Neutral Evaluation – An Effective ADR Process

Neutral Evaluation, sometimes called “Early Neutral Evaluation,” (“ENE”), is a process where a neutral third party hears presentations by disputants of their positions, then provides them with his or her evaluation of the case. Pioneered by Magistrate Judge, Wayne Brazil, (Ret.) formerly of the Northern District of California, it is also encouraged by some state courts and is being increasingly recommended by attorneys on a voluntary basis.

Often used in cases in which there are complicated, or mixed fact/law questions, difficult evidentiary issues or hard-to-prove damages, it works best when parties and counsel acknowledge these concerns before they spend inordinate time and money on extensive discovery, although it is not uncommon for some initial discovery to be undertaken to flush out “core” issues and documents.

The process typically begins with the selection of a “neutral evaluator,” preferably someone who enjoys a high level of trust and regard by the attorneys, has some subject-matter expertise, is able to quickly grasp the issues and is skilled enough to talk openly and candidly without burning bridges. The attorneys and the clients likewise need to be invested in the process, be non-confrontational and willing to actively listen to the evaluator’s opinions and hopefully, to be guided by them.

Following selection of the evaluator and a pre-session conference call, the parties submit written statements, much like arbitration briefs, although they may be in the form of offers of proof. Included are relevant documents and reference to critical deposition testimony, if discovery has progressed that far, or witness declarations under oath.

The evaluator’s review of the submitted material is generally followed by a face-to-face joint session with parties and attorneys. Here the attorneys present a summary of their clients’ cases, and in a Socratic back-and-forth dialogue, the evaluator asks questions designed to elicit information and clarify issues. Some evaluators may “signal” their thoughts without offering any concrete opinions, but attorneys and clients who are listening carefully, will usually be able to pick up on what the evaluator considers to be strong and weak points in each others’ cases purely through the dialogue. There are no private caucuses, as in traditional mediation.

In most situations, the evaluator will prepare a written evaluation, either in narrative or “bullet-point” form. This may include his or her opinion of the parties’ respective positions and may include a “settlement range,” if not an actual figure. Before presenting it, however, many evaluators, including this writer, will ask the parties and attorneys if they believe it would be beneficial to have the evaluator change roles and work with them in a more “mediative” capacity in an attempt to resolve the case. If this is declined, the evaluator will present his or her written evaluation. If, however, the role-change is accepted, the evaluator may never deliver the written evaluation unless settlement negotiations fail.

Although not suitable in all cases, there are obvious benefits to Neutral Evaluation. The process provides a speedy, private and non-adversarial opportunity for reality checking without the pressure of having to settle then and there. The evaluator provides the parties with insight into which arguments are likely to gain traction at trial and which likely to fail. It is thus particularly useful when lawyers’ clients are corporate executives, adjusters or risk managers who may need to report to other stakeholders before final decisions are made.

                       

Malcolm Sher, Esq

Malcolm Sher, based in the San Francisco Bay Area, is a full time mediator who has resolved hundreds of real property, business, partnership, trust/estate, professional liability and employment cases, many of which involve significant emotional issues. In the majority of his cases, the disputants are from diverse cultural and ethnic… MORE >