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January 01, 2012

Sidebar: How to Settle a Case

All lawyers, even the best, make mistakes. How to best avoid them? Preparation and attention to detail--there’s no substitute.

Kenneth P. Nolan

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A petty discovery dispute deteriorated into a series of nasty, juvenile emails until plaintiff railed at the defense lawyer: “You’ll never try this case. You’re not allowed,” along with something about his mother’s morals. As I devoured this thread with obvious delight, I realized that the threat “I’ll try this case” is as empty as my boast that I’m gonna make this putt.

Used to be that it was easy to try a case, just like it was easy to commit a mortal sin—meat on Friday, miss Mass, covet the girlfriend of the only guy who had one. Now someone has to be wicked unreasonable to find yourself opening to a jury. And only millionaires and billionaires who refuse to pay all their earnings in taxes are going to hell.

A recent trial was a contentious med mal case where the primary target offered a decent amount just before trial. The doctor’s lawyer then promised to sweeten the pot so we’d all go home. A few days later, he advised that his client refused to settle. Having been raised where you never trusted nobody, I figured he wanted to waltz a bit before folding.  While the judge was charging the jury, I realized the attorney was telling the truth. After I won, my adversary simply shrugged: “The guy’s a nut.”


The Decline of Trials

That’s what it takes these days to try a case—a crazy high demand, nonexistent liability, or some gunslinger looking for his 15 minutes. When I first entered a courtroom back in carbon paper days, every case, it seemed, was tried. You waited years in state court for a trial. Wars of attrition where dozens of motions were necessary to compel a deposition, obtain an accident report, medical records. You waited some more for a jury room, jurors, a judge, a stenographer, a court officer until you longed to toss your adversary and his evil client into the toxic Gowanus Canal. Emotion easily trumped reason until a jury declared the victor.

At some point—maybe when multimillion dollar verdicts became ordinary, or when some clever Wharton grad discovered that trials—win or lose—cost money, or when some big shot CEO stopped bragging about how he’d never pay—your phone rang and, after agreeing that the Mets stink, the adjuster added: “Let’s see if we can get rid of this one.”

Now we have an ADR industry, with every retired judge a settlement guru. Before the answer has been served, you’re in mediation with a smiling do-gooder who implores your client to forget that the crash, which killed his mom and stole his youth, was caused by an underpaid, inexperienced pilot who had a history of failed checkrides. “Split the baby in half and get on with your life,” is the mantra preached. I’m sure they mean well.

Maybe the case doesn’t settle before a deposition is taken, but after a year or two of wrestling and a few more sessions in a stale conference room, everyone shakes hands and releases are signed. No erudite opening, no devastating cross, no tear-provoking closing. Not a bad thing, I guess. But just like you have to know how to try a case, you also have to know how (and when) to settle one.

Know the facts. The law too. Very easy to sit there and wing it, especially if you know it ain’t gonna settle—your clients still spit hatred, issues of law have to be decided, further discovery will weaken your adversary. If you fumble facts, aren’t aware of your case’s value, or haven’t heard of a just-issued appellate opinion, your opponent will immediately pounce, explaining why your argument is a piece of, er, garbage. Your credibility will be viewed worse than Bernie Madoff’s, and the mediator will silently wish you food poisoning. A year later, when you’re desperate for an additional ten grand, the mediator will remember this pitiful performance and announce loudly: “Can’t get it. I really can’t.”

Nothing better than to refute every thrust with facts, law, and understated reasoning. If the mediation is early, a professional presentation will broadcast that you have skill and dedication to be feared. If it’s a last ditch effort a week before trial, it will demonstrate that you’re ready and willing to do battle.

When law reports were published on paper, I would grab the just-delivered compendium, and, like the nerd I was, sit on the grimy subway reading nearly every opinion so that I could learn the law that they somehow forgot to teach in law school. Now I can barely get through headnotes. Yet no matter how enticing your voice, convincing your theatrics, if you can’t answer a question of law, you’re exposed as a fraud. Perhaps your dynamic presence and sparkling Patek Philippe will fool your clients, but not your adversary, those who know, those who write the checks. 

Educate the mediator. Even if it’s a simple hit-in-the-rear before an amiable judge with decades on the bench, provide a narrative, photos, police reports, and excerpts from medical records. Create an attractive booklet and serve it well before the settlement conference. If it’s complicated, use the wonder of video or PowerPoint to explain, teach technical terms, how the brakes were designed, how the drug saves lives.

Don’t assume the mediator is knowledgeable. Provide basic information in a form that is appealing and easily absorbed. “Tell it to Sweeney,” was the New York Daily News motto about how a story should be written—for the average blue collar worker. You don’t have to write to a sixth-grade level, but realize that most will not have the inclination to read a 40-page brief. Keep it succinct and clear with lengthy legal arguments and opinions attached as exhibits should the mediator become bored watching Jersey Shore.

Bring experts. If the valuation of stock options, or how you arrived at $42 million in future lost wages is contested, have your economist validate his calculations. His presence and erudition announces that you’re serious and confident. 

Tell your clients the truth. Easy to paint a picture of joy and optimism on a day of soft wind and soothing sky. The law, the facts, the venue, you proclaim, are as welcoming as the dazzling sun. Yet, in the real world, nor’easters come-a-calling with rain, wind, and destruction. I won’t even mention the economy.

Hard, just really hard, to be honest and admit it’s not a slam dunk; the other side’s lawyers are darn good; the law is, well, iffy; and the jurors—have you seen the rabble who decide these complex issues? By the way, did you have to post those photos on Facebook? You know the ones.

Most clients need to be slowly educated since anger and revenge initially drive litigation. Send them deposition transcripts, the judge’s decisions, jury instructions. Drag them to court and catch a trial so they can view jurors silently staring at peeling paint. Have them deposed so they realize that questions—about bankruptcy, marriage counselors, disgruntled employees, the sexist emails that were once thought hilarious—will be asked. A lawsuit, no matter how meritorious, is no stroll along the Seine.

Tell them what they don’t want to hear. At the appropriate time, of course. Sure the general counsel will frown and perhaps threaten to send her business across the street, but an unexpected humungous verdict will certainly ruin her lobster risotto. And your chance at partner.

When to Settle

Certain times lend themselves to resolution. Before a complaint is filed, while a critical motion is pending, at the end of discovery, during jury selection, after an appellate argument—just before an event that alters the odds from 50/50 to 80/20. Uncertainty breeds settlement. Why settle after the motion to dismiss punitive damages is denied? Now’s the time to tighten the screws and watch the SOB squirm.

Don’t play the usual ego game. “The adjuster has to call me first. . . I’ll never offer a nickel until plaintiff lowers her demand. . . It’s time someone taught that arrogant jerk and his phony Texas twang a lesson.” This posturing qualifies you to be a senator, but is counterproductive.

If you want to initiate negotiations, pick up your iPhone. It’s not weakness to ask “You interested in resolving this one?” If the answer is “Never, not today, not ever. You want money, get it from the Tooth Fairy,” you can prepare for trial without distraction. 

Listen. I never refuse to negotiate, to mediate. Every offer, no matter how minuscule, provides insight. The more you learn of your adversary’s analysis, the better to adapt your strategy. Knowledge allows your client to decide intelligently whether further negotiation makes sense.

Nothing worse than the jury tossing your butt onto Court Street and having your adversary mutter “How come you didn’t want to settle? I had decent money, you know.” 

Try your case. Not all cases settle. Litigate as if it will be tried. And when you can’t resolve your differences, try it. You may even win.


Kenneth P. Nolan

The author, a senior editor of Litigation, is with Speiser, Krause, Nolan & Granito, New York City.