1 PerspectiveOctober 7, 2008

Non-Binding Arbitration: Get Your Day in Court Without One Day in Court

Have you ever had a dispute over an amount that was too small to litigate but too big to leave behind?  These are some of the most difficult issues to resolve; they can strain the attorney-client relationship and, occasionally, they test the bounds of common sense.  Before you file that lawsuit, consider whether non-binding arbitration can help you avoid the irrational.

Although I didn’t know what it was called at the time, non-binding arbitration came in especially handy for me in a dispute my client had with an insurer a few years ago.  The matter was the last, minor claim on a long list the two had fought out, and who was really “right” in this case isn’t really relevant at this point.  The more important facts were:  (i)  the amount in dispute wouldn’t support a full-blown lawsuit; and (ii) despite the modest quantum, a lawsuit remained likely given the egos involved and the broader relationship between the parties.

Stumbling into Non-Binding Arbitration

I searched for a way to get a judgment on a smallish case with complicated facts, and it couldn’t be done here. More…

Categories: ADR,Arbitration,Negotiation,Settlement,Tactics

6 PerspectivesSeptember 30, 2008

Rule 68 and Offers of Judgment, Part III: 9 Situations Where They Just Might Work

Following my posts about how Rule 68 works in Part I of this series and why it works in Part II, I had spirited discussions with a few of you about when offers of judgment can be most effectively used.  This post will highlight 9 situations where Rule 68 offers are more likely than most to be successful.  As always, this is a nonexhaustive list based on my own experience; I welcome additional situations you’ve witnessed.

Nine cases and situations where I believe Rule 68 offers are the most likely to be successful include:

(i) Hindsight Avoiders. I have litigated against several trustees, and they know their judgment will someday be second-guessed — with 20/20 hindsight — if they lose at trial.  Trustees and other fiduciary representatives are a bit different than individual plaintiffs who can “bet it all” on a bad case; like it or not, trustees may someday have to answer the question:  “The Rule 68 offer was unconditional; how could you have left it on the table?”  Or:  “How could you not have understood how bad our case was when you had an offer of judgment in front of you?”  Go ahead and use Rule 68 to make it hard for them to walk away.

(ii) The Bird in the Hand. Cases with natural breaks in damages are ripe for Rule 68 offers.  Cases with contractual damage caps and cases where a back More…

Categories: Mediation,Rule 68,Settlement,Strategy,Tactics

3 PerspectivesSeptember 26, 2008

Rule 68 and Offers of Judgment Part II: Why They Work and How to Use Them

While I wrote previously about how Rule 68 works in Rule 68 and Offers of Judgment Part I:  How They Work and Why You Should Care, most people haven’t considered why it works.  This post outlines some of the reasons why offers of judgment, under Rule 68 or otherwise, can be so effective in getting cases settled.

As outlined in Part I, Rule 68 imposes a penalty on a plaintiff who refuses a reasonable settlement offer and doesn’t beat that offer at trial.  At risk are court costs which, admittedly, don’t create a significant financial exposure.  Big numbers or not, the Rule can still be effective if used under the right circumstances.

Why Does Rule 68 Work?

Rule 68 works because lawyers have to communicate settlement offers to their clients, and a Rule 68 offer of judgment is a settlement offer that creates a downside risk for the plaintiff. More…

Categories: Rule 68,Settlement,Strategy,Theory

3 PerspectivesSeptember 23, 2008

Rule 68 and Offers of Judgment, Part I: How They Work and Why You Should Care

I once had a client tell me:  “I’m in the outsourcing business, not the litigation business.”  He would probably read the title to this post and say something like:  “I’m a client.  Why do I care about rule anything?”  Whether you are a client or a lawyer involved in US litigation, Rule 68 and similar state rules are important to you for two reasons:  they can get cases resolved when nothing else can, and few lawyers use them effectively.

Rule 68:  Formalizing the Settlement Offer Process

While the text of Federal Rule of Civil Procedure 68 is a bit dry, it’s not that difficult in practice.  In short, Rule 68 imposes a penalty on a plaintiff who refuses a reasonable settlement offer.  To avail himself of Rule 68′s benefits, a defendant has to offer the other side a judgment in writing – a settlement offer that, if accepted More…

Categories: Rule 68,Settlement,Tactics