After a revamp of the court rules pertaining to discovery, the Supreme Court shifted attention to the court rules pertaining to case evaluation. Earlier this month, the Court issued ADM File No. 2020-06, which amends MCR 2.403, MCR 2.404, and MCR 2.405. Some justices believe that the amendments will facilitate docket management. Other justices don't share the same optimism.
Prior to the amendments, MCR 2.403 required case evaluation in every tort case. A panel comprised of three experienced attorneys would evaluate the case, typically toward the end of discovery, and issue an award. The parties would have 28 days to accept or reject the reward. If both of the parties accepted the award, the case would settle. If either of the parties rejected the award, the case would proceed to a settlement conference and eventually a trial. If the rejecting party didn't receive a judgment at least 10% higher than the award issued by the panel, the rejecting party would be liable for sanctions (reasonable costs and attorney fees).
Below is a synopsis of the amendments, which take effect on January 1, 2022.
The Supreme Court amended MCR 2.403 primarily to make case evaluation optional and sanction-free.
- Case evaluation is no longer mandatory in a tort case. The trial court has discretion to submit a tort case to case evaluation.
Case evaluation is now essentially the default ADR process. If the parties don't stipulate to a different ADR process (more on that below), the trial court will submit the case to case evaluation. If the parties stipulate to a different ADR process, the trial court can't submit the case to case evaluation absent written consent from the parties.
- Upon agreement, the parties to any civil action involving primarily money damages or property division may submit a stipulated order referring the case to an ADR process other than case evaluation.
If the trial court has entered a scheduling order or discovery plan, the parties must submit a stipulated order specifying which ADR process they intend to use and when they intend to complete ADR, which must be no later than 60 days after the close of discovery.
If the trial court hasn't entered a scheduling order or discovery plan, the parties must submit a stipulated order within 120 days after the first responsive pleadings. The stipulated order must identify which ADR process they intend to use, along with discovery and disclosure deadlines. Again, the parties must complete ADR within 60 days after the close of discovery.
- The parties must submit case-evaluation fees and summaries seven days before the hearing.
If a party submits a fee and summary in the seven-day period preceding the hearing, the party will be assessed a $150 late fee. If a party submits a summary within the 24-hour period preceding the hearing, the party will be assessed an additional $150 late fee.
- A party who rejects a case-evaluation award is no longer subject to sanctions.
The Supreme Court also amended MCR 2.404, albeit to a much lesser extent in comparison to MCR 2.403. The amendment to MCR 2.404 allows the parties to select a case evaluator. Otherwise, a case evaluator must have served as a neutral ADR provider for at least 15 years.
Lastly, the Supreme Court amended MCR 2.405. Under MCR 2.405, an offer of judgment may subject a rejecting party to liability for actual costs. But in the "interest of justice," a trial court may decline to award actual costs to a prevailing party. The amendment to MCR 2.405 specifies circumstances in which the "interest of justice" may merit the denial of an award of actual costs, which include (but aren't limited to) the following: (1) the offer is de minimus or trivial in the context of the case, and (2) the case involves an issue of first impression or an issue of public interest.
A divided Supreme Court expressed conflicting views about the amendments.
Justice Cavanagh penned a concurrence to paint a complete picture of the process that led to the amendments. She noted that according to a survey and follow-up survey of judges and attorneys, a strong majority of attorneys expressed a preference for private mediation or facilitation over case evaluation. A majