Thinking through the negotiation process: checklists and step-saving form pleadings can keep a case moving forward, but a winning settlement package requires careful thought.

In seminar after seminar, trial lawyers are taught how to take depositions, try cases, and negotiate settlements. We are given rules--sometimes conflicting ones--to follow: Always file written discovery with the complaint. Never file written discovery with the complaint. Always make a settlement demand. Mediate every case.

We dutifully take notes, making checklists based oil the suggestions of seminar presenters and other colleagues. As we grow in our practices, we create our own checklists and rules and develop time-saving form pleadings and discovery.

We no doubt become better attorneys by following the tried-and-true practices of others and creating stop-saving systems. However, lists, rules, and form pleadings also can work to our and our clients' disadvantage. They tempt us to delegate too many tasks and can discourage us from thinking carefully about what best serves our clients' interests.

In each step of litigation, we must think before we act. Negotiating a settlement in an auto crash case is no exception. Every decision you make during the settlement process should be deliberate, and the following suggestions should be considered with that in mind. No rule or tip should ever replace your independent analysis of a client's case.

To send or not to send

In most collision cases, sending a settlement package and a demand for a sum certain before filing suit is a given. After all, a reasonable settlement almost always serves your client's best interests, and sending a settlement package and a demand allows negotiations to begin.

However, the decision to do this must be made with care. Ask yourself: In this particular case, will sending either a settlement package or a demand, or both, advance my client's interests? The answer is usually, but not always, yes.

Imagine you represent an honest, hardworking, 48-year-old man named Joe who suffered neck and back injuries in a low-speed, rear-end collision. Diagnostic tests show that Joe suffered from moderate-to-severe degenerative disk disease long before the crash. The impact caused no obvious disk herniations or other anatomical changes. However, it did cause Joe severe pain, requiring cervical and lumbar laminectomies. Neither car was damaged.

Based on earlier experience with the insurance company and adjuster involved in the case, you know there is little chance that the company will extend a reasonable settlement offer. In the past, you have prepared settlement packages that summarized liability and damages and included photographs and other potential exhibits, only to discover that no meaningful offer would be made. You also know that the law firm representing this insurer is generally lair and reasonable.

Your checklist tells you to send a demand before filing suit. However, based on the type of case (low-speed impact with connective-tissue injuries), Joe's characteristics (honest, hardworking, and presentable), and your prior dealings with the adjuster (impossible) and probable defense attorney (fair and reasonable), you and Joe decide it is best to file suit without first attempting to settle.

Always proceed with caution in deciding whether to send a settlement package and a demand. There may be reasons to send them--for example, to lay the foundation for a bad-faith argument--even if you are sure they will elicit no response. There may be reasons not to send them--for example, because you need to gather more information--even if you are certain your adversary would respond favorably.

Timing

The decision on when to send a settlement package and demand must be made case by case. The following factors, while not an exhaustive list, can affect this determination.

Your client. Your client's age, personality, life expectancy, financial condition, and emotional state bear heavily on the timing of settlement negotiations.

Your client's injuries. As a general rule, you should not send a demand until you know as much as you can about your client's injuries, the treatment they require, and the permanent restrictions on his or her activities that will result from them.

Liability. You must consider the strength of your liability case, including an analysis of your client's comparative fault or contributory negligence, in determining the proper timing for settlement negotiations. For example, in a case with significant injuries but questionable liability, the earliest possible investigation of physical facts and witnesses may allow you to present the best version of your client's story. If you fear your case will only become weaker with the defendant's protracted scrutiny, push for an early settlement.

The defendant's assets and insurance coverage. The extent to which a defendant's assets and insurance can satisfy a judgment plays a significant role in the timing of a settlement demand. For example, if you know that your client's damages far exceed available insurance coverage and that the defendant is otherwise judgment-proof, an early settlement can minimize your client's litigation expenses.

Pressure on the defendant. All else being equal, you should make a settlement demand when the defendant has the most to lose from going forward. For example, if your client's case is ready for settlement, consider making a demand before you file suit so that the insurance company (and your client) can avoid the cost of litigation.

Returning to Joe's case, imagine that you filed suit and the defense attorney asked for a demand. Although you trust your adversary to be fair and reasonable once negotiations begin, it is too soon to start them. Joe is still being treated by a neurosurgeon, who has scheduled a cervical laminectomy for next month. At this point, you do not know the extent of your client's injuries.

