Settlement Facilitation 101

two men disputing settlement at desk with laptop

If you are a recent law school graduate or a newer attorney, you may not even know what a settlement facilitation is. Alternatively, you may primarily practice in a different jurisdiction and have been ordered to participate in settlement facilitation and are unfamiliar with the term.

Settlement facilitation is a process whereby two parties involved in a dispute in court, meet with a neutral third party whose goal is to resolve their dispute. Represented parties will generally attend settlement facilitations with counsel but the Court will not appoint counsel for an unrepresented party.

Settlement facilitation is a form of mediation. The main difference is the influence provided by the facilitator. In mediation, the mediator is sometimes an attorney, but more often a local layperson, and rarely an attorney who practices in the field involved in the lawsuit. Conversely, settlement facilitations are almost always conducted by an attorney, or even former judge, who is well-versed in that particular area of law, in my case, divorce and custody law.

Mediations and settlement facilitations are also governed by different rules. The rules of mediation are found in the New Mexico Statutes, Section 44 (NMSA 44-7B-1-6). The only rule is that all communications during mediation are confidential. These rules for mediations also apply to settlement facilitations.

Rules for settlement facilitations are set forth in the local rules for each of the thirteen New Mexico districts. The local rules for the second district, governing Albuquerque, are the most specific and are used by most practitioners. They can be found in the Local Rules (LR2-602).

For our purposes today, the only real rule difference between the two, is the mandate for an information letter for settlement facilitations. LR2-602(H) provides that the parties shall provide the settlement facilitator an information letter including but not limited to:

(1) case number and caption;

(2) brief description of the case; in domestic relations cases include date of marriage, separation, and divorce; names, ages, occupations, and current annual incomes of parties; and names and ages of children;

(3) description of the relief sought;

(4) list of pending factual issues;

(5) list of pending legal issues;

(6) list of all remaining discovery;

(7) list of any pending dispositive motions;

(8) estimate of costs and attorney fees through trial;

(9) the last offer made to other parties; and

(10) copies of case law, statutes, pleadings, exhibits, orders, and any other information that would be helpful to the facilitator(s).

NMRA LR2-602(H)

Although I have conducted hundreds of settlement facilitations, I frequently receive no information from the other side. Failure to send a narrative including the 10 factors above puts your client at a distinct disadvantage and there is never a time when this information should not be provided in advance of the facilitation.

Why should you provide this information? Because you need to tell the facilitator what to do. The facilitator’s job is to facilitate the parties in reaching a settlement. The facilitator will usually place the two sides in different rooms and will “shuttle” back and forth between the two rooms gathering information and relaying proposals from each side. A good settlement facilitator will review each side’s proposals and may help fine-tune counter-proposals based on the facts in evidence. For instance, in a spousal support case, the facilitator will review the parties’ incomes and budgets as well as the alimony guidelines in meeting with one side. If that party’s proposal is way outside the bounds of what the court might award in an alimony case, the facilitator may offer suggestions to help move the case forward. These suggestions would be based on the expertise of the facilitator in litigating alimony cases.

This is where being a well-prepared attorney going into a settlement facilitation can help their client. In your pre-facilitation narrative, you should have provided the facilitator both parties’ income figures as well as both parties’ budgets. You should have prepared alimony guideline calculations and presented those to the facilitator in advance of the facilitation so that the facilitator is aware of your position. You should have case law supporting your position if it deviates substantially from the norms or from the guidelines. You should set the bar for what spousal support should be.

When you do this, you can help “sell” your position to the facilitator, who will then help “sell” it to the other side. If you do not provide this information to the facilitator, the other side may do it for you, albeit, with much lower numbers that benefit the other party involved. Because the facilitator is not an advocate for your client, the facilitator will not produce those numbers for you.

It is also important to bring previously filed pleadings to the facilitation for the facilitator to review. You should never presume that the facilitator will simply download the case file. The pleadings in your case or the “law of the land.” They can determine so much in a settlement facilitation and I cannot emphasize enough that they should be provided to the facilitator or at least reviewed by counsel prior to the facilitation.

