Dispute Resolution Reference Guide

Neutral Evaluation

Dispute Resolution Series
Practice Module 5
Produced by Dispute Prevention and Resolution Services
Department of Justice, Canada

I. WHAT IS A NEUTRAL EVALUATION?

Neutral Evaluation ^[1] is a dispute resolution technique - at mid-point between mediation and binding adjudication - that can stand on its own or be integrated with other dispute resolution processes such as mediation.^[2] Neutral Evaluation is a process in which the parties or their counsel present their cases to a neutral third party (usually an experienced and respected lawyer^[3] with expertise in the substantive area of the dispute) who renders a non-binding reasoned evaluation on the merit of the case. This process combines features of both a decision-making and a non-decision-making process. During the process, the neutral may be invited to serve as mediator or facilitator.

The overriding purpose of Neutral Evaluation is to make litigation less expensive for parties by reducing pre-trial costs and enhancing pre-trial practice. Neutral Evaluation attempts to avoid some of the pitfalls of litigation, such as the failure of lawyers and clients to assess their cases early, the uncommunicative pleadings and unnecessary or unfocused discovery, which lead to unnecessary costs and delays.^[4] While Neutral Evaluation may include settlement discussions, its broader purpose is to contribute to both the case development and the settlement process.

Neutral Evaluation was originally conceived as a case management tool. It was designed to provide the parties with an early, efficient and meaningful opportunity to communicate about their dispute; to move them and counsel to meet early to clarify issues and identify areas of agreement; and to assess realistically the relative strengths and weaknesses of their positions, thus encouraging, early settlements.^[5]

Neutral Evaluation may be court-connected or be undertaken in a private setting through voluntary arrangements between the parties. In Canada, Neutral Evaluation is being used, on a limited basis, as a private process, although it is sometimes used in conjunction with court dispute resolution programs.

Neutral Evaluation may be initiated at any time in the life of the dispute although an assessment of the case early in the process is often preferable. In principle, when it is court-annexed, Neutral Evaluation does not begin until a lawsuit is filed, while in a private context, it may be triggered as soon as a deadlock arises in connection with the dispute. At that stage, if the applicable agreement provides it, the parties may start the Neutral Evaluation process. Even if Neutral Evaluation was not specifically provided for in an agreement, the parties may still be able to agree to commence the process.^[7]

The central feature of Neutral Evaluation involves an informal, confidential, impartial and brief evaluation session of a dispute that may take place at any time, but preferably as early in the dispute as possible. The evaluation session is divided into four major segments: case presentations, focusing, assessment/valuation, and settlement exploration, all of which are detailed further in the following pages.

II. CHARACTERISTICS OF A NEUTRAL EVALUATION

Neutral Evaluation is:

Voluntary: It is non-binding on the parties: they are free to accept or reject the outcome of the Neutral Evaluation. They must expressly agree to attempt settlement through the Neutral Evaluation process and may withdraw from the process at any given time.

Informal: There are no fixed evidentiary or procedural rules governing the process. Rather, the parties decide on the governing rules that may be set out in writing in the Neutral Evaluation agreement. This is a flexible process as its scope can be shaped by the neutral evaluator and/or the parties according, for example, to the type of dispute, complexity of the case and number of parties involved.

Confidential: Neutral Evaluation is generally a confidential process, unless the parties agree otherwise. The parties should jointly establish the extent of confidentiality in a confidentiality agreement or via a clause in the Neutral Evaluation agreement. Notwithstanding a confidentiality clause or agreement, when the federal government is a party, the Access to Information Act and Privacy Act must be examined to determine the extent to which they restrict disclosure and withholding of information. For further information about the application of these Acts, please refer to the document entitled “Confidentiality: Access to Information Act and Privacy Act” contained in this Reference Guide.

Assisted: The neutral evaluator's role is that of an impartial third party who helps the parties identify the main issues in dispute, discusses the strengths and weaknesses of the parties' arguments, assesses the merits of the claims and renders an opinion on the likely outcome of the case in court. Whenever possible, the neutral evaluator helps the parties explore the possibility of a mutually acceptable settlement and may be invited to serve as mediator or facilitator.

