Everything You Need to Know About Settlement Negotiations Kirk Willis, Partner September 13, 2005

Start With The End in Mind

Settlement  Goes hand in hand with trial  Must set the case up for trial  Be aggressive about the set-up

Keys to Successful Settlement  Thorough trial preparation  Client/Insured Interview  Impression to the other side that the case is ready for defense  Attention to detail is key to this impression  Minimize surprises

Settlement  Know the social value of your case  Don’t underestimate the human factor  Be honest but stern

Settlement v. Expenses  Key Expenses Uncertainty –Records –Deposition (Attorney, Court Reporter & Videographer) –Experts –Mediation –Trial [Attorney, Court, Expert, Exhibits Guy]

Settlement  Evaluation of settlement possibilities  Background of parties  Witnesses  Circumstances of accident  Damages (Do they get worse?)

Settlement  Don’t be afraid to “Throw in your Policy” 1)Bad Facts + 2) Big Damages = Policy Settlement Who goes first?

Settlement  Head injuries [Brain damage] When is the right time to settle?  Children unresolved problems [Stuff happens]  Elderly [Non-symptomatic arthritis] (No Clear Rule)

Settlement  Tort Reform 2003  Shifting:  Purpose –Penalizes those who reject reasonable offers –Rewards those making reasonable offers 1)Litigation Cost 3)Attorney fees 2)Court cost 4)Two expert fees

House Bill 4  All lawsuits filed on or after January 1, 2004 [Declaratory, Injunctive other Equities]  Monetary relief only

Claims Excluded  Class Action  Shareholder derivative  Action against Government  Action under Family Code  Workers Comp  Justice of the Peace

Reasonable Settlement Triggered  Statute says anyone can claim reasonable settlement Counter Claim Or Cross Action  Not triggered until Defendant’s Declaration  Under this statute, Plaintiff can be Defendant if:

Reasonable Settlement Triggered  Multiple Defendants? [Good cause can change] –Each Defendant must file separate Declarations –The Declaration must be made no later than 45 days before the case is set for trial

Reasonable Settlement Triggered  Rule does not apply to: 1.“Any offers made during mediation / arbitration” 2.“Any offers not following Rules don’t trigger fee-shift”

Reasonable Settlement Triggered  Requirements Tex. Civ. Prac. & Rem. Code § ; Tex. R. Civ. P (b) 1)Writing; 2)Made under Rule 167 and Chapter 42 Texas Practice Code; 3)Identify parties making offer and parties offer made; 4)State terms all monetary claims, attorney fees, cost and interest – may settle; 5)State a deadline – must give at least 14 days 6)Be served on all parties to which offer is made

Reasonable Settlement Triggered Conditions No Shifting! 1)They may have reasonable conditions 2)Condition Rejected??

Time Limits To qualify, an offer may not be made 1)Before a defendant’s declaration is filed; Rationale 2)Within 60 days of the appearance in case; 3)Within 14 days of trial; [offer can within 7 days in response to other] Within 14 days of trial; [offer can within 7 days in response to other] A.Can’t join and make immediate offer B.Not on courthouse steps

Time Limits  Successive offers  Yes, as long as favorable  Withdrawal  Yes, in writing  Acceptance  Yes, in writing [must be filed with request to enforce same to the Court]  Rejection  Be careful…

Time Limits Rejection – Offer made. If offeree does nothing, that triggers the shifting of fees.

Time Limits “Litigation Cost” Triggered when the Judgment is significantly less favorable to Rejecting Party.  Plaintiff – His award is less than 80% of the rejected offer  Defendant – The Plaintiff’s award is more than 120% of the rejected offer.

Accident + Injury = Negligence  Plaintiff damages$10,000 Fee Shift  Plaintiff Offers$20,000  Defendant rejects offer  Jury Award$25,000 1)Attorney Fees 2)Cost of Court 3)2 Experts

Accident + Injury = Negligence  Plaintiff damages$10,000 Fee Shift  Plaintiff Offers$20,000  Defendant rejects offer  Jury Award$15,000 1)Attorney Fees 2)Cost of Court 3)2 Experts

Accident + Injury = Negligence Questions  What constitutes judgment? –Interest –Modification –Take Nothing Judgment

Litigation Cost  Court Cost  Fee for two experts –Testifying experts  Reasonable attorney fees  All fees are limited to the time the offer was rejected to judgment

Limited Amount 1)Cost cannot exceed a)Non-economic b)Additional damages c)½ of economic damages

Limited Recovery  Defendant can only receive litigation cost as a set off against Plaintiff’s judgment.

Discovery on Reasonable Fees 1)Yes one may, but one will pay 2)If the court determines Reasonable, then Plaintiff will pay that cost of discovery

Settlement  Consider every element of your case –Pre-impact terror –Instant of crash –Injured without assistance –Period of peril –Mental anguish

Settlement  Other factors –Emergency care –Actual relief –Transport to hospital –Major v. minor injuries –Therapy and treatment

Everything You Need to Know About Settlement Negotiations Kirk Willis, Partner September 13, 2005