What is Case Evaluation?

Why is it important to my case?

What is Case Evaluation?

Case Evaluation (“Case Eval”) is a mediation process in Michigan that is used by civil courts to promote settlements.  Essentially, three experienced litigation attorneys (the “panel”) listen to the arguments from the parties and then determine what they believe is a fair value for the case.  The panel then reveals that value in writing to the parties on a form called the case evaluation “award.”

If a plaintiff or defendant wishes to settle for the suggested amount, they can accept the award.  If both parties accept the award, the case is settled for the award amount.  If one party rejects the award, the case moves forward to a settlement conference with the judge.  

For example, if a plaintiff and defendant go to case evaluation and the panel gives an award of $10,000 and both the plaintiff and defendant tell the court that they wish to accept the award, then the defendant has to pay the plaintiff $10,000 to settle and close the case.  However, if either defendant or plaintiff rejects the award, the case does not settle, the defendant does not pay the plaintiff (yet), and the parties will be informed that they need to attend a settlement conference.

How does Case Eval work?

After the close of discovery (anywhere from 3 to 9 months after filing a lawsuit), the court sends attorneys for the parties notification of a case evaluation hearing date.  The attorneys for each party must submit written briefs summarizing their arguments to the panel a 14-days before the case evaluation hearing.  At the hearing, attorneys for each party make oral arguments to the panel.  

The plaintiff’s lawyer will try to convince the panel to give as high of an award as possible.  The defendant’s lawyer will try to convince the panel to give as low of an award as possible.  At the conclusion of the hearing, the panel issues an award.  

What happens after Case Eval?

After the case evaluation hearing the parties have 28-days to either accept or reject the award.  If both parties accept the award then the case is settled for the award amount.  If either party rejects, the case moves forward.

What is the consequence of rejecting a Case Eval Award?

The case evaluation rules were designed to encourage acceptance and settlement.  This was accomplished by creating a penalty for rejection of the award.  Specifically, if a party rejects an award and does not beat it by 10% at trial, then the losing party will be liable for the winning party’s attorney fees.  This could amount to tens of thousands of dollars in sanctions against the rejecting party.

For example, let’s say there was a $10,000 case evaluation award in a case.  If the plaintiff rejects the award, she then has to get $10,100 or more at trial in order to avoid being sanctioned.  If the case proceeds to trial and the jury verdict is $10,099 in favor of the plaintiff, the plaintiff would likely end up owing the defendant money because attorney fees on a case that goes to trial will be very high.

Conversely, what if there was a case evaluation award of $10,000 and the defendant does not beat it?  The defendant would need to get $9,900 or less to “beat” the case evaluation award (since the defendant is trying to get the verdict as low as possible).  If the verdict at trial is $9,901, then the defendant would end up paying $9,901 plus tens of thousands more in attorney fees to the plaintiff.  Accordingly, rejecting a case eval is always a risk.

Who are the attorneys on a case evaluation panel?

Case evaluation panels are composed of three experienced attorneys who have been selected by local courts based on their practice backgrounds.  The panel will have one attorney who has practiced primarily as a plaintiff’s attorney, one attorney who has practiced primarily as a defense attorney, and one attorney who has significant experience as both a plaintiff and defense attorney.  

How does a Case Eval panel determine the value of an award?

Case evaluation awards are based on a large number of factors.  Unfortunately, there is not a lot of uniformity and some of the factors involved are not relevant or fair.  For this reason, the vast majority of cases do not settle through case evaluation.

Some of the factors considered in determining an award:

  • Merits of the arguments.  The party that presents stronger arguments has the best chance for getting a favorable award.  
  • Venue.  The court in which a case is filed in will significantly impact the value of a case. Conservative counties tend to be more defense and insurance-friendly, whereas liberal counties tend to be more plaintiff-friendly.   
  • Panelists. Who is on the panel is also an important factor for awards.  Sometimes a panel is dominated by the plaintiff’s evaluator or the defense evaluator.  This can result in unfair increases or decreases in the award.  Sometimes the defense evaluator is very plaintiff-friendly or the plaintiff’s evaluator, inter alia, used to work for the insurance industry.  This can result in unfair awards as well.

Should I accept or reject my case evaluation award?

Whether or not you should accept a case evaluation award is a very personal decision that should be made after receiving advice from your attorney.  Every case and case evaluation award is different.  The objective value of the case, your likelihood for success at trial, and whether or not you are collectible (incase you are sanctioned after a rejection) are all important considerations you should discuss with your attorney before discussing accepting or rejecting a case evaluation award.