Early Neutral Evaluation: What It Is and Why You Should Use It.

Trial attorneys know that Rule of Civil Procedure 16B requires virtually all cases in Superior Court to undergo alternative dispute resolution. ADR occurs somewhere between 60 to 180 days after the filing of the court’s Scheduling Order. The cases which do not settle at ADR are frequently subject to Judicial Settlement Conferences on the eve of trial. This last gasp procedure to avoid a jury decision takes place after all parties have expended enormous time, energy, and resources.

The ADR process of Early Neutral Evaluation (ENE) has been in our Civil Rules for years. It is one of the three models of ADR recognized by Rule 16B(d)(1). Unfortunately it is a model which most attorneys do not recognize or understand, even though. ENE might be their most helpful alternative, particularly in difficult cases. ENE relies on the expertise of a neutral to assess the strengths and weakness of the case. It presents the parties with a range of trial outcomes based on the neutral’s personal experience as a trial attorney.  This kind of “reality check” differs from mediation in that the ENE neutral can create for the parties a written, step-by-step assessment, instead of a more generalized sense of where the case might go in trial.

The process is straightforward and can be designed to meet the parties’ particular needs. The starting point is typically the submission of a written statement by the parties. This usually requires more effort and time than the typical mediation memorandum. The purpose of the statement is to provide a detailed review of the nature, direction, and substance of the case. It will typically describe the details of the case, set forth all liability and damage issues, and preview all expected evidentiary and legal disputes.The idea is to create an opportunity for the attorneys, early in the litigation, to review their evidence and legal theories and to assess frankly their side’s strengths and weaknesses.  These statements may cause the parties to request more information from each other or to request clarifications of positions before proceeding to the next phase,

The written statements are followed by aface-to-face meeting with the neutral who probes each side’s cases, sometimes in private caucuses, so that a fair and complete evaluation can result. This process is not subject to the rules of evidence, but allows the parties to make arguments and to focus on key pieces of evidence. It differs from mediation in that the ENE neutral affirmatively and actively seeks out information which his personal experience indicates is important to valuing a case.

The parties determine what happens at the conclusion of this part of the session. At this, and at subsequent stages, there is a chance that receiving a written evaluation will harden some or both parties’ positions. Competent attorneys weigh this risk and determine whether they are better off not knowing what the neutral thinks and, instead, continue to keep matters in their own hands. The attorneys may agree that they have learned enough about each other’s case that they do not want a written evaluation by the neutral. Alternatively, they have the option to have the neutral take on the role of a mediator to attempt to settle the case. If the case does not settle, they still have the option to request written evaluation.

If the parties do not settle, the neutral prepares a written report which provides an estimate, where feasible, of the likelihood of liability and the dollar range of damages, an assessment of the relative strengths and weaknesses of each party's case, and the reasoning that supports these assessments.The analysis is based on the state of the case at that time. In cases in which there are significant legal issues, or where summary judgment is a realistic possibility, the neutral may be asked to address the likely outcomes of such issues. This report is written on a schedule agreed to by the parties. For example, the American Arbitration Association requires the report to be completed within 14 days, Once completed, the report is not immediately issued. The parties have the option of receiving the report, or of putting off the report, so that they can engage in further negotiations. They may also choose to submit additional information to the neutral, or to conduct focused discovery. This option provides the parties with an opportunity like asking a jury which has decided a case to wait in the jury room so that the parties can try to resolve the case without knowing their verdict. Again, the neutral can be utilized to try to bridge the gap and arrive at a negotiated settlement.

Once the report is released, the parties should of course continue to talk. The report will likely disclose holes in one or both sides’ cases which further research or discovery may fill.  Obviously there are some cases which time or effort cannot improve and the ENE process may be helpful in persuading a recalcitrant client in moving from a previously fixed position. The major advantage of ENE in a case which does not settle is that it frequently saves time and money by narrowing issues, and by avoiding costly formal discovery and pretrial motions. It can also help to guide the parties to conduct focused discovery in order to set the case up for later resolution. 

The confidentiality of the ENE process is identical to that of the more traditional mediation. It is governed by Rule 16B as well as any confidentiality terms included in the neutral’s evaluation agreement. Fees, like in mediation, are typically shared equally by the parties.

For the more complex cases with significant legal or factual disputes, ENE may well be a trial lawyer’s best ADR alternative.