III. HOW TO USE NEUTRAL EVALUATION

A. OBJECTIVE OF A NEUTRAL EVALUATION

The primary purpose of Neutral Evaluation is to reduce litigation costs by promoting forthright communication between the parties and providing an early, realistic assessment of their case. It may also include discussions about the possibility of early settlement. In short, the aim of the process is generally to kick start the dispute resolution process.^[8]

Neutral Evaluation is designed to enhance pre-trial practice by^[9]:

Encouraging each party and counsel to analyse their situations as early as possible;
Offering the parties an early opportunity to communicate directly about the case and to exchange relevant information;
Helping the parties isolate the core issues of the dispute;
Enabling parties to develop a discovery approach that focuses early on key issues and disclosure of key evidence, and at less expense;
Providing each party and counsel with an early opportunity to present their positions and hear the other side present its case;
Offering counsel and parties a brief, impartial, confidential and objective assessment of the relative strengths and weaknesses of their positions and the overall value of the case at an early stage in its evolution;
Providing the parties with an early opportunity to negotiate settlement with the help of a skilled neutral evaluator, who is an expert in the substantive area of the dispute.

When the parties are reluctant to engage in anything but traditional means of dispute resolution such as litigation, Neutral Evaluation can be used to help move them towards settlement or other alternatives. Indeed, Neutral Evaluation provides a neutral setting where parties who might not otherwise be amenable to DR can ponder the various possibilities. Clearly, the objective assessment made by the neutral evaluator forces all counsel and parties to confront their respective position at an early stage. The evaluation is most effective if undertaken before adversarial attitudes become entrenched, which blind the parties to the opportunities of settlement. It may also refocus the parties when other strategies were unsuccessful.^[10] Neutral Evaluation provides the parties with a clearer idea of the core issues in dispute; from there they can concentrate on serious negotiations without wasting time and money on peripheral issues.^[11]

While this rights-based process is suitable for many different types of litigation,^[12] experience has shown the process to be best suited to straightforward disputes where obvious, clear-cut differences exist between the parties.^[13] Neutral Evaluation will be a valuable aid to settlement for parties having substantially differing expectations of the outcome of the litigation. For cases involving simple legal principles, Neutral Evaluation may be useful by providing dollar valuations of a claim whereas in complex cases, the benefit may result in narrowing issues or the suggestion of creative strategies. Neutral Evaluation is especially effective when the parties have reached an impasse on technical or scientific issues where the neutral evaluator has such expertise.^[14]

The following questions could be important to consider in determining the suitability of Neutral Evaluation:^[15]

Are there really only a few issues at stake?
Can the factual and/or legal issues be concisely presented?
Are the factual issues dependent on the parties' differing opinions or on the credibility of witnesses?
Are the parties being unrealistic regarding the outcome of the case?
Are the parties (emotionally) inseparable from the issues of the dispute?
Will the evaluation polarise to a greater extent the already existing distance between the parties?
Is the issue of law relatively settled or in flux?
Are there only a few parties?
Will the evaluation help foster an early settlement or rather, increase costs after trial?

B. THE PROCESS

i) Choosing the Neutral Evaluator

There is no set rule for choosing a neutral evaluator. In Canada, the flexible nature of the Neutral Evaluation process enables the parties to creatively select a neutral according to the nature of their case, its complexity and the parties goals.^[16] In choosing a neutral evaluator, the parties should apply the following basic criteria: impartiality, a reputation for good judgement and fairness, experience in litigation, and to the greatest extent possible, expertise in the subject area of the dispute.

Nothing is more critical to the success of a Neutral Evaluation than the overall quality of the neutral evaluator. That is to say that the choice of a neutral evaluator should not be made on the basis of subject expertise alone.^[17] The actual practice is to choose an experienced and respected lawyer who is knowledgeable in the subject area of dispute. However, the neutral evaluator does not have to be a lawyer: depending on the circumstances of the case, the parties may, instead, appoint an expert in a technical area who would be able to quickly grasp the issues and craft practical solutions.^[18]

The flexibility of the process offers an opportunity to choose more than a single neutral evaluator, if needed in specific circumstances. If settlement is considered and is to be included in the process, it is also important that the neutral evaluator be familiar and skilled with a number of DR techniques, in order to efficiently direct the parties to further settlement negotiations.

