Everything You Need to Know About Settlement Negotiations

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

2. Start With The End in Mind

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

4. 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

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

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

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

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

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

11. Settlement • Tort Reform 2003  • Purpose • Penalizes those who reject reasonable offers • Rewards those making reasonable offers Shifting: • Litigation Cost • Court cost • Attorney fees • Two expert fees

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

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

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

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

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

17. Reasonable Settlement Triggered • Requirements • Writing; • Made under Rule 167 and Chapter 42 Texas Practice Code; • Identify parties making offer and parties offer made; • State terms all monetary claims, attorney fees, cost and interest – may settle; • State a deadline – must give at least 14 days • Be served on all parties to which offer is made Tex. Civ. Prac. & Rem. Code § 42.003; Tex. R. Civ. P. 167.2(b)

18. Reasonable Settlement Triggered Conditions • They may have reasonable conditions • Condition Rejected?? No Shifting!

19. Time Limits To qualify, an offer may not be made • Before a defendant’s declaration is filed; • Within 60 days of the appearance in case; • 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] Rationale Can’t join and make immediate offer • Not on courthouse steps

20. 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…

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

22. 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.

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

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

25. Accident + Injury = NegligenceQuestions • What constitutes judgment? • Interest • Modification • Take Nothing Judgment

26. 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

27. Limited Amount • Cost cannot exceed Non-economic Additional damages • ½ of economic damages

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

29. Discovery on Reasonable Fees • Yes one may, but one will pay If the court determines Reasonable, then Plaintiff will pay that cost of discovery

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

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

32. Everything You Need to Know About Settlement Negotiations September 13, 2005 Kirk Willis, Partner469-893-3577