Case Appraisals: an effective dispute resolution tool

Written by: Jon Kenfield on Friday, June 28th, 2013
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“Case appraisal” means many things to many people in many jurisdictions.  Appraisals range from institutional, legislated processes (as in the US) through facilities offered or mandated by the rules of court (eg: Queensland), to being a consensual, private process that parties simply agree to use amongst themselves, however they want it to work.  As part of our continuing effort to make dispute resolution more responsive, efficient and cost effective, we’ve developed the style of process covered by this article:  the private process.

Our Case Appraisals can be binding, or non-binding, by agreement.  They are usually “without prejudice” to any other process that may proceed, although when the parties have agreed to be bound by specific findings, that part of the process clearly becomes “with prejudice”.  Each party presents its case, usually in a prescribed and time-limited manner, before the “Appraiser”.  The Appraiser’s job is to form and express an opinion on the strengths and weaknesses of whatever issues are presented to them, with a view to providing a sense of how they could fly in court.

The appraisal may deal with legal, technical, commercial, practical, moral, ethical or any other issues.  Accordingly, our Appraisers are highly experienced and multi-talented, although their findings and conclusions, usually expressed at the conclusion of the process,  cannot be taken to be legal, or any other form of technical professional advice.

Process rules are developed and openly negotiated on a case by case basis.  They include whether to allow:  legal representation (usual), examinations and responses (usual) and direct inquiry by the Appraiser (usual).

The Local Scene
The Case Appraisal concept is not new, nor is it particularly radical.  Business people and ordinary individuals usually want to thoroughly test an expensive idea or product before they commit to buy.  Given the cost of following litigation to the bitter end, a “dress rehearsal” for a court case is a good idea.

Many matters referred to counsel, usually after considerable costs have already been  incurred, are spirited off into the hallowed halls of the Bar to a “conference”.  There, senior counsel will, after their palms have been adequately crossed with copious amounts of silver, provide their informal assessments of cases to the opposing counsel.  Solicitors may be included in this process, although clients are usually excluded.

Whatever advice was formerly given by the clients’ legal advisers, the new pronouncement is generally delivered with the authority of a papal bull – and both advisers and clients are expected to willingly accept them.

The whole “clubby” scenario is often resented by parties who feel disenfranchised by a process that they have to pay for and abide by, but are excluded from.  A comment often heard is that:  “I felt I was treated like a child – as though I was too stupid to understand what to do for my own good”.

Will the real Case Appraisal process please stand up and be counted?
A good Case Appraisal process empowers both unrepresented parties, and parties represented by solicitors, to get a better feel for their prospects of success if they continue to fight.  It therefore usually encourages parties to be more confidently pragmatic.

A properly organised and operated process is flexible, open, transparent and powerful.  We’ve had great success using retired judges and other professionals with legal and dispute resolution training.

Case Appraisals – Key Features

  • Quick and cost-effective.
  • Flexible – easily tailored to party’s needs.
  • Informal, pragmatic & business-like.
  • Comprehensible.
  • Independent.
  • Authoritative.

Example (case study)
The process may best be explained by an example drawn from a real case (identities have been camouflaged to protect the unmentionable):

The Potentially Huge Company Pty Ltd (“Huge”) was established to import and assemble components from Korea for a staff amenity product that was a “no brain seller” to any business employing more than 10 staff.

Huge’s somewhat sparsely supported business plan projected the achievement of fabulous profits within 24 months of commencing trading.  Shady Bank was prepared to lend Huge $1,000,000 on the strength of the plan, along with personal guarantees and security taken over all three director’s homes.

$100,000 was spent importing stock components, the balance was spent buying delivery vehicles, setting up an office, warehouse and computer systems and in engaging and extensively training a telemarketing, assembly and maintenance workforce. In addition, a website was established, brochures were printed, plans were laid and contacts made.

The business was ready to start trading on D-Day, with the telemarketing team required to develop leads from its carefully researched target list to pass onto the sales team, who had their cars warming up on the company launch pad.

Then .. disaster!  No phone service.  The selected telecommunications services provider, to use the correct technical expression, “stuffed up”.  As a result, Huge had only one telephone, no fax and no email lines for four weeks.  A ruinously expensive and highly non-credible attempt to get going using mobile and private telephones was abandoned after two weeks and most of the staff were laid off.

The stock arrived on the wharf and there wasn’t enough money left to pay the duty and fees to retrieve it.  Litigation was commenced using borrowed funds from friends and family.  Claims were made for fabulous sums of money.

The business and legal issues were complex and intertwined and while the experts fought, the client was rapidly bleeding to death with no income.

After a couple of months of sparring, with no agreement in sight over liability or quantum, a Case Appraisal was proposed.  A retired judge was appointed to listen to both sides’ arguments, both legal and commercial.  The judge was provided with an agreed joint briefing paper of less than 10 pages, before the meeting.

The judge was empowered to ask questions and, at the end of the process (which lasted under three hours) was asked to express non-binding views on a number of questions.  The process then adjourned for lunch, the parties having agreed to attempt to mediate the matter that afternoon, using the judge as their mediator.  (Although highly unconventional, according to standard received wisdom, the parties and their advisers agreed that they were happy to proceed with the judge as mediator, since he now had an excellent understanding of both the issues and the parties, everybody trusted him, and the parties had no desire to commence anew with another person).

An acceptable outcome was reached and recorded before the dinner gong sounded and the process was deemed a great triumph of commonsense.  Everybody was obliged to participate actively throughout the day and nobody appeared to feel short-changed by the process.

As an adviser/participant in many disputes, both large and small, it was interesting to mark the fundamentally different dynamics involved in an open and accessible judgemental process, compared with the usual secretive dealings in opposite corners of the ring, broken only by the aggressive activity caused by the clang of the ringmaster’s bell.

All of the Case Appraisals I’ve been involved in have had a wonderful clarifying effect on the minds of the parties.  They’ve generally made it easier for parties, or legal advisers, to reach a quick outcome that sees everyone reasonably satisfied, and gets the solicitors paid promptly.

It’s easy to recommend Case Appraisals as a practical and effective dispute resolution tool, that suits many situations.

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