For any assistance concerning the selection of a neutral evaluator, the Research and Statistics Section of the Department of Justice has prepared a directory called the Directory of Dispute Resolution Neutrals (the Directory). The Directory has been prepared to assist the Department and other federal departments and agencies in selecting DR neutrals such as mediators, arbitrators or neutral experts. The individuals listed in the Directory are not in any way related to or affiliated with the federal government of Canada or the Department of Justice. The Directory is available electronically through the Text Workbench.

ii) Preparation for Neutral Evaluation

There is no rigid format to be followed at this stage. Generally, at a reasonable time before the date of the evaluation session scheduled by the neutral and/or the parties, each party provides to the neutral evaluator and the other party(ies), a concise written Evaluation Statement of the issue, outlining the facts, expert reports, the relevant law and argument on which each party relies as well as excerpts of the pertinent cases.^[19] The parties are permitted to include any document that might help them in achieving the ends of the Neutral Evaluation session. The Statement should indicate who will be attending the evaluation session, so as to facilitate the notification of all parties if a problem is to arise^[20]. Since Neutral Evaluations in Canada are not covered by court rules, an agreement between the parties concerning confidentiality would be strongly recommended, unless the parties agree otherwise.

Thorough preparation before the evaluation session is key to a favourable outcome: parties must be prepared to provide the neutral evaluator and the other party(ies) with all the necessary information in order to ensure that an accurate evaluation can be made.^[21] Upon receiving the parties' Evaluation Statements, the neutral evaluator will have to review them and carry out any legal or technical research necessary to provide an accurate preliminary analysis of each party's contentions.

The neutral evaluator, and/or the parties, taking into account the particular circumstances of the case (readiness to settle, sufficient exchange of information or differing interests between parties and counsel, etc.), will have scheduled a convenient time and place for the Neutral Evaluation session, with the parties and their lawyers. The session would preferably take place on neutral territory.

iii) The Neutral Evaluation Session

The Neutral Evaluation session generally begins with opening remarks from the neutral evaluator, explaining the purposes of the session and his or her role, outlining the basic ground rules to be followed, and describing and emphasizing on the important characteristics of the process such as its informality, confidentiality or privacy, etc. The neutral evaluator will have read the Statements and will be familiar with the dealings between the parties up to this point.^[22]

The major components of the session consist in:

a) Case presentations:

Each party^[23], in the presence of the other party who is not permitted to interrupt or comment, briefly presents an oral summary (duration of which is usually to be decided in advance by the parties, in their agreement) of the factual and legal basis of its position, including relevant available evidence, if any^[24]. The neutral evaluator may interrupt to ask questions.

b) Focusing:

After hearing the presentations, the neutral evaluator attempts to encourage consensus by helping the parties focus their cases and by assisting them in identifying areas of substantial or possible agreement, in order to narrow the scope of the dispute ^[25]. The neutral evaluator may also bring to the parties' attention legal issues or unknown facts that they had not considered.^[26]

c) Assessment/Valuation:

After probing the support for differing views of the facts, the neutral evaluator generally retires to a private room to prepare his or her objective and impartial assessment of the relative strengths and weaknesses of key evidence and arguments presented by the parties, usually in writing.^[27] The analysis will include, where needed, the likelihood of liability and the probable range of damages, with all necessary explanations. Note that the assessment is intended to reflect judgement value and not settlement value^[28]. Most importantly, the evaluation should explain the thought process that led the neutral evaluator to it, in order to leave no doubt as to the basis upon which the opinion was provided^[29].

d) Settlement Exploration:

Once the assessment has been rendered, the neutral evaluator may suggest to the parties the possibility of discussing settlement (and may recommend, if necessary, follow-up meetings). Settlement discussions may flow from a written agreement reached by the parties prior to the evaluation session or from the parties' verbal decision to explore settlement at this point. If the parties are agreeable to pursuing settlement, the neutral evaluator could creatively choose one of many different approaches or any format agreeable to the parties and him or her^[30]. Should a settlement not materialize or if the parties are simply not interested in such discussions at this point, the neutral evaluator may recommend some other DR alternative, such as arbitration, etc^[31]. or help the parties prepare efficiently for a more expeditious trial.

