Reflections on
Reconciliation
The Advantages of
Settlement and Compromise Over Conflict and Uncertainty
By Hal Armstrong, Esq.
Attorney and Counselor at Law
October 8, 2009
An hour-long delay sitting on an airplane at the end of the
runway at Reno-Tahoe airport last Wednesday led me to consider
the value of reaching an agreement to resolve a dispute.
A day earlier, my client had requested that I book a last-minute
flight to Nevada so that I could assist her with a hearing in
the contested probate of an estate worth over $2,200,000.00.
Although I am not licensed to practice law in Nevada, and
although my client was confident in the abilities of her
Nevada-licensed attorney, my client decided at the last minute
that she also wanted me there because of my thorough familiarity
with the factual and legal issues involved.
Without going
into too much detail, one faction of the family wanted to
distribute over a third of the estate to the heirs, while
another faction believed that the proposed distribution was
premature until the bills of the decedent and the estate had
been paid. The parties’ desires for the distribution
predictably reflected their own interests, with the individuals
who would receive money favoring the distribution, while those
who were classed as creditors of the estate opposed the
distribution. Needless to say, besides their divergent
self-interests, the parties also were separated by family
disputes that had been simmering for years prior to the
decedent’s death.
At the
courthouse only minutes before the scheduled hearing, opposing
counsel asked to meet for a moment without the clients. They
then made a proposal that I knew would not be acceptable to my
clients, but I also recognized that their proposal signaled a
willingness to compromise in the areas that were most important
to my client. After a couple of strategically prepared and
tactfully presented counteroffers, we reached an agreement that
gave my client what she wanted. The attorneys left the
courtroom, but the family stayed behind, chatting cordially and
exchanging heartfelt embraces.
In the end,
rather than conducting an evidentiary hearing, the judge came in
only to enter our agreement into the record and adopt it as the
order of the court. Without actually holding a hearing, my
client came away with an order that gave her everything we could
have hoped to obtain through a full day of presenting exhibits,
testimony, and cross-examination, and the family made a
significant first step towards healing their relationships.
I even was able
to make the afternoon flight back to Salt Lake City, but the
takeoff was delayed, and we sat over an hour at the end of the
runway. Rather than watching the tired romantic comedy
playing on the 12-inch screen hanging from the ceiling two seats
in front of me, I found myself thinking about three principles
that the day’s settlement emphasized to me.
1.
Certainty. Probably the most important advantage of
resolution over litigation is the certainty that an agreement
can provide. Especially in the world of commercial
litigation, a protracted legal battle means not only costly
legal fees, but also unpredictability. In our case, I had
been preparing our position for weeks, and I was extremely
confident in the strength of our position. However, no
matter how skilled or how well prepared an attorney may be, no
attorney can accurately predict, let alone guarantee, how a
judge will rule on any given issue in any given case. All
the attorneys can do is present their positions as persuasively
as they can, leaving the ultimate determination for the court to
make. In contrast, when the parties agree to resolve their
dispute, they together determine their own outcome, and
statistically are more likely to abide by their agreement than
they otherwise would be to accept the court’s decision without
challenging it. Resolution is particularly beneficial to
business clients, because it allows them to move forward with
plans, where the uncertainty of continued litigation is perhaps
more debilitating than even a negative result would be.
2. Preparation. In settlement just as in
litigation, a positive result is best attained through
preparation. It is essential to be prepared to continue
the litigation to its conclusion, in the event that there is no
settlement. Indeed, without preparation, it is often
difficult to bring the other side to the bargaining table.
In the adversarial system of litigation, if opposing counsel
sees that you are not prepared or are not handling the case
seriously, that attorney will not compromise, but rather will
take advantage of your weakness to the detriment of your client.
Skillful and thorough preparation for litigation encourages
settlement in the same strategic way that military strength
deters aggression by hostile forces. It is extremely
short-sighted to cut corners in litigation in order to cut
costs, because in doing so you not only sacrifice your
likelihood of prevailing in court, but you also undermine your
chances of reaching a beneficial settlement. That is not
to say that economic considerations are not part of an effective
litigation strategy. However, as a general rule, if a case
is not worth the expense of litigating successfully, it probably
is not worth litigating in the first place. For that
reason, it is important to make a practical and dispassionate
economic assessment of the case prior to commencing the
litigation. Once you find yourself in litigation, your
best assurance of a positive outcome—whether through the courts
or through settlement—is an absolutely prepared attorney.
3.
Reconciliation. Seldom are parties so dedicated to
litigating against one another that they will not appreciate a
good-faith attempt to compromise. Particularly in cases
where there is a dispute over the family business, the
differences between the parties usually involve much more than
the relevant legal facts to be determined. When the
parties can agree to resolve even a trivial dispute that
previously separated them, it can go a long way towards mending
the rifts that underlie the parties’ dispute. In our case,
I do not think that anyone present had any delusions that the
agreement reached at the hearing resolved all of the differences
within the family. Indeed, the stipulation resolved only
the issues that would have been decided at the hearing, while
many other disputes remain to be decided in the overarching
probate case. Yet by reaching that agreement, the parties
showed each other that they are able to put some of their
differences aside when it is in their mutual best interests, and
subsequent communications between the parties are more likely to
be welcomed and considered with less hostility. In purely
commercial situations, this consideration is less significant
than in closely-held or family-owned businesses or family law
cases. However, even among parties that have little or no
personal interaction with each other outside of the litigation,
resolution still leaves the parties in a better position to move
on after their dispute than does a judicial determination of the
merits of their cases.
Once the delay is
over and we are en route back to Salt Lake, it occurs to me
that, while, as an attorney, the professional experiences that
have been most satisfying to me personally have been those where
a judge ultimately ruled in our favor and adopted my reasoning
in the court’s conclusions of law, in contrast, the experiences
that have been most satisfying to my clients have been those
where we have reached settlement agreements. In the end,
that is the best assessment of any outcome. {-}