There are few jurisdictions in the Common Law countries where the parties to a common law action are required to attend a settlement conference, separate and distinct from a pre-trial conference, with a judge to discuss the settlement of their dispute. Such a procedure obtains in the Superior Court for Los Angeles County, California. Authority for the holding of a mandatory settlement conference is contained in the Califomia Rules of Court which provide: “To ensure the prompt disposition of civil cases, each superior court should require settlement conferences in all ready cases . . .”²¹ The mandatory settlement conference procedure came into operation on 12 October, 1971.

I pointed out above²² that, whilst pre-trial conferences are primarily intended to simplify issues, make suitable amendments to the pleadings, limit the number of expert witnesses, obtain admissions of facts and generally prepare cases for trial, they are instrumental in effecting a large number of settlements at once or shortly after they are held. The distinctive feature of the mandatory settlement conference in Los Angeles County is that it is entirely separate from, and additional to, the pre-trial conference. The settlement conference is held subsequently to the pre-trial conference and approximately three weeks before the trial.

The mandatory conference is also additional to the emphasis that the court for many years has placed on voluntary settlements. Where parties to a case have requested that a judge attend a conference, the court has met the request. There is a formalized procedure, set out in printed forms, for settling cases on a voluntary basis. Attorneys on the record may, at any time prior to trial, submit a stipulation requesting judicial assistance in the possible settlement of the dispute. The stipulation must be signed by all attorneys on the record. To assist the court the stipulation must contain specified information - efforts made to effect settlement, specific areas of dispute, contentions of each party, special problems, estimated time for trial, and estimated time for the settlement conference if more than one hour. A detailed, itemized statement of all damages must be provided. All books, records, documents, depositions, photographs, diagrams, maps, bills, contracts and memoranda relating to the case must also be provided on the day of the conference.

Counsel attending the conference must be completely familiar with the facts and law relating to the case. The rules require all persons to be present whose consent will be necessary to bind the parties to any settlement. The voluntary settlement conference arises by agreement and can take place at any time. However, my impression is that it is not invoked very frequently.

The procedure for the mandatory settlement conference is also formalized. To facilitate the conduct of the conference the Superior Court provides a policy memorandum which details the obligations of the parties and of their counsel in respect to the conference. Generally, each plaintiff and each defendant must be present, except where a party’s consent is unnecessary for the settlement of the case, with their respective counsel. Corporate bodies must be represented by a responsible officer authorized to make all decisions regarding the case unless a third party, such as an insurance company, has the necessary authority. Where a party who might be liable for damages has insurance coverage, the insurance company must provide a representative who is authorized to make all decisions regarding the case. Counsel for the plaintiff must bring a list of all special damages claimed, plus corroborating evidence, and, where appropriate, both counsel must bring copies of medical reports. In the policy memorandum it is prescribed that each attorney attending a settlement conference has a duty to be “intimately familiar” with the evidence pertaining to liability and damages. Sanctions for failure to comply with any of the requirements contained in the memorandum may involve vacation of the trial date, dismissal or a monetary penalty.

The Superior Court provides, for the guidance of its judges, a weekly summary of jury verdicts. The summary contains a full statement of the facts of the accident, injuries, special damages, offer, demand, verdict and the ratio of the verdict to the offer and demand. This information is invaluable because it helps to show counsel who are unrealistic in regard to offer or demand what is likely to be the result of the case at hand. Further, where an attorney is dealing with a difficult client, he can show that client the probable result by reference to the summaries of recent verdicts.

The Superior Court has, until recently, allowed settlement conferences to be conducted by various judges. A new procedure restricts this task to judges who have shown interest and competence in effecting settlements. The enthusiasm and ability of judges in conducting settlement conferences had varied widely. It should be noted that, in the United States, judges are not always drawn from the practising profession. I was informed that the most effective judges in this area are those who were outstanding trial lawyers. This is not surprising; it was clear from my observations of these conferences that much depends on tactics and skilled negotiation.

Perhaps the form of the settlement conference can be best explained by illustration. In one settlement conference witnessed by me the only issue was that of quantum of damages. A previous conference having shown that the case might be settled, a second conference had been scheduled. Both parties waited outside the judge’s chambers whilst the judge discussed the issues with their counsel. The plaintiff, who was a dancer by profession, wanted $10,000 for his injuries; the defendant would offer no more than $6,000. The main problem was that the plaintiff had an exaggerated view of his potential as a dancer and, therefore, an unrealistic view of his loss. The judge disclosed to both counsel, at the conclusion of the first conference, that he had assessed the damages at $6,000. He sent the defendant’s counsel out of his chambers whilst he had a discussion with the plaintiffs counsel. The judge emphasized the weaknesses of the plaintiff’s case and the expenses of a jury trial. It could not be said that the judge put heavy pressure on the plaintiffs counsel but he left him in no doubt that the case should be settled. Plaintiffs counsel conferred with his client who requested $7,000 and a settlement was effected in this sum. I was greatly impressed with the skill shown by the judge in moving the parties towards a settlement without actually telling them what they must do. However, the “clout” of the judge was undoubtedly a factor in producing the settlement.

It is difficult to assess the effectiveness of settlement conferences with any degree of precision. Certainly the statistics quoted by the Los Angeles Superior Court must be treated with caution. In the information booklet provided by the Superior Court it is claimed that more than one out of four cases are settled at the mandatory settlement conference.²³ However, the percentage of cases proceeding to trial was decreasing prior to the introduction of the mandatory settlement conference (12 October, 1971) and has generally continued to decrease by a relatively small percentage since that time (1968 - 24 per cent of all cases went to trial; 1969 - 23.8 per cent; 1970 - 20.8 per cent; 1971 - 16.8 per cent; 1972 - 14.9 per cent; 1973 - 13.8 per cent; 1974 - 13.0 per cent; 1975, January to September - 13.3 per cent). It seems, therefore, that the conference is settling many cases that would be settled in the ordinary course of events.

Impressions formed on my research tour suggest that well conducted pretrial conferences are a more significant factor in the settlement of cases than settlement conferences. Settlements are facilitated when as much information as possible is available to the parties so that they become aware of the strengths and weaknesses of the opposing case. But this is not to say that machinery for the settlement of claims ought not to be provided and used in appropriate cases. My investigations overseas lead me to believe that many of the cases settled as a direct or indirect result of settlement conferences would, but for the conferences, proceed to trial. I cannot support this opinion with facts and figures; it is merely an impression formed from my discussions and observations. Further, a significant advantage of the settlement conference is that it brings forward the point of time at which a case is settled, thus “hardening” the calendar (list) and ensuring that fewer cases are removed from the calendar because of last-minute settlements. The earliest possible settlement of a case is undoubtedly beneficial when settlement itself is possible. It avoids the wastage of time and money occurring when settlement is deferred until the day of the trial, an occurrence all too common both in New South Wales and in the Common Law countries generally.

In the Common Law Division of the Supreme Court of New South Wales a settlement conference of the type found in Los Angeles County does not exist. As from 3 March, 1975, all common law actions in the Supreme Court were listed for a “directions hearing” before a judge of the Supreme Court but, more recently, “directions hearing” have been listed before a Master of the Common Law Division. The hearing for directions is set in train by the Prothonotary who notifies all parties in writing of the date fixed for the directions hearing approximately eight weeks beforehand. I set out elsewhere details of this hearing.²⁴ Upon satisfactory conclusion of the directions hearing a date for final hearing is fixed.

The major purpose of the hearing for directions is the preparation of the case for trial. It is designed to strip the case of all extraneous issues and get to the heart of the matter so that it may be properly and efficiently determined. A subsidiary aim is to encourage the early settlement of cases. Unfortunately, the hearing for directions is standardized and perfunctory, consuming only a few minutes in most cases. The hearings are attended mainly by solicitors who have generally not briefed counsel and are therefore rarely in a position to discuss the issues or negotiate a settlement. It is not surprising that in only a small percentage of cases are terms of settlement filed at the hearing for directions. It is true that the directions hearing ensures that the pleadings are in order, that discovery has taken place and that the parties are ready for trial; in short, it provides the occasion for stock-taking. For this reason the continuation of the directions hearing may be considered justified. However, the directions hearing cannot be regarded as effective in producing settlements.

If settlement conferences were to be introduced in New South Wales it would be necessary, first, to appoint a suitable person to preside at the conferences and, second, to appoint a special day and time for the conference at which the presence of counsel would be required. Both of these matters present problems.

In respect of the first matter there seem to be two schools of thought. One asserts that the presence of a judge at a settlement conference is absolutely essential because his status gives him the “clout” necessary to encourage settlements. The other school of thought says that active participation by a judge in settlement negotiations is a departure from his judicial function. The overwhelming body of professional opinion in New South Wales would surely adopt the latter point of view. To have a judge preside at such a conference runs contrary to the fundamental principle that a judge is not a conciliator and should not be put in the position of usurping the proper function of counsel, whose duty is to advise his client as to the most appropriate course of action. It is not for a judge to say what decision a party ought to make.

In my view the appointment of a Master to conduct settlement negotiations could be an effective compromise. He does not have the standing of a judge, and a Master’s involvement in settlement discussions should be generally acceptable to the profession, particularly as the negotiations can have no bearing on the trial, which must be heard by a judge. Further, a Master’s experience and status would give his opinions some weight and he could well be instrumental in encouraging settlement. In the United States, judicial officers of comparable stature preside at pre-trial or settlement conferences. The Magistrates Act gives the United States District Court the authority to establish rules. Pursuant to that legislation United States magistrates may be assigned such duties as are not inconsistent with the Constitution and laws of the United States. These additional duties specifically include assistance to a District Judge in the conduct of pre-trial or settlement hearings. The United States magistrates have been very effective in this area.²⁵

The second matter concerns the time and expense involved in a special settlement conference. The problem stems from the division of the profession into barristers and solicitors. It is my view that representation of the parties at the settlement conference would rarely be undertaken by solicitors, so barristers would be drawn into the process. At the conference the case would have to be sufficiently prepared for a full assessment of liability and quantum to be made. Counsel would therefore have to be fully briefed and an appropriate scale fee paid to solicitors and counsel. It follows that to hold a settlement conference in every case would be out of the question. A settlement conference is an extra step in pre-trial procedure, the expense of which would have to be offset by a high percentage of the settlement conferences being successful, but that result is by no means assured.

At the opposite extreme, it would be inappropriate to set up machinery for a voluntary settlement conference only; experience shows that mere exhortation is not enough. Undoubtedly, the economic utility of the settlement conference in the United States is closely related to the fusion of the two branches of the profession. Admission to practice entitles a lawyer to perform every function associated with legal representation, from interviewing and advising a client to appearance at trial or hearing and upon appeal. It is rare for one attorney to engage another to conduct a trial or hearing and it requires the consent of the client, who ordinarily expects that the attorney he has engaged will conduct the case personally at all stages. Moreover, unlike lawyers in New South Wales, American lawyers often work on the basis of a contingency fee which usually does not relate to the amount of work done but to the amount received, whether on settlement or after trial. For these reasons the problem of legal costs in pre-trial procedure seems less significant in the American legal system.

My recommendation is that a settlement conference should be an important adjunct to a pre-trial conference²⁶ and not a proceeding in its own right. As noted above,²⁷ approximately 60 per cent of cases in the Common Law Division of the Supreme Court are set down to last one day or less. Most of these cases are running-down cases. Of the remainder, approximately 20 per cent are set down to last two days or less and those cases expected to last three days or more constitute no more than 20 per cent of all cases. My recommendation is that a pre-trial/settlement conference be scheduled for those cases set down to last three days or more. If successful in those cases, I suggest that the experiment be extended to those expected to last two days or more. There may well be other situations where, following discussion between the Master and the parties’ legal representatives at the directions hearing, the Master considers a pre-trial/settlement conference desirable. However, scheduling pre-trial/settlement conferences as a matter of routine for those cases set down to last one day or less would involve a waste of time and money.

I stress that the conference, though primarily designed to narrow the issues for trial, must aim at settling the case, if at all possible. There is no better time for the consideration of settlement than the pre-trial conference. An effective pre-trial conference exposes counsel to the fundamental strengths and weaknesses of each case and counsel are thus better able to evaluate the case in terms of settlement figures. It is not enough for the Master to ask counsel whether or not there have been negotiations towards settlement and leave it at that. Wherever possible, the chances of settlement should be explored in depth. At present two methods are used to resolve civil disputes - settlement and adjudication. There is a need to introduce conciliation as a third method for the resolution of disputes. The value of conciliation is that it enables a third party, who is independent of the other two parties, to encourage the parties to settle the case. Most cases are settled and an increase in the present proportion of settlements by only a small percentage would greatly reduce the delay in disposing of those cases which finally reach the court.

Footnotes

21. Section 9(d), as amended, effective 1 January, 1974.

22. Heading III.

23. Information about ... Los Angeles Superior Court, (1 August, 1974) p. 11.

24. Heading III, pp. 15 -16.

25. See generally Naythons, “The Civil Settlement Conference”, 9 Forum (1973) p. 75.

26. See Heading III.

27. Id. p. 17.