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  • May 25, 2021

    Neutral Evaluation: A Close Cousin to Mediation

    In complicated cases, neutral evaluations may be a better method of dispute resolution. Roy Wagner discusses when and how to use this close cousin of mediation.

    Roy E. Wagner

    Lawyers often pick a mediator with a significant amount of subject matter expertise. However, the typical mediation format may not be the best use of your selected subject matter mediator in cases that are complicated, have had some discovery, and have difficult-to-prove damages.

    Roy E. Wagner Roy E. Wagner, Marquette 1978, is leader of the Construction Law Group at Michael Best & Friedrich LLP, Milwaukee. He concentrates his practice in construction law and serves as mediator/arbitrator on construction matters.

    If both counsel acknowledge these issues, a better alternative may be “neutral evaluation,” where your neutral third party hears presentations and provides a nonbinding evaluation of the dispute.

    When to Commence Neutral Evaluation?

    Traditional Mediation Impasse Techniques. In a complex case, the parties may have tried many impasse-breaking techniques, such as a caucusing, silence, setting objective criteria to set parameters, restating all prior agreements, suggesting a trial period, using catalysts “What if …” as well as shifting perspective, “If you were the other party, what would they say doesn’t work about your offer?”

    Still, what if they have reached an unshakable impasse?

    To avoid terminating the mediation, the parties could agree for the neutral evaluator to take on a new role, providing an informed, non-binding evaluation recommendation to both sides.

    Any such option must be explained at the outset and included in the written agreement. There must also be a distinct boundary where everyone is aware of and agrees to transition to Neutral Evaluation.

    Neutral Evaluation from the Beginning. In the alternative, parties can initially choose this process. Attorneys should retain someone they trust with both significant subject matter expertise and mediation experience. Clients must understand that this process is nonconfrontational and be prepped to listen to the neutral evaluator’s opinion. This option is particularly useful for parties who are wedded to their case.

    Following the nomination, the neutral can arrange what information they require including written statements (e.g., relevant documents, background of case, deposition testimony, etc.). This is where expectations must be made, and boundaries enforced.

    The initial preliminary session begins with lawyers presenting a summary of their clients’ cases in a back-and-forth dialogue, while the neutral asks questions designed to elicit information and to provide clarity. Naturally, those questions will intentionally or unintentionally signal the neutral’s viewpoint.

    At the conclusion, the evaluator will prepare a written evaluation which can be either in paragraph or bullet-point form. The neutral evaluator will provide the pros and cons for each side from their unique professional perspective. It should encompass the parties’ respective positions and may include a settlement range, if not an actual sum, depending on what was initially agreed upon.

    The parties are then free to release the neutral evaluator and commence more traditional mediation settlement discussions.

    It could be said that starting with this evaluative process reduces the ownership each party may have in a mediated settlement. Therefore, it is important to clarify the roles and purpose of the neutral evaluator with clients and to ensure that the clients feel they have been fully heard before receiving any evaluation.

    Not all mediated cases are appropriate for neutral evaluation. This would include cases where discovery has not been developed and it is not yet ripe for resolution.

    But for those cases where it is applicable, neutral evaluation provides a speedy, private, and non-adversarial opportunity for the parties to consider settlement, almost in a mini-trial nonbinding format. It is an opportunity for neutrals to provide another method of resolution for the right case.

    This article was originally published on the State Bar of Wisconsin’s Dispute Resolution Blog. Visit the State Bar sections or the Dispute Resolution Section webpages to learn more about the benefits of section membership.

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    Dispute Resolution Section Blog is published by the State Bar of Wisconsin; blog posts are written by section members. To contribute to this blog, contact Lisa Derr and review Author Submission Guidelines. Learn more about the Dispute Resolution Section or become a member.

    Disclaimer: Views presented in blog posts are those of the blog post authors, not necessarily those of the Section or the State Bar of Wisconsin. Due to the rapidly changing nature of law and our reliance on information provided by outside sources, the State Bar of Wisconsin makes no warranty or guarantee concerning the accuracy or completeness of this content.

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