Significant Changes in Case Evaluation Process Effective This Month

The Michigan Supreme Court’s changes to case evaluations, which went into effect on Jan. 1, allow litigants to avoid the case evaluation process by specifying another alternative dispute resolution (ADR) process and other changes.

Case evaluation process before changes

Michigan circuit courts often required civil cases to go through a process called case evaluation. The procedure helped determine the monetary value of the case and identified matters which may have prevented the parties from settling.

After a hearing involving the details of the case, a panel of case evaluators deliberated and issued settlement amounts. If either party rejected the case evaluation amount, the Michigan Court rules permitted sanctions under certain circumstances. Sanctions typically involved the payment of attorney fees and costs incurred during the case evaluation hearing.

Substitute ADRs may be acceptable in some cases

One of the biggest changes allows parties the option of avoiding the case evaluation process entirely by using another ADR approved by the court. If the parties have filed a discovery plan, the request for another ADR must identify the process, describe the process that will be used, and must be completed no later than 60 days after the close of discovery.

Although the option for a substitute ADR is available in some instances, case evaluations are still the default ADR process in circuit court civil cases. In addition, judges retain the authority to accept or reject the parties’ stipulation to waive case evaluations.

Removal of sanctions

In addition, the Michigan Supreme Court amendments removed the rejecting party’s liability for costs. The reasons behind the change include:

  • Sanctions force settlements that were not based on the merits of claims and defenses;
  • The elimination of sanctions creates equality for defendants and plaintiffs because case evaluations primarily favored defendants and insurance carriers (who would absorb the costs) over plaintiffs with a single case;
  • Since less than one percent of circuit court civil claims are adjudicated at trial, sanctions were no longer needed; and
  • Other states do not use sanctions in their ADR processes.

Other changes

Other major case evaluation changes include:

  • The time for the hearing panel to make an evaluation and submit it to the ADR clerk and for providing case evaluation summaries and other documents was shortened from 14 to 7 days.
  • The definition of “verdict” was updated to include, “a motion entering judgment on an arbitration award.” The term “actual cost” was also updated to include attorney fees “dating to the rejection of the prevailing party’s last offer or counter offer.”
  • Case evaluators must have 15 years of experience.

Help is available

The litigation and disputes practice group attorneys at O’Reilly Rancilio are available to answer your questions regarding the changes to case evaluation process. For more information, please call 586-726-1000 or visit our website.

Categories: Litigation