Early Neutral Evaluation (Evaluation)of timeshare and timeshare related claims

Early Neutral Evaluation (Evaluation) of Timeshare and Timeshare related claims

 

Evaluation is a non-binding form of an alternative dispute resolution service involves an early appraisal by a neutral judge, (retired or otherwise) or senior Counsel. They can hear each party's submissions then give their view on the likely outcome, should the case proceed to trial.

The views given will be without prejudice are importantly non-binding.

Early participation in neutral evaluation can give each side the opportunity to considers their own case its faults and strengths and likewise, that of their opponents

Each party and their representative are required to engage in the process in ‘good faith’ and for the purpose of trying to resolve the disputes, as these components will only assist the litigants to settle their case and lessen the costs.

Early neutral evaluation has become increasingly popular in recent years and is now encouraged in the English courts by way of the Civil Procedure Rules 3.1(2)(m) which provides "the court may take any other step or make any other order for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation with the aim of helping the parties settle the case".

Evaluation may be used as part of a series of dispute resolution processes, such as in a tiered dispute resolution clause followed by mediation or as a stand-alone process

Your evaluator can assist by way of an authoritative (albeit provisional) view of the issues they are asked to consider and it can be tailor made to ensure that the ‘heart of the case’ is explored and evaluated on the strength of the evidence available, This evaluation may then be used as the basis for later settlement negotiations.

The evaluation can explore a variety of combinations of legal, evidential, factual or technical questions and on without prejudice basis which means what is said by one party cannot be used later by the other in any later proceedings (with very limited exceptions).

Where best to employ evaluation is;

  • When parties have reached an impasse on either a particular issue of or selection of issues.
  • Breaking a deadlock.
  • Reduction of disparity between the parties.
  • Focusing the minds and narrow the gap.

Advantages of early evaluation are;

  • Highlighting whilst clarifying the issues
  • Its faster than more traditional forms of dispute resolution;
  • identification of the gaps in the evidence and the risks involved in pursuing litigation
  • Encouraging parties to move to a more realistic negotiating position.

Disadvantages are:

Early evaluation can assist a party to become more entrenched should a positive evaluation of their case be delivered. Conversely, the other party may find their negotiating position significantly impaired.

The process can be expensive and time-consuming, should settlement not be achieved.

The evaluation may become impaired due to shortness of time and the informality to deal with complex technical or factual issues.

Other considerations

Early evaluation is a voluntary process and all parties must agree.

  • The parties are free to determine the process, the identity of the evaluator and the venue.
  • If the parties wish, they may agree that the evaluation is to be binding and not without prejudice, but the opposite is more usually the case.
  • Where evaluation is conducted through the courts, there is no "evaluator fee" as such, but certain mandatory court fees will be incurred by the parties.
  • These currently stand at a few hundred pounds and will usually be shared equally between the parties.
  • Parties also usually agree to bear their own costs of the process, although the costs of the paid will ultimately be claimed in "costs in the case" should a settlement not be achieved.

Entering into an ENE agreement

Once the identity of the evaluator has been agreed, the evaluator is required to enter into an agreement and this agreement should set out

  • how the evaluation will be conducted;
  • what is expected of the evaluator and;
  • how his evaluation should be delivered;
  • As it will also serve as the parties' instructions to the evaluator, it should set out clearly
  • what is expected of the evaluator;
  • whether the evaluator is expected to give a reasoned or "bare bones" opinion;
  • whether the scope of the evaluation must be limited to information provided by the parties, or whether the evaluator may consider other matters, or request additional information from the parties, orally or in writing;
  • whether the evaluator may obtain independent advice, and if so whether he will provide a copy of the advice to the parties so that they may also have an opportunity to comment on it;
  • whether the parties are permitted to ask questions or seek clarification once the evaluation has been issued;
  • the extent to which the evaluator will have immunity from suit should evaluation fail.
  • IF the evaluation statement is confidential, privileged and/or given on a without prejudice basis or privilege and confidentiality is waived and
  • how the evaluator's fees and parties' costs are to be dealt with

Procedure

As with the identity of the evaluator, the parties have discretion in determining the procedure for the process. How much of the procedure the parties wish to set will depend on the facts of the dispute, but in general, parties may agree either the evaluator is to determine the procedure or that the parties are to determine some or all of the procedure themselves.

If the parties want to set some or all of the procedure themselves, they should agree this at an early stage of discussions, as the agreed procedure should be recited in full in the agreement. Where the parties have agreed some or all of the procedure, they should ensure that the proposed evaluator is willing to conduct the process under their agreed terms.

What procedural matters need to be considered?

The parties may specify any element of the procedure, but as a minimum should consider the following: -

  • The provision of a case summary prepared jointly or by one party
  • how many submissions each party may make
  • an opportunity for a discussion
  • whether evaluations are by way of a hearing, or written submissions and documentary evidence.
  • whether the parties will have an opportunity to present their evidence and make submissions, and any oral examination of witnesses
  • what documents the parties are expected to provide a core bundle may be preferable
  • limit the number or length of supporting document
  • whether the parties are to be represented or assisted at any hearing
  • the maximum duration of any hearing.

When discussing procedural matters, the parties should aim to resolve disputes in a timely and cost-effective manner.

Costs

These fees are generally shared and vary but typically are charged at hourly rates of between £325 and £800 per hour.

Subject to agreement, the evaluation does not take the form of a binding judgment, even where the process has taken place in a court with a judge serving as evaluator for the parties. Rather, the evaluation amounts to the preliminary opinion of the evaluator on the issue, or issues, in dispute and the likely outcome were the dispute to proceed to trial.

Parties may often also make a Part 36 or "Calderbank" offer or vary any that have already been made at this time.

1.Seals and another -v- Williams [2015] EWHC 1829 (Ch).

2.It is arguable - as is the case with other forms of ADR, such as mediation (see Dunnett -v- Railtrack Plc [2002] EWCA Civ 303) - that an unreasonable refusal to undertake ENE may lead to adverse costs sanction or an ADR order from the Court. Accordingly, a suggestion of ENE by the opposing party should not be dismissed out of hand but should be given careful consideration.

3.Paragraph (18.11-12)18.8 Chancery Guide.