In the instance of the alimony case, the wife may be requesting alimony. A review of the pleadings may reveal that the wife never actually requested alimony in her initial petition, thus prohibiting her from requesting alimony at trial, without significant cost to amend the documents. A review of the court file may also reveal that certain other matters were either never raised in the initial petition or already resolved by previous court order. It is important to know this prior to going into facilitation.

It is also vitally important to bring your evidence to the facilitation. Again, this will help the facilitator “sell” your proposal to the other side. If you are requesting to modify custody or timesharing, for instance, and your argument is that the other parent is unfit to parent the children, then you must be prepared to convince the facilitator not only of your argument, but of your argument’s viability in court.

What about bringing witnesses or family members that may help substantiate the client’s claims? Because settlement facilitation is an informal process, witnesses are not needed. However, if the case depends upon witnesses, the attorney should have a summary of the intended testimony. Additionally, if you think friends or family members would assist the client in understanding the issues or to provide helpful emotional support, then, by all means, allow them to attend. But if they are there just to fuel the animosity, they should be left at home.

The attorney’s role at settlement facilitation can sometimes be difficult to navigate. Is the attorney an advocate for the client or an assistant in the facilitation? The answer is yes! As an advocate for your client, you should also at all times be prepared to discuss the viability of the client’s case with the information that may have been provided by the facilitator. For instance, if the client believes they have a winnable spousal support argument, however, the facilitator has poked several holes in it, the attorney must be prepared to regroup and to balance the client’s wishes with the information provided by the facilitator. Settlement facilitation is not the time to blindly advocate for the client, but to exact reality checks.

Finally, what do you do when a client just won’t budge off their position? The client is ultimately the boss. As long as the client has heard the pros and cons of reaching a settlement and the pros and cons of going to court, then the client has made an informed decision and their wishes should be respected. It is neither facilitator’s job, nor the attorney’s job to force a client into a settlement and in fact, such violates the rules of voluntary participation.

However, the attorney must be prepared in both the law and the facts of the case in order to fully and knowledgeably inform the client. And the attorney must consider the arguments of the facilitator who has now seen both the evidence and the arguments from both sides much like a judge. Settlement facilitation is good way to give your client the bad news of his case. Sometimes it is hard to argue with a client who wants what he wants regardless of the law. Sometimes, the particular area of law may be a gray area and the case could go either way. Settlement facilitation is a good way to hear from an experienced family law attorney how the judge may resolve the case. It’s easier for the facilitator to deliver the bad news than the party’s own attorney in those situations.

What happens when your proposals have been sound and supported by facts and law, but the other side refuses to settle? First, do a cost-benefit analysis of the case if it goes to trial. The costs will include the cost to finish discovery, prepare for trial and litigate the case, costs that are substantial. There is also the emotional cost and the cost of keeping one’s life on hold to some extent until the case is over. Is it really worth a few thousand dollars that your client refuses to pay or give up? If the answer is yes, it is worth the cost to trial.

If you are going to trial post-facilitation, then ensure that you have done two things. Always make an offer to the other side prior to facilitation as well as an offer after facilitation. Offers made during facilitation are inadmissible. By making an offer after facilitation, you have complied with Rule 1-127 which considers prior offers in the Court’s discretion to award attorney fees to one party or the other. If the court’s ruling is substantially similar to the last offer you made, your client may be awarded fees and costs. But if you made an offer prior to facilitation and the other side really didn’t waiver from their initial position as sometimes occurs, you can also make an argument for failure to negotiate in good faith and you have evidence to produce to the judge in arguing for fees. This is a really good mechanism for obtaining attorneys fees for your client.

In summation, be prepared when you attend settlement facilitations. Know your case and know the applicable law. Facilitation is not just an informal meeting. It is a way to end the case in a manner that benefits your client, with predictability that will not occur in court.