C. THE ROLE OF THE NEUTRAL EVALUATOR

The neutral evaluator will^[32]:

Permit the parties with or without counsel to make an oral presentation of their positions regarding the dispute;
Help and direct parties to search for common ground and narrow the scope of the dispute;
Introduce new ideas or a fresh perspective to the dispute and search for or propose alternative solutions;
Assess the relative strengths and weaknesses of the parties' positions, explaining the reasons of his or her assessment and estimate, where possible, the likelihood of liability and the verdict range of damages;
Suggest and help the parties explore the possibility of a settlement.

D. THE ROLE OF THE COUNSEL^[33]

Since cases referred to Neutral Evaluation often involve significant legal issues, lawyers play an important role (similar to the role they would play in more structured processes) in the process^[34]. The presence of lawyers is advisable as they:

Advise their client if and when and before whom to engage in an evaluation;
Craft the issues to be submitted;
Prepare their clients for various negotiation strategies;
Prepare and possibly present oral and written submissions to the neutral evaluator;
Make good use of their advocacy skills in order to achieve the best results for their client^[35].

In short, the lawyer is the one who summarizes the factual issues and legal arguments supporting his or her client's case and who ideally uses the resulting evaluation to move the parties further into negotiation and toward settlement.

IV. ADVANTAGES OF THE NEUTRAL EVALUATION

Neutral Evaluation provides an opportunity for early, open and direct communication, enabling parties to focus on the core issues in dispute. The process motivates counsel and parties to concentrate on the case earlier than usual and enables them to increase their understanding of the issues while learning what their opponent's case really is all about.^[36]

Neutral Evaluation is especially useful when the parties need or desire to maintain an ongoing relationship: it allows the parties to avoid the adversarial elements of litigation which often make it difficult to continue a productive relationship.

The process is non-binding. There is no risk of obtaining an unfavourable adjudication of one's case.

Neutral Evaluation is an informal, flexible and creative tool of dispute resolution which is not governed by strict rules of procedure and evidence. This allows the parties to design a process which can be moulded to suit their needs and encourages a consensual rather than an adversarial approach.

Neutral Evaluation is confidential (unless agreed otherwise by the parties), subject to the application of the Access to Information Act and of the Privacy Act when the federal government is a party. The process is appropriate when confidentiality is considered important or necessary to the parties, which is often the case: parties utilizing DR processes usually do so on the basis that they can discuss matters freely in the expectation that they will be disclosed, neither publicly, nor to a court.^[37]

Neutral Evaluation may generally reduce litigation costs : this is of importance both to corporate parties who wish to keep costs down and to parties who otherwise might not be able to afford the cost of litigation. The costs of the process or compensation given to the neutral evaluator are generally borne equally by all parties, providing all parties with an equal stake in the outcome and an equal sense of ownership.

Neutral Evaluation is widely applicable to civil cases of varying types and complexity. It is a valuable aid to settlement in straightforward disputes where there is only a few clearly stated issues or where greatly differing expectations of the outcome are present. It can be especially effective when the parties have reached impasse on technical or scientific issues where the neutral evaluator has such expertise.

The presence of a third-party neutral allows for a controlled and impartial process which may help the parties recognize the limitations of their cases and favors a prompt, early settlement. The presence of the neutral evaluator can even introduce a fresh and creative perspective to the litigation, helping the parties to search for alternative solutions.^[38]

Neutral Evaluation may assist in de-personalizing an issue by giving clients an opportunity for catharsis, thus removing a sometime major obstacle to productive settlement discussions. It can also assist in tempering unrealistic expectations of the outcome.^[39] The neutral evaluator's objective and impartial assessment serves as a “reality check” for the parties and their lawyers, bringing frivolous matters to an end or fundamentally altering their expectations. It brings to the negotiation table serious and realistic offers (or dismissal of claims) that may eventually result in an early settlement.^[40]

