Introduction

In the paradoxical realm of complex civil litigation, conventional wisdom holds that trial counsel should defer settlement negotiations until he or she has secured a position of advantage over his or her adversary. For purposes of this article, I've dubbed this rule of thumb the advantage paradigm. While understandable (who wouldn't prefer to negotiate from a position of strength?), the paradigm, like everything, has its good and bad points. The purpose of this article is to examine these points, consider how well the paradigm serves the needs of modern-day participants in the legal process, and suggest an alternative approach that mitigates some of its worst excesses, at least insofar as the timing of settlement negotiations is concerned. For ease of reference, I've blushingly styled this alternative approach the fairness paradigm. In candor, the approach already enjoys wide usage, and while it hardly guarantees the fairness implied in its name, it nevertheless deserves attention if for no other reason than that it is a potent complement to the advantage paradigm and offers an effective point of departure for getting settlement negotiations back on track.

The Advantage Paradigm

While most cases are litigated and resolved efficiently, many resist even the best efforts of counsel to bring them to the negotiating table. When lawyers on all sides of a dispute consistently fail in their attempts to initiate settlement negotiations, it is often due to the influence of the advantage paradigm.

As seasoned trial counsel are aware, a dual problem is created by the advantage paradigm. First, since advantage has a zero-sum quality of exclusivity about it (i.e. when I have the advantage, you don't, and so forth) it persistently keeps parties out of sync with one another in terms of their inclination to negotiate. Second, since advantage is not static, but changes and shifts back and forth (i.e. as depositions are taken, motions are won and lost, and as evidence -favorable and unfavorable - is gathered) the relative inclination of the parties to negotiate alternates from one side to the other. As a result, settlement initiatives tend to be rejected first by one side, then the other until or unless one side relents. Oftentimes, the outcome of this dynamic is that settlement opportunities remain unfulfilled until a trial court orders everyone to mediation or settlement conference, customarily near the end of the case, ancillary to other pre-trial procedures and risk-hedging pragmatics.

For a certain class of cases which require a fully developed evidentiary record there's no doubt that this is an acceptable and even necessary outcome. For any number of reasons, such cases require that trial counsel first have witnesses committed to sworn deposition statements and authenticated documentary evidence in order to provide responsible settlement recommendations to the client. For such cases the advantage paradigm creates no special problems nor exacts heavy burdens.

For many other types of cases, however, the need for such a well-developed evidentiary record is less, and, other issues aside, the case may be ripe for serious settlement negotiations earlier in the litigation process. In these cases, the advantage paradigm can delay settlement negotiations. For these cases, the fairness paradigm can offer a different viewpoint that enables even bitterly adverse parties to agree to negotiate with one another.

The Fairness Paradigm

The fairness paradigm substitutes a different criterion for deciding when to start settlement negotiations. Instead of linking the timing of negotiations to a party's perception of its relative advantage over its adversary, the fairness paradigm holds that negotiations should start when each side can affirmatively answer the following two questions. (1) Am I willing to come to the negotiating table if the other side is willing? (2) Am I willing to resolve the dispute based on settlement terms that fairly reflect the duties and responsibilities of each side? From a timing standpoint, when both questions are answered in the affirmative by all parties, the case should be seriously considered for some form of either direct or mediated negotiation process.

Naturally, it would be naïve to expect that parties will find it easy to agree upon the exact terms of a fair agreement simply because they've pledged to be bound by such. Each side will continue to maintain its own view of what is fair, and will submit that view to negotiation. Nevertheless, and this is the point, the fairness paradigm is useful because it shifts the parties' focus back a full 180 degrees: from concern over who's winning, to concern over fairly resolving their interests and claims, insofar as is possible. It provides a fresh point of departure. By refocusing parties on their common interest in achieving a fair resolution, productive negotiations are often possible at times and in circumstances that a more strategic focus would not grant.

Naturally, both paradigms have a legitimate role to play and serve best when they influence diplomatic initiatives in balance with one another. The advantage paradigm serves well because it rests on the trial lawyer's pragmatic experience that nothing happens except by necessity, and that often an advantage of some kind is necessary to persuade (coerce?) acceptance of his or her client's settlement objectives. On the other hand, the fairness paradigm encompasses the equally worldly truth that, in negotiations, no one can be forced to accept unreasonable terms. Together, the paradigms co-operate.

Finally, this discussion would not be complete without some mention of the principle of indeterminacy, or uncertainty. That is, there is an inherent difficulty for any trial lawyer, or human being for that matter, in predicting future results based on present knowledge of past events. There is, in other words, some measure of uncertainty in counsel's even most sober evaluation of advantage. Uncertainty can be reduced, more or less, but never eliminated, nor, at times, even managed very well. Simply too many variables exist, with too many unknowns. The fairness paradigm, then, provides a useful point of departure from the uncertainty conundrum, focusing as it does on an entirely different set of questions and concerns.

Conclusion

Conventional wisdom holds that trial counsel should defer settlement negotiations until after they have secured a position of advantage over their adversary. However, the advantage paradigm can frustrate the start of settlement negotiations; prolonging litigation and increasing costs. The fairness paradigm substitutes a different criterion for timing settlement negotiations. Under this paradigm, settlement negotiations should be considered when each side can affirmatively answer two questions. (1) Am I willing to come to the negotiating table if the other side is willing? (2) Am I willing to resolve the dispute based on settlement terms that fairly reflect the duties and responsibilities of each side? By refocusing on these questions instead of, or at least in addition to, the question of advantage, parties can reconsider the negotiation option in a different light: one more supportive of a negotiated resolution. By taking this approach, the duration of litigation can be reduced, as can associated transactional costs and burdens from which no litigant is immune.