North Carolina Business Litigation Report

"Neutral Evaluation" Is One Of Several Alternatives To Mediation In North Carolina

Mediation often devolves into the mediator shuttling back and forth between two rooms, carrying alternating declining and increasing offers to the parties.

There are times during this ping ponging of offers when I wish the mediator was pushing harder on the other party to explain the absolute rightness of my client's position, inevitably to result in summary judgment in our favor, or explaining to me why my client and I have missed the boat in evaluating the case.  Most mediators won't do that, and dismiss the concept of informing the parties of the mediator's perception of the quality of their case or defense as being unacceptably "evaluative."

I'm prompted to write about this subject based on a one paragraph Order by Judge Tennille earlier this year in Bank of America Corporation v. Beazer Morgage Corp., granting the Joint Motion of the parties to have a "neutral evaluation" instead of a mediation.  

What is a "neutral evaluation?"  In short, it's "a process in which a third party neutral examines the evidence and listens to the disputants' positions, and then gives the parties his or her evaluation of the case."  Here's a good article on the subject, and also the American Arbitration Association's description of the procedure and how it works.  Neutral evaluation apparently led to a settlement of the Beazer case, because the parties filed a joint dismissal with prejudice a few weeks after the evaluation, in which a state court Judge in Georgia served as the neutral.

There is clear approval of alternative resolution procedures to mediation in North Carolina's statute on mediated settlement conferences. N.C. Gen. Stat. Sec. 7A-38.1:

Promotion of other settlement procedures -- Nothing in this section is intended to preclude the use of other dispute resolution methods within the superior court. Parties to a superior court civil action are encouraged to select other available dispute resolution methods. The senior resident superior court judge, at the request of and with the consent of the parties, may order the parties to attend and participate in any other settlement procedure authorized by rules of the Supreme Court or by the local superior court rules, in lieu of attending a mediated settlement conference. Neutral third parties acting pursuant to this section shall be selected and compensated in accordance with such rules or pursuant to agreement of the parties. Nothing in this section shall prohibit the parties from participating in, or the court from ordering, other dispute resolution procedures, including arbitration to the extent authorized under State or federal law.

 Id. at i.

Also, the North Carolina Rules Implementing Statewide Mediated Settlement Conferences in Superior Court Civil Actions contain a specific provision (Rule 10) permitting the parties to request the use of procedures other than mediation, including neutral evaluation (Rule 11), non-binding arbitration (Rule 12), or non-binding summary jury or non-jury trials (Rule 13).  I don't hear much about these alternative procedures being used in North Carolina even though they are specifically allowed by the Rules.

There is no special certification necessary to become a neutral evaluator.  In Mecklenburg County, for example, the Court maintains a list of approved neutrals.  You are qualified to serve if you have five years of experience as "a judge, practicing attorney, law professor, arbitrator or mediator, or have equivalent experience" and you are of "good moral character," and you "adhere to ethical standards."

The cartoon at the top is by Charles Fincher, a lawyer who is also a cartoonist.  His very funny comics and comic strips are what he calls "inside baseball" humor for lawyers.  He has a number of different cartoons and strips, which you can find at lawcomix.com.  The one I used, with his permission, is from a series of one-panel cartoons called Scribble-in-Law

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Mack Sperling
Brooks Pierce, LLP
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Greensboro, NC 27401
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