Used as a gatekeeper for other dispute resolution processes, Neutral Evaluation can diminish the risk of not choosing the DR process that is best suited for a particular dispute. Neutral Evaluation provides the parties with the possibility of exploring all the appropriate DR options after the dispute has arisen without restricting any party in advance to any inappropriate option. It is a safe harbor within which parties who might not otherwise be amenable to DR can ponder the possibilities.^[41]

V. DISADVANTAGES OF THE NEUTRAL EVALUATION

The Neutral Evaluation process can be perceived as adding an additional step or layer before getting to court and thus postponing the eventual trial.
There is concern about possible duplication between Neutral Evaluation and other case management or DR processes.^[42]
Possible overall added costs to litigation if the process does not produce settlement or if the process is pursued in bad faith.
Procedural safeguards are limited: abbreviated discovery and presentation may produce an inequitable outcome.^[43]
Neutral Evaluation may be vulnerable to manipulation as it may be used to preview a counterpart's case; or else, if pursued in bad faith (when a defendant agrees to the process, but does not frankly cooperate), it may also be used as a dilatory tactic.^[44]

Since Neutral Evaluation is a non-binding dispute resolution process, it cannot produce legal precedents.

^[1] The literature refers both to “Neutral Evaluation” and “Early Neutral Evaluation” without distinction. For the purpose of this document, the expression “Neutral Evaluation” will be used since this process may be initiated at any time during the life of a dispute.
^[2] Genevieve A. Chornenki; Christine E. Hart, Bypass Court: a dispute resolution handbook, Toronto and Vancouver: Butterworths Canada Ltd., 1996, p. 131; at the Toronto ADR Centre, only a small percentage of cases employ this technique as a distinct phase. Evaluation becomes rather blurred with the mediation process unless a specific evaluation is jointly requested by the parties: Hon. J. George W. Adams; Christine E. Hart, Alternative Dispute Resolution Practice Manual, North York: CCH Canadian Ltd., 1996, p. 4498.
^[3] Judges can be considered to be experts in the law generally, but some disputes require specific legal expertise (e.g. Securities law); also, some courts (e.g. San Francisco Superior Court) utilize two attorneys in lieu of one only: Jay Folberg; Joshua Rosenberg; Robert Barrett, “Use of ADR in California Courts: Findings & Proposals”, San Francisco: University of San Francisco Law Review, 1992, v. 26, p. 362. In circumstances where technical knowledge is key, the evaluator may preferably be a well regarded expert in the subject matter of the dispute.
^[4] Erika S. Fine; Elizabeth S. Plapinger, ADR and the Courts: A manual for Judges and Lawyers, (CPR Legal Program), New York: Butterworth Legal Publishers, 1987, (Summary) p. 163.
^[5] See Genevieve A. Chornenki; Christine E. Hart, supra, note 1, p. 132; and also, Lee Axon; Robert G. Hann, “Court Dispute Resolution Processes: The Application of ADR in the Courts”, Working document, Robert Hann & Associates Ltd., 1994, p. 24.
^[6] Richard H. McLaren; John P. Sanderson, Innovative Dispute Resolution - The Alternative, Toronto: Carswell (Thomson Canada Ltd.), 1994, p. 3-1.
^[7] Theodore H. Hellmuth, “Commentary - Using Neutral Evaluation As a Gatekeeper Dispute Resolution Process”, in Alternatives to the High Costs of Litigation, New York: CPR Institute for Dispute Resolution, Vol. 13, No8, (August) 1995, p. 99.
^[8] See Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-2.
^[9] Elizabeth S. Plapinger; Margaret L. Shaw; Donna Stienstra, Judge's deskbook on court ADR (National ADR Institute for Federal Judges), New York: CPR Judicial Project, 1993, pp. 13-14; see also, Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, pp. 166-167.
^[10] See Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-2.
^[11] Id.
^[12] For example, disputes involving varying types of cases such as contract, product liability, securities, labor and employment, personal injury, fraud, antitrust, banking, environmental, copyright, patent, trademark, etc.: see Elizabeth S. Plapinger; Margaret L. Shaw; Donna Stienstra, supra, note 9, p. 15.
^[13] See Richard H. McLaren; John P. Sanderson, supra, note 6, p.3-2.
