• David Manes

What is Early Neutral Evaluation?

Early Neutral Evaluation (“ENE”) is a type of alternative dispute resolution (“ADR”) used to help resolve a dispute between parties. It does not involve the use of a Court or Judge. ENE is a process in which the parties or their counsel present their cases to a neutral third party (usually an experienced and respected lawyer with expertise in the substantive area of the dispute) who renders a non-binding reasoned evaluation on the merit of the case.

What is the purpose of ENE?

The overriding purpose of ENE is to make litigation less expensive for parties by reducing pre-trial costs and enhancing pre-trial practice. The third-party neutral will give his/her opinion as to the merits of the case, the strengths/weaknesses of each party’s case, what issues each party should be focusing on when doing discovery, what the likelihood of settling would be, etc. The third-party neutral can also give his/her opinion on whom he/she thinks has the better case. Overall, ENE 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.

ENE may be court-connected. For example, the US District Court for the Western District of Pennsylvania requires each party to engage in some form of ADR. One of those options is ENE. ENE can also undertaken in a private setting through voluntary arrangements between the parties.

What are the benefits of ENE?

ENE is voluntary. It is non-binding on the parties. Each party is free to accept or reject the outcome of the ENE.

ENE is 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 ENE agreement.

ENE is confidential. ENE 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 ENE agreement. If the ENE is confidential, anything discussed during the process cannot be used later in a Court of Law.

ENE provides a third-party’s objective input. The third-party neutral’s role is to objectively 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 helps the parties explore the possibility of a mutually acceptable settlement and may be invited to serve as mediator or facilitator.

What are the disadvantages of ENE?

ENE can be perceived as adding an additional step or layer before getting to court and thus postponing the eventual trial.

Possible overall added costs to litigation if the process does not produce settlement or if the process is pursued in bad faith.

If the third-party neutral finds the opposing party’s case considerably favorable, it could result in the opposing side refusing to settle. The third-party neutral’s decision can be devastating to a party’s case.

#ADR #Earlyneutralevaluation #ENE

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