by Mike Dover

Created on: July 11, 2011   Last Updated: July 12, 2011

Early neutral evaluation involves the use of a neutral third party evaluator to assess the strengths and weaknesses of the positions of each party to a dispute. Early neutral evaluation is a type of alternative dispute resolution (ADR). ADR is the use of alternative procedures to resolve disputes without the necessity of a court trial. The US federal courts and most state courts utilize ADR procedures to assist parties in settling their disputes without judicial intervention. 

Early neutral evaluation may be either court ordered or voluntary. The process of early neutral evaluation is similar regardless of whether it is conducted by court order or by agreement. The process begins with the appointment of an evaluator. The evaluator is usually an experienced attorney with substantial experience in the subject matter involved in the dispute. 

The evaluator conducts an informal meeting with the parties and their attorneys. At the meeting, each side presents its evidence and legal arguments to the evaluator and the opposing side. The evaluator helps the parties identify areas of agreement and focus the issues that remain for resolution. 

After hearing each party’s evidence and legal arguments, the evaluator prepares a written evaluation of the likely outcome of each party’s claims and defenses and an estimate of the damages that may be recovered. The written evaluation is confidential and may not be introduced into evidence at trial in the event that the case does not settle.  

Once the evaluator has prepared a written evaluation of the case, the evaluator presents the written evaluation to the parties. At this point, the evaluator’s role may become similar to a mediator. The evaluator may set another meeting with the parties to discuss the evaluation and to provide the parties with an opportunity for settlement negotiations. The evaluator may meet with parties, jointly or separately, to assist the parties in finding common ground for settlement. 

Alternatively, if settlement appears unlikely, the evaluator may assist the parties in narrowing the issues for trial and in identifying issues for which additional discovery may be needed. This function can be useful in helping the parties avoid additional costs involved in conducting unnecessary discovery or litigating undisputed facts or issues. 

Early neutral evaluation is a useful ADR technique to help litigants assess the strengths and weaknesses of their respective cases. Early neutral evaluation can provide a “reality check” for litigants that can result in substantial reduction in litigation costs and expenses by providing guidance as to whether to settle or litigate a case.

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