^[14] Guidance on the use of ADR for litigation in the federal courts, Washington: The Department of Justice (Civil Division), 1992, p. 8.
^[15] All questions are approximate excerpts mainly taken out of Genevieve A. Chornenki; Christine E. Hart, supra, note 2, p. 134.
^[16] As an example, if the parties are used to dealing with the court system and feel uncomfortable with DR processes, they could still select a retired judge or a well-known lawyer to act as a neutral evaluator: see Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-9.
^[17] See Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 177; also: Genevieve Chornenki; Christine E. Hart, supra, note 2, p. 141; and, Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-10.
^[18] Advisory Opinion is another informative, non-binding DR process that could be used for cases where a value, quantum or price has to be determined by an expert in a technical area or where a specific legal issue needs to be clarified by a lawyer or a judge.
^[19] See Genevieve Chornenki; Christine E. Hart, supra, note 2, p. 142.
^[20] Evaluation Statements required by “private” evaluators usually follow the same format as the courts.
^[21] Example: (1) identify any legal or factual issues whose early resolution might narrow the scope of the dispute or contribute to the productivity of settlement discussions; and (2) suggest which discovery will contribute most effectively to expediting case preparation: see Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 170.
^[22] See Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 171; Elizabeth S. Plapinger; Margaret L. Shaw; Donna Stienstra, supra, note 9, p. 14; and also, Richard H. McLaren; John P.Sanderson, supra, note 6, p. 3-5.
^[23] Parties with settlement authority must be present at the evaluation session, accompanied or not by the lawyer primarily responsible for handling the case: see Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 171.
^[24] The parties or their lawyers could make the case presentation: see Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-6.
^[25] Hilary Astor; Christine M. Chinkin, Dispute Resolution in Australia, Butterworths (Australia) Ltd., 1992, p. 170.
^[26] See Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-7.
^[27] See Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 172; the convened session typically lasts about two hours, but duration varies according to various factors, such as the complexity of the case, etc.
^[28] See Elizabeth S. Plapinger; Margaret L. Shaw; Donna Stienstra, supra, note 9, p. 15.
^[29] The assessment is often clear for the lawyers, but not for the parties: see Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-7.
^[30] For example, it seems that Neutral Evaluation combines naturally with mediation: Ibid
^[31] Ibid., pp. 3-7 to 3-9.
^[32] Excerpts are partly taken from: Edward J. Dauber, “Submission of Executive Assistant Attorney General Edward J. Dauber and the New Jersey Attorney General's Office for the CPR Legal Program Award”, Trenton (NJ): Office of the Attorney General, 1992, pp. 14-15.
^[33] In a private setting, parties themselves may play a major role in their dispute, according to the type of case at stake, etc. And since they might often design the Neutral Evaluation procedure themselves, they may also well decide what their role in it will be: see Genevieve A. Chornenki; Christine E. Hart, supra, note 2, p. 137.
^[34] See Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-9.
^[35] See Genevieve A. Chornenki; Christine E. Hart, supra, note 2, p. 137; note that the lawyers' role also includes drafting and reviewing settlement agreements.
^[36] See Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 175.
^[37] See Richard H. McLaren; John P. Sanderson, supra, note 6, p. 3-3.
^[38] Ibid., p. 3-2.
^[39] See Genevieve A. Chornenki; Christine E. Hart, supra, note 2, p. 135.
^[40] See Erika S. Fine; Elizabeth S. Plapinger, supra, note 4, p. 175.
^[41] See Theodore H. Hellmuth, supra, note 7, pp. 99-100.
^[42] See Lee Axon; Robert G. Hann, supra, note 5, p. 25.
^[43] Alternatives to litigation: a critical guide, (source unknown), 1990, chap. 3, sub-sec. 3.21, figures 3-1 and 3-2, (pp. 55 to 96).
^[44] Id.
^[45] See the models found in Richard H. McLaren; John P. Sanderson, Innovative Dispute Resolution - The Alternative, supra, note 6, pp. 3-20 and 3-21.
^[46] Or individually.