You have discussed Joe's case with his treating doctor, who strongly believes that the collision necessitated his surgeries. You know from previous experience that this doctor makes a good witness. Despite the expenses involved, you believe that the value of Joe's case will increase dramatically after you depose the neurosurgeon, so you put off making a settlement demand until this witness can be deposed about the results of the pending surgery.

Consider another case, in which you represent George, who suffered a closed-head injury in a rear-end collision. You have gathered medical records and bills, as well as documentation from George's employer and avocational rehabilitation counselor, who verify his lost wages and loss of earning capacity.

George has unquestionably suffered serious injuries and liability is clear. His past medical bills alone total almost $40,000, and he has not worked in nearly two years. Unfortunately, insurance coverage is limited to $100,000, and the self-employed defendant driver disclosed no unencumbered assets of significant value. You also performed an asset check, which confirmed the defendant's limited ability to satisfy a court judgment.

Given these facts, you and George decide that you should send the defense a policy-limits demand before incurring further expenses.

Preparation

Once you have decided to scud a settlement package and a demand, and determined the best time to do so, you have the freedom and flexibility to create a package that will best serve your client's interests.

A few basic truth s govern preparation of settlement packages:

Honesty is the best policy. Your package should be both straightforward and truthful. State the case the way you plan to prove it, without overreaching. Recognize and address your weaknesses head-on.

You can have too much of a good thing. Pare down the facts and your arguments to those that matter most. Your job is to convince your adversary that your position is correct, or at least that a jury is likely to find in your client's favor. Just as jurors get lost in extraneous information at trial, so do adjusters, in-house counsel, and defense attorneys. Use direct, clear language and information to set forth your best case.

Diligence is the mother of good fortune. Carefully determine your game plan and execute it diligently. A properly prepared settlement package incorporates a theme and organizational structure that will ultimately guide you in trial.

We can judge the whole piece by a small sample. Your only job in preparing the settlement package is to convince your adversary to settle by making him or her understand the risks of going forward with the litigation. The package should provide a taste of the proof and argument to come. From your settlement presentation, your adversary should be able to judge the strength of your entire case.

Design your settlement package to impress everyone on the defense side who is involved in the decision-making process.

The adjuster. Many adjusters have become jaded by years of reviewing the cases of claimants who they may imagine are minimally injured, money-hungry malingerers. Show them your case is different. If you have not worked with the adjuster previously, ask colleagues for information about his or her usual method of evaluating cases.

Opposing counsel. Your adversaries' firms probably require them to bill a massive number of hours each year. This can encourage them to "churn the files" to increase billable hours and discourage them to settle. Get the lawyer's attention by making your client's file stand out from the crowd. For example, in Joe's case, avoid mailing a form demand. Instead, hand-deliver a polished and thorough settlement package that shows that Joe's injury is not just a "typical" sprain/strain case and that you and Joe are ready for trial.

Also, as with the adjuster, get to know how your adversary works. If you have not worked with the lawyer before, gather as much information as possible about his or her practices from others who have.

In-house counsel and corporate risk managers. Your settlement package may provide the first information these individuals get about the case and their first indication of the threat it may pose to their interests. Make that threat clear.

In-house and consulting engineers. Nothing gets a defendant's attention like the advice of his or her own experts. Make sure the technical aspects of your case are sound.

Public relations, advertising, and sales departments. If the defendant is a business, the threat of a public trial with potential media coverage can be a strong incentive to settle. Make your settlement package impressive enough to catch the attention of those who market the defendant in the community.

Basic anatomy

Most settlement packages include four components: the introduction, the liability statement, the damages statement, and the settlement demand. Because the nature of the components varies with each case, you must carefully determine what to present and how.

Introduction. This should include a brief statement of what the injury is, how it occurred, and the circumstances that compelled you and your client to assemble the package (for example, the defendant invited the client to make a demand, or the package was prepared in anticipation of mediation). The introduction should state clearly that the information contained in the package represents only a sampling of the proof to be presented at trial. The defendant should understand that there is more to come.

Liability statement. This may include a narrative summary of liability, as well as a time line, if applicable, and a summary of the opinions of the plaintiff's experts. Slate the facts honestly but advantageously, and explain how they show the defendant to be liable under each of the theories alleged.

Also address viable defenses in this section. Without giving away any trial secrets, meet the defendant's contentions directly.

Damages statement. This should address every aspect of available damages as specifically as possible. Consider including language from pattern jury instructions or verdict forms, and support each element of damages with documents and other "hard" evidence that will be presented at trial.

Settlement demand. Talk to your client about his or her needs and desires, and incorporate these into your case valuation. Review jury verdicts and settlements from similar cases, and consider listing them in your demand. Include a summary of the aspects of your client's case that will appeal to the jury's emotions.

Realistically evaluate the weaknesses of your case and consider making a list of them for your own reference. Never forget the risks of a jury trial, the possibility of negative posttrial rulings, and the potential for appeal. Remember that an injured client is often in a precarious financial position and will want compensation as quickly as possible.

Choose a reasonable and fair starting point for negotiations. If your client's injuries exceed probable insurance coverage, demand policy limits and ask the defense attorney and insurance company to inform the insured of that demand. This will lay the foundation for a potential bad-faith claim if the demand is ignored.

Exhibits and visual aids 

Your adversary will be impressed by the same things that impress jurors at trial, including high-quality visual aids. You must tell, as well as show, your adversary why he or she should settle the case.

In preparing your settlement package, back up as many statements as possible with an exhibit or visual aid. For example, in the liability summary, you might include copies of the accident report, witness statements, photographs, computer animations, a drunk-driving conviction, previous depositions, industry standards and literature, corporate documents, time lines, and articles written by the defendant's employees or experts.

Exhibits and visual aids are central in strengthening the damages portion of your package. These might include pre- and postinjury photographs, a summary of medical treatment, a summary of medical expenses, a life-care plan, economic loss reports, psychological reports, property damage photographs, segments of interviews with lay witnesses, medical illustrations, and excerpts from depositions.

Make the adjuster's job as easy as possible by spelling out why your client deserves compensation. You can do this by using the same tools you use in presenting your case to a jury. But remember, some pictures may speak a thousand words that you would rather your opponent not hear. Likewise, too many photographs and charts may detract from the strength of your best exhibits. Choose exhibits carefully.

Your job is to convince the settlement decision-maker that the defendant faces great risk in proceeding to trial. As successful mediators will tell you, you must bring the defendant to the point of templation. Make walking away from settlement seem too dangerous. One way to do this is to prepare an impressive video settlement package.

Focused video settlement presentations accomplish several goals.

* They bring to life testimony and other proof that cannot be expressed adequately on paper. For example, you might videotape your client at different times of day, or interview an eyewitness, coworker, or family member who can describe your client's losses.

* Videos highlight and reinforce key aspects of your settlement package. You should incorporate incriminating documents and testimony so that the adjuster, defense attorney, and other important players are forced to focus on them. Not everyone will take the time to read your entire settlement package, but they will usually watch a short video presentation.

* Video presentations help the decision-makers understand what a jury will see and feel.

* When done properly, videos demonstrate your preparedness, commitment, and professionalism.

As with your written settlement package, carefully plan and organize your video presentation. Speak the truth, include only the necessary information, and diligently determine and implement your game plan.

Your video presentation must catch your adversary's attention; consider hiring a video professional to help make it most effective.

Forward motion

As you prepare your settlement package and demand, and as you negotiate your client's case, never forget that you are ultimately preparing for trial. Do not prepare a demand package and then rest after sending it to your adversary. Rather, increase your chances of a meaningful settlement by forging ahead.

Before every negotiation session or after every unsuccessful one, consider taking some action to move the case forward. File a motion to set a trial dale, or move to amend the complaint to increase the demand for compensatory damages or to add a claim for punitive damages when appropriate. Propound additional interrogatories, requests for production, or requests for admission. File a motion to compel if the defendant is stalling on discovery responses. Set additional depositions by agreement or notice. Present your case to a focus group.

On the other hand, if your case will probably only get worse as litigation advances, it might be better not to push the defendant toward trial too quickly. Instead, take actions to strengthen your case: Hire an accident reconstructionist. Interview the treating doctor. Research medical causation. Explore additional visual-aid options for trial. Use your ingenuity to make your client's case as strong as it can be, while seeking a reasonable settlement offer.

Tort cases are like fingerprints--each one is different. Although rules, checklists, and forms can keep you on track and save you time, they can also discourage you from analyzing each case carefully and doing what is best for your individual client. As with every step in the litigation process, when developing a settlement package and a demand, take time to think before you act.

ANNA B. WILLIAMS practices law in Nashville, Tennessee.