Complex Civil Appeals: Making the Case for Settlement

By Jerome Falk, Esq.

More than 90 percent of civil cases are settled without trial. By contrast, most civil appeals are briefed, argued and decided by the court. In complex cases when large amounts of money are at stake, settlements pending an appeal seem to be the exception: such appeals frequently go forward to decision without a serious attempt to settle.

There are reasons to consider a settlement discussion before putting the parties’ fate in the hands of an appellate panel. To begin with, the popular Court of Appeals figure of 80 to 85 percent affirmance is a gross statistic based on all civil appeals. No data is available for well-lawyered complex civil appeals in which the stakes are high enough to permit comprehensive exploration of every possible legal issue. So there is real risk for the happy litigant who prevailed in the trial court.

Other factors put additional weight on the scale in favor of exploring settlement. From the plaintiff’s point of view, a settlement accelerates the payday. On the other hand, a three-year delay in resolution exposes the defendant to a 30 percent surcharge on the judgment amount (10 percent simple interest per year on judgments).

Often, litigants who engaged in mediation shortly before trial will return immediately after a verdict or judgment to discuss possible settlement. Those efforts are sometimes successful. However, the prevailing party is not especially interested in compromise and the loser expresses confidence that the appellate court will straighten out the mess created by the trial court. Everyone walks away more convinced than ever that the case can’t be settled.

However, there may be another avenue to consider: a settlement discussion or mediation after the appeal has been briefed. The several months between the close of briefing and notice of oral argument could be an ideal time to revisit the issue of settlement. Each side will have put its arguments in the best possible way, and those arguments can be evaluated by the parties and a mediator with greater precision than would have been possible at pretrial, or even immediately after the judgment.

Settlement discussions at this stage will focus on the likely outcome of the appeal, which in turn depends upon a prediction of how the appellate court will resolve the legal issues presented. The parties may want a more evaluative mediation than would customarily be provided prior to trial. The mediator may also assist the parties by pointing out the range of possible dispositions, including affirmance, modification of the judgment, partial reversal, a retrial on some issues or a retrial of the entire case. That could be facilitated by use of a “decision tree” in which the parties identify and estimate the likelihood of every possible outcome as a way of determining the settlement value of the case. Settlement discussions at this stage can explore a range of outcomes that better fit the parties’ personal and commercial needs than an adjudication would.

Trial lawyers know the value of a good settlement. Considerations similar to those that lead to settlements before (or sometimes during) trial should cause counsel to seriously consider exploring the possibility of settlement after verdict and judgment.