APPENDIX A: CHECKLIST FOR NEUTRAL

EVALUATION

Have the concerned parties agreed to resolve the matter through Neutral Evaluation?
Is the Neutral Evaluation process appropriate for this particular dispute according to the circumstances of the case?
Are the parties represented by counsel or are they confronting the dispute themselves? If represented by counsel, what will be the counsel's role ?
Are all directly interested parties (to the extent possible) at the table?
Are the parties attending the evaluation session vested with settlement authority?
Have the concerned parties selected a (or more than one) neutral evaluator? In the negative, does the agreement provide a default selection mechanism?
Have all essential elements of the Neutral Evaluation agreement been considered, including:
- a) the issues in dispute;
- b) the procedure to be followed;
- c) the neutral evaluator's role/mandate;
- d) a provision for agreement if the dispute is resolved;
- e) the confidentiality of the process;
- f) a provision for the remuneration of the neutral evaluator;
- g) acknowledgements of responsibility of the neutral evaluator and the parties, respectively;
- h) the date, time and location of the session?
Has any time limit been set for the duration of the procedure, if needed?
Have any special requirements been met (for example, translation or wheelchair accessibility)?
Has disclosure been adequately provided for?
Are there any other alternatives (ex: mediation, arbitration) provided by the agreement in the case of a failure to settle by Neutral Evaluation ?

APPENDIX B: SAMPLE NEUTRAL EVALUATION

AGREEMENT^[45]

BETWEEN

and

1) The parties to the present agreement, agree to refer the following matter(s) to a neutral evaluator, namely: , jointly selected for the present matter(s). If the parties cannot agree on the choice of a neutral evaluator within days from the date of this agreement, a neutral evaluator will be chosen by .
2) [Option] The selected neutral evaluator shall: i) be impartial; ii) have experience in litigation and iii) have expertise in the subject area of the dispute. Subject to the terms of this agreement or any agreement of the parties, the neutral evaluator will be conducting the evaluation procedure in a just and appropriate manner, according to the circumstances.
3) [Option] The parties agree on the following governing procedural rules:
4) The parties and their representatives select the following date, time and place for their initial meeting: .

5) [Option] If the dispute has not been resolved within days of their initial meeting, the parties agree that they will attempt to resolve it through (for example, mediation), no later than days from the written evaluation by the selected neutral evaluator.
6) All information exchanged during the entire procedure(s) and associated with the Neutral Evaluation and (e.g. mediation) processes shall be regarded as “without prejudice” communications for the purpose of settlement negotiations and shall be treated as confidential by the parties and their representatives, unless otherwise required by law. However, evidence that is independently admissible or discoverable shall not be rendered inadmissible or non-discoverable by virtue of its use during the procedure(s).
7) The parties agree that they will be each responsible for the costs of their legal counsel and personal travel. Fees and expenses of the neutral evaluator and all administrative costs of the Neutral Evaluation shall be borne equally by the parties.
8) Either party may terminate the Neutral Evaluation at any given time.
9) Negotiations towards settlement will be undertaken by party representatives who have the authority to settle or who have a mutually acceptable and rapid means of obtaining the requisite authorization.
10) It is agreed that the neutral evaluator will neither represent nor testify on behalf of any of the parties in any subsequent proceeding between the parties. It is further agreed that the personal notes and written opinions of the neutral evaluator made in relation to this Neutral Evaluation may not be used in any subsequent proceeding between the parties.
11) The parties agree that they will indemnify and save harmless the neutral evaluator from all costs, claims, causes of action or proceedings which they have, may now have, or might have in the future, respecting and arising from this Neutral Evaluation.
12) During the course of the Neutral Evaluation, the parties agree to take no new steps in any legal action between them which concerns the same matter as is the subject of this Neutral Evaluation.

Dated:

Counsel(s)^[46] for (the Plaintiff(s))

Counsel(s) for (the Defendant(s))

Witness to:

Witness to:

I, consent to act as a neutral evaluator in accordance with the foregoing agreement.

Date modified:: 2022-08-25

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