An Alternative to a Lengthy Lawsuit
Robert M. Smith, Esq.
A minitrial is not a trial, but a voluntary, nonbinding settlement technique. Each side makes a summary presentation of the case to a joint panel made up of a senior management person for each side. There are two parts: an information exchange and intensive negotiations. The theory is that the problem is primarily a business problem, not a legal problem. A danger is the disclosure of possible evidence and future trial strategies. The process can be expensive and requires the participation of high-level executives, but these executives understand the business and may be able to cut to the core issues quickly.
|In the quest for cost-effective
alternative to litigation, those involved in mediation and alternative
dispute resolution are coming to appreciate the benefits of the minitrial.|
A minitrial is not really a trial at all, but a voluntary, nonbinding settlement technique. At the minitrial, each party to a dispute makes a summary presentation of its case to a joint panel made up of a management person from each side. The panel members must have the authority to negotiate and approve settlements.
A minitrial has two distinct parts; the first is the information exchange between the parties (both before and during the minitrial itself), and the second intensive negotiations between the parties.
A minitrial is a sophisticated form of settlement conference, combining elements of private negotiation, mediation, and adjudication. The theory behind minitrials is that many disputes are primarily business problems and not legal problems. These disputes are best settled through prompt negotiation involving executives of the disputing businesses.
One of the first reported minitrials involved a dispute with a computer terminal patent. The plaintiff was asking for $6,000,000. The litigation had gone on for three years and had cost the parties $500,000 in legal and expert fees. After a two day minitrial, the dispute was settled in 30 minutes of negotiation.
Minitrials are most effective and most frequently used in disputes involving large corporations with relatively equal bargaining power.
Minitrials are a good method for resolving disputes in which the underlying law is settled.
On the other hand, parties should generally not consider a minitrial when the underlying legal issues are uncertain or when they want to create legal precedent for other cases.
Minitrials may be expensive because they often involve development of each party's case through discovery before the case can be presented at the minitrial hearing, even in a shortened form.
Because of the potential expense, minitrials may not be appropriate for personal injury and other tort cases, or cases involving small amounts of money. When speed and expense are primary considerations, parties should consider mediation as an alternative to a minitrial.
One advantage of a minitrial is that it requires high-level executives on each side to become involved in resolving the dispute at an earlier stage than usual in litigation. They hear the opposing side's story, perhaps for the first time, not through their own counsel's words, but directly from the opponent. This can deepen their understanding of the problem and its roots, and possibly clear up any misconceptions or misunderstandings as to the other side's actions and positions.
|Generally, executives do not
become deeply involved in litigation until the case reaches the courtroom
steps. At that time, after considerable time and money have been spent on
legal fees and costs, the executive must confront hard questions about the
chances of success, the cost of a full-scale trial, the outside
possibilities of the corporation's liability, and the effect of a loss on
The answers to these questions often motivate settlement of a dispute. A minitrial can give executives an opportunity to become involved in resolving a dispute at an earlier stage, potentially saving the corporation significant time and money.
The use of high-level executives also requires that the lawyers present a reasonable and fair representation of their client's case in layperson’s terms; the lawyers do not want to embarrass their clients in front of a counterpart from the other company. A minitrial could be considered as a dry run for a later court trial.
This aspect of the minitrial procedure also gives rise to one of its disadvantages: It may give the other side advance warning of future trial strategies and important, undisclosed evidence.
However, a dry run also allows parties to weed out unimportant, collateral or technical problems that may be obscuring the real dispute and to eliminate areas in which the parties are in agreement.
In this respect, even if the dispute goes to trial before a judge and jury, a minitrial may focus the issues, saving time and money in the trial.
Other advantages to minitrials are similar to those of negotiation and mediation: their non-binding and confidential nature, the preservation of business relationships, and the savings in time and expense over a full court trial.
Another advantage stems from the use of experienced knowledgeable business executives on the panel. Executives already have an understanding of industry customs and practices and of the technical underpinnings of the dispute.
The parties may be able to craft any resolution to fit within prevailing industry customs and practices. When was the last time your business encountered a judge or jury who really understood the financial intricacies of your business?
Experienced business executives may be able to quickly cut to the core issues for the corporation and avoid spending too much time on collateral issues that are important only to the lawyers.
is taken from a chapter of Mr. Smith's book Alternative Dispute
Resolution for Financial Institutions (West Group, updated annually,