Litigation Showcase

The Early Bird Settles The Case: Quick Analysis Can Minimize Exposure

How to evaluate the merits of a dispute before it blows up into litigation.

By Greg Krehel

FOR IN-HOUSE counsel, early dispute resolution can reduce both litigation risk and costs. But to make an early decision, you must be able to intelligently organize and interpret the existing information.

In practical terms, that means you must develop procedures for tracking and analyzing any business problem that has the potential to result in litigation.

It's important to adopt a standard method of analyzing each dispute, and standard reports from that analysis. That way, the results of analysis are easy for everyone to interpret, because they've reviewed the same type of reports before. Standardized work product makes it easy to compare the findings in one matter to the analysis results from other similar disputes

Create four analysis reports for every dispute you monitor: 1. Cast of Characters; 2. Chronology; 3. Issue List; and 4. Question List.

These reports provide a framework for organizing critical knowledge. If multiple people are involved in the analysis process, these reports provide a way to divide responsibility and share results. If the dispute can't be resolved, your analysis reports are of tremendous value when it comes time to educate outside counsel. (The reports to counsel can be used as the basis of an ongoing case reporting mechanism.

As your counsel pursues discovery, they can revise case reports and send you an updated copy at regular intervals, such as quarterly.)

Create your dispute analysis reports using database software, not word processing software. Database software makes the knowledge you're organizing far easier to explore and evaluate. For example, using database software, it's easy to filter your chronology so that it displays only facts that have been evaluated as being particularly troublesome. Rather than viewing a list of hundreds of facts, you can isolate the items that you expect will play an important role in early resolution decision-making.

Analysis reports are tables or spreadsheets of critical information. They're long on knowledge and short on prose. They are tools to use in the organizational process, not a summary created once analysis is complete.

In fact, once you begin to employ these analysis reports, you may find a narrative summary unnecessary. When you write a narrative case summary, a great deal of the total effort must be devoted to working on the style of the report (the outline, phrasing, and grammar). Is the narrative summary adding enough value to justify the hours spent eradicating split infinitives and other grammatical evils?

Here are the details that should be captured in each dispute analysis report:

Cast of Characters

Your "Cast of Characters" should list the individuals and organizations involved in the dispute. Include key documents and other important pieces of physical evidence. Capture each player's name and a description of the role the person, organization, or document plays in the dispute.

Also include a column to assess your evaluation of cast members. Even if you don't evaluate every player, it's essential to note the people and documents that are worrisome, as well as the basis for your concerns. By building the reports using database software, it's easy to filter the list down to the problem players.

Chronology

A chronology of key facts is a critical tool for analyzing any dispute. The very act of codifying the facts clarifies your thinking. As your chronology builds, important factual disputes and areas of strength and weakness become obvious.

As you create the chronology, list the fact, the date on which it occurred, and its source. When you enter a fact into the chronology, make important details about the fact explicit. For example, rather than simply stating "Sue met with Mike," type "Sue met with Mike, and allegedly promised that Mike would keep his job despite the downsizing." Your chronology should be a memory replacement, not a memory jogger.

In the early stages of the dispute, you'll have many facts with only partial date information. For example, you may know that a meeting took place in March of 1998, but be unsure as to the day within March. When you run into this problem, simply substitute a question mark for the portion of the date that's undetermined (e.g., 3/?/99).

Your mission in early dispute analysis is to take a broad look at the potential evidence. Your chronology should be more than a list of undisputed facts. Be sure to include disputed facts and even prospective facts (i.e., facts that you suspect may turn up if the dispute proceeds to trial). Distinguish facts that are undisputed from those that are disputed or merely prospective. Include in your chronology a column that you use for this purpose.

Finally, include a column that you use to capture an evaluation of each fact. Is the fact very good, good, neutral, bad, or very bad? When it comes time to decide how to proceed on the matter, studying the implications of this fact evaluation will be an important component in making your determination.

Issue List

Even when you are analyzing a dispute that has yet to result in a lawsuit, you can anticipate the majority of the claims that would appear in the complaint. Building a list of these legal issues and of any critical factual disputes is another important step in dispute analysis. Include a column that you use to indicate your evaluation of the issue.

Use your "Issue List" to flesh out your "Cast of Characters" and "Chronology." Work through it on an issue-by-issue basis, and make sure that the players and facts that relate to each issue have been included in these other case analysis reports.

Question List

As you organize what is known about a dispute, what you don't know and need to find out becomes clear. An essential part of the dispute analysis process is identifying these unknowns and pursuing their resolution.

When you encounter questions that you can't readily answer, list those on your "Question List."

You'll want your report to include a column for the question and another column in which you can capture notes regarding the answer. Also include a column for evaluating the importance of each question. Use a simple A (extremely critical), B, C, and D scale to make your assessment. Other columns to consider for your Question List include Assigned To and Due Date.

Use this early analysis process on any dispute that may result in litigation, even ones that may not represent a great deal of risk. Why? First, we're all familiar with disputes that appeared minor but turned out to be costly disasters. By analyzing all disputes, including those that seem small, you ensure that you aren't seeing just the tip of the iceberg.

Second, even small matters have more facts, more players, and more issues than anyone can meaningfully organize and evaluate in his or her head.

Third, the practice gained analyzing small disputes makes you more proficient when investigating larger matters.

Finally, the amount of time required to analyze a case is proportionate to its size. If the case is as small as anticipated, it will take little time to do the analysis.

The bottom line?

Early analysis can help you resolve disputes quickly and on the best possible terms.

Greg Krehel is co-founder of the CaseSoft division of DecisionQuest, which produces CaseMap software. He's based in Point Vedra Beach, Fla.