement must include at least these four things.

The Hearing Stage:

Once the day comes for the mandatory settlement conference, the parties will have a hearing. As mentioned above, this usually takes place at the courthouse and is presided over by a temporary judge or judge, sometimes even the same judge presiding over the case. These conferences are usually shorter than a mediation, so they result in a favorable settlement less often than mediation will. However, if the parties are close to an agreement, then it may be possible to reach an agreement at the conference.

The parties and their lawyers and agents will meet with the judge to try and see if the case can be settled without trial. Each judge will have their own way to run a conference and it will be dependent on the subject matter of the dispute, but most judges will at least discuss the following topics:

  • Facts: The parties will need to discuss the facts as each of the parties see them.
  • Facts at Issue: The judge will often guide the parties through the facts to see if there are any facts that the parties cannot agree on.
  • Needs: The parties will discuss what they will need to settle.
  • Wants: The parties will also discuss what they may want to settle.
  • Solutions: The judge and the parties will try and come up with solutions based on the facts and law provided that will be agreeable to both parties.

A mandatory settlement conference is not a binding process. The hearing will consist of the judge making suggestions based on how they see the case proceeding and what the parties need to be able to settle. If the parties are unable to reach an agreement, the case will proceed with a trial. The hearing will just provide an opportunity for the parties to have control over the outcome of the case.

Types of Cases Commonly Using Mandatory Settlement Conferences:

Family law and workers’ compensation cases are often referred to as mandatory settlement conferences. Workers’ compensation conferences are usually held in front of the Workers’ Compensation Appeals Board, which will provide an opportunity to present the case to the representatives of the insurance carrier or employer. Family law cases are often given mandatory settlement conferences because it provides the parties a chance to discuss the details of the disputes involving property division, child custody, and support. While these cases are the most common, almost any type of civil suit could be recommended to a settlement conference.

Conclusion:

While they may sound intimidating, mandatory settlement conferences are an opportunity to see if the parties can reach an agreement before trial. As long as the parties and their attorneys are prepared with the law, facts, and itemizations to back up their demand or offer, the process will likely go smoothly. The judge will be able to suggest options for the parties and provide feedback on what the parties have put forward. And if there is no agreement, the parties will still be able to have their case heard in a court. It provides the parties with the opportunity to control the outcome of their case and move forward without trial. Settling a case before trial will benefit the parties and help alleviate the court system.

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Emily Holland
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