W(h)ither Case Evaluation?

The dispute resolution process now known as “case evaluation” has been used by Michigan courts for forty years to settle litigated cases, but it is now on the far side of the bell curve in terms of its effectiveness. The basic concept seems sound: have a team of three outside attorneys review the case and offer their opinion as to its value, giving both sides an objective basis for negotiating a settlement. The original panels consisted of experienced, well-respected attorneys knowledgeable in the area of the law of that case. Their collective, seasoned assessment was hard to dispute, and the process resulted in many settlements.
As with other ADR processes, as soon as courts realized how effective it was, they sought to mandate it. It is now required of all tort cases filed in Michigan, and many courts order all civil cases to case evaluation. But two things have happened to reduce its benefit. Practitioners readily identify one cause: the expansion of panel members to include any attorney who has practiced for at least five years. Panels no longer consist of “blue-ribbon” attorneys well-respected in their field, and may now include lawyers who do very little litigation and/or have little subject-matter expertise. So litigators now have good reason to question the panel’s determination.
The other factor is not so widely discussed. The original premise was that the panel would assess the amount the case would likely garner in a verdict—i.e., after a trial. The reality nowadays is that very few civil cases go to trial (fewer than 3% of all civil cases filed), so there’s little basis on which to predict a verdict. Case evaluators tend instead to assess “settlement value,” but since settlements are not usually made public, the value is based more on each attorney’s personal experience with settlements rather than on a widely-known standard.
Thus, case evaluation acceptance rates have been declining steadily in the last couple decades. Whereas originally parties accepted the case evaluation amount over half the time, the acceptance rate in many counties is now as low as 15%. Some counties, such as Grand Traverse and Berrien, have ceased ordering cases to case evaluation.
Meanwhile, as case evaluation’s effectiveness has dropped, mediation’s has increased. To assess both processes, the Supreme Court commissioned a study in 2010, and released the results a couple months ago. The study concluded that case evaluation neither increases nor decreases the cost of litigation much, but it does significantly increase the length of time that a case is open. Based on a sample of about 400 civil circuit court cases, it found that cases not submitted to case evaluation or mediation settled less than half the time; if they went to case evaluation, 62% settled; but if they went to mediation, an amazing 84% settled. In its survey of over 3,000 attorneys and 44 judges, it found that judges view case evaluation much more favorably than do attorneys, and have a higher view of the quality of the case evaluation panels than do attorneys. Despite the fact that the case evaluation acceptance rate in the cases studied was just 22% — and only 2% within the 28 days specified by the Court Rule–, the study recommended that the process continue, and the Supreme Court adopted amendments to the court rule on case evaluation (MCR 2.403) that slightly modify the process.
Case evaluation, as the study explains (Appendix A), is unique to Michigan. Some other states have some form of non-binding arbitration, but it is not used as widely, nor imposed through sanctions. Unlike mediation, case evaluation does not involve the clients; the participants, and the panel members, are all attorneys. Until 2000, the process was known as “mediation,” the panel members were called “mediators,” and the number they recommended was termed “the mediation award,” creating confusion both in and outside the state. It bears virtually no resemblance to any type of mediation, and is in fact a form of non-binding arbitration.
It makes little sense to require Michigan litigants to participate in a process that has only a one in five chance of settling the case, but will definitely protract it. Courts have long recognized the need to handle cases more expeditiously; the study reveals that an obvious way to do that would be to relax the requirement that all civil cases go to case evaluation. Only the Legislature can change the statute mandating that all tort cases proceed to case evaluation, but the Supreme Court could do more to educate courts on more effective and expeditious alternatives to case evaluation, such as mediation.


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