By Dr. Ken Broda Bahm:
Those of us who work in trial preparation and case assessment are in a remarkable new reality as trials across the country are on indefinite hold. Unlike some past natural disasters and economic disruptions, the one is not regional or confined to specific industries, but is instead worldwide and includes the entire economy. In the very favorable scenarios that predict things opening up in a month or two, the court dockets will still be left with an enormous backlog. In other words, the trial world’s uncertainty will persist, and for how long, we don’t know.
Could this result in a change in the ways cases are resolved? A recent article by Daniel Siegal in Law 360 says “Yes.” The article, entitled, “By Halting Trials, Coronavirus May Push Parties to the Table,” suggests that both plaintiffs and defendants may be looking to exert some control over frozen litigation, and could be seeing an earlier settlement as the best way to do that. I believe that even in normal times, what drives the parties’ settlement thinking is the goal of uncertainty reduction. The act of settling is the act of moving from the unknown to the known. At any time, that is going to be comforting. But in the present context, when most of us literally don’t know when we’ll get to leave the house again, at least that one step toward certainty can be attractive. In this post, I will take a look at some of the observations in Mr. Siegal’s article, share some thoughts on the effect of the current crisis on settlements, and recommend a few best practices in settling under any circumstances.
The Plaintiff’s Pull: Reduce Uncertainty by Taking the Bird in the Hand
When the trial dates are suddenly yanked, and the litigation process is put on hold, that puts plaintiff attorneys in a precarious position. The Law 360 article quotes Gregory Katz, managing partner of Lewis Brisbois Bisgaard & Smith managing partner Gregory Katz, who notes that plaintiffs’ attorneys, “work on contingency, so how else do they make money besides settling cases?” The fact that they won’t be getting any judgments in court anytime soon has to factor into their bottom line. Their clients, who have likely been waiting for their day in court, might also balk at the prospect of having to wait even longer. In that context, working with an offer that is already on the table, the bird in the hand, becomes a lot more attractive.
The Defense’s Pull: Reduce Uncertainty by Getting Back to Business
Company defendants, on the other hand, may be reluctant to increase the money on the table. Given the uncertainty most businesses will face on future revenue, the option of simply freezing the case in place for the time being might be appealing, but for defendants, there may also be a contrary pull toward getting past the litigation and its attendant uncertainty. The Law 360 article quotes McGuire Woods partner, Greg Evans, noting that in the context of the pandemic and the economic decline, “This should motivate parties to focus on that which is most important: getting back on our feet, getting business running again, and clearing litigation out of the way.”
The other possibility is that the coronavirus epidemic promotes a perspective shift in which other things start to become more important. Greg Evans continued, “I think there’s a silver lining in that this public health crisis will cause people, advocates and their clients to consider resolving disputes rather than to perpetuate them, not just because the resources may not be available, but because we can all appreciate things that are much bigger than business disputes.”
The Advice: As Always, Settle When It Makes Sense, but Not Because You’re Scared
With or without a virus, settling your case is always one option. But it is an option that should be chosen rationally. It may feel wrong to be playing chicken on a legal issue in the midst of this pandemic, but your settlement decisions should still be based on the same factors of a clear-eyed case assessment.
Don’t Be the Only One to Panic
This may be a long ride, and even when it is over, it may have some lasting effects. But it will be over at some point. The constraints of the current economic and medical context affect both sides, so you don’t want to be the one side that suddenly abandons your own carefully prepared case assessment if nothing about the case has substantively changed.
Think About the Jurors-Eye-View
Part of your revised assessment should include the question of whether a juror’s view of the case has changed in any way. For example, if it is a case against a doctor, account for the fact that the public’s respect for doctors and other first responders is likely at a peak. If it is a case about employment, account for the fact that there’s likely to be greater sympathy, as well as personal experience, involving those who have been laid off.
Don’t Forget the Foundation
Even when cases never get to trial, the right foundation for case evaluation is the question of what a typical jury would do with your case. You don’t have a crystal ball, but you do have the ability to carefully develop an informed litigation risk assessment based on your analysis, experience, and research. Feedback from your mock jurors — in person or, these days, online — can help to inform that foundation.
In some ways, in evaluating your case, it helps to think about your time and resources like an investor would. And, one piece of investment advice I have taken to heart is this: Rather than making investment decisions during a crisis, it is often better to just ride it out.
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Other Posts on Settlement:
- Resist the Judge’s Nudges: Sometimes Trial Is Better Than Settlement
- In Settlement, Account for the Sobering-Up Effect
- Break Through the Barriers: The Settlement Series, Part One
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