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Settlement strategies for complex global litigation: the early resolution of complex litigation through settlement benefits the parties and the civil justice system. Here's a framework for conducting negotiations in both class and nonclass actions.

Article Excerpt
Several years ago, former Senate Majority Leader Trent Lott wrote his autobiography, Herding Cats: A Life in Politics. That unusual title implied that Lott needed great dexterity and patience to lead the Senate, a body renowned for oversized egos, hidden agendas, and backroom deals. Those skills are also required of counsel crafting a resolution of complex litigation, as many of the same complicating factors are present in both situations.

In the abstract, complex litigation is arguably a macrocosm of individual litigation; in reality, it presents an exponential increase in risk and potential complications. The incentives to avoid the uncertainty of trial likewise increase. As trial rates in general plummet, it is no surprise that trial rates for mass actions follow that trend. In fact, class action trials are "quite rare." (1)

Scholars believe that the declining rate of trials reflects changing strategies by defendants as well as plaintiffs. (2) Without question, "the low trial rate in class actions reflects the high stakes that such cases represent for defendants." (3) But the low trial rate also reflects a confluence of factors that benefits parties specifically and the justice system as a whole.

Research rejects the notion that "class settlement[s] can be vehicles for collusion between [the] defendant and class counsel." (4) To the contrary, as a percent of recovery, fees in class settlements are on average less than the typical fee in an individual case. (5)

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The media attention that these complex cases receive also provides an incentive for the parties to conclude litigation without any troubling conduct being placed under a public microscope. Some companies obviously prefer to resolve litigation before their prior manufacturing operations, unhygienic production facilities, faulty testing, or other damaging information is disclosed in litigation and the press.

Furthermore, the enormous cost associated with pretrial activity places a premium on early litigation resolution. (6) Both Main Street and Wall Street generally favor settlements as opposed to the economic uncertainties associated with protracted litigation.

In addition to monetary provisions, settlements often include equitable relief. While these confer benefits to the plaintiffs, they also may provide public relations benefits to corporate defendants. One example is when a corporate defendant agrees to more transparency in product development, quality control, and manufacturing operations. This kind of action can improve a tarnished reputation, act as a catalyst for the corporation to position itself as an industry leader, and increase market share.

Plaintiff counsel must also consider the advantages of early resolution in light of the costs and risks associated with complex litigation. Preemption defenses, Daubert (7) scrutiny, Lone Pine orders, (8) motions in limine, and dispositive motions form a daunting...

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