Any of the following methods, or a combination of these methods, or
any other form of assisted negotiation process to which the parties agree,
may be used to seek a resolution of disputes or other controversy that arise
under Government Code, Chapter 2260. If the parties agree to use an assisted
negotiation procedure, they should agree in writing to a detailed description
of the process, prior to engagement in the process.
(1) Mediation. (See §§1.375-1.384 of this title (relating
to Negotiation and Mediation of Contract Disputes).)
(2) Early evaluation by a third-party neutral.
(A) This is a confidential conference in which the parties
and their counsel present the factual and legal bases of their respective
claims and defenses, and receive a non-binding assessment by an experienced
neutral with subject-matter expertise or with significant experience in the
substantive area of law that governs the dispute.
(B) After summary presentations, the third-party neutral identifies
areas of agreement for possible stipulations, assesses the strengths and weaknesses
of each party's position, and estimates, if possible, the likelihood of liability
and the dollar range of damages that appear reasonable to the neutral.
(C) This is a less complicated procedure than the mini-trial,
which is described in paragraph (4) of this section. This procedure may be
appropriate for only some issues in dispute, such as when clear-cut differences
exist between the parties over the appropriate amount of damages. This process
may be particularly helpful when:
(i) the parties agree that the dispute can be settled;
(ii) the dispute involves specific legal issues;
(iii) the parties disagree on the amount of damages;
(iv) at least one party appears to have an unrealistic view
of the dispute; and
(v) the neutral is a recognized expert in the subject area
or area of law that governs the dispute.
(3) Neutral fact-finding by an expert.
(A) In this process, a neutral third-party expert studies a
particular issue and reports findings on that issue. The process usually occurs
after most discovery in the dispute has been completed and the significance
of particular technical or scientific issues is apparent.
(B) The parties may agree in writing that the fact-finding
will be binding on them in later proceedings and, if appropriate, constitute
a stipulation if the dispute proceeds to a contested case hearing, or that
the fact-finding will be advisory in nature, to be used only in further settlement
discussions among representatives of the parties. This process may be particularly
(i) factual issues that require expert testimony may be dispositive
of liability or damage issues;
(ii) the use of a neutral is cost effective;
(iii) the neutral's findings could narrow factual issues for
a contested case hearing.
(A) A mini-trial is generally a summary proceeding before a
representative of upper management from each party who has authority to settle,
and a third-party neutral whom the parties select. A mini-trial is usually
divided into three phases: a limited information exchange phase, the actual
hearing, and post-hearing settlement discussions. No written or oral statement
that is made during the course of the proceeding may be used as evidence or
as an admission in any other proceeding.
(B) The information exchange stage should be brief, but yet
sufficient for each party to understand and appreciate the key issues that
are involved in the case. At a minimum, the parties should exchange key exhibits,
introductory statements, and a summary of each witness' testimony.
(C) At the hearing, representatives of the parties present
a summary of the anticipated evidence and any legal issues that must be decided
before the case can be resolved. The third-party neutral presides over the
presentation and may question witnesses and counsel, as well as comment on
the arguments and evidence. Each party may agree to conduct abbreviated direct
and cross-examination of witnesses. The hearing should generally take no longer
than one or two days.
(D) Settlement discussions that the third-party neutral facilitates,
occur after the hearing. The parties may ask the neutral to formally evaluate
the evidence and arguments and give an advisory opinion on the issues in the
case. If the parties cannot reach an agreed resolution to the dispute, then
any party may declare the mini-trial to be ended, and proceed to resolve the
dispute by other means.
(E) Mini-trials may be appropriate when:
(i) the dispute is at a stage where substantial costs can be
saved by a resolution that is based on limited information gathering;
(ii) the matter justifies the senior executive time that is
required to complete the process;
(iii) the issues include highly technical and mixed questions
of law and fact;
(iv) the matter involves trade secrets or other confidential
or proprietary information; or
(v) the parties seek to narrow the large number of issues that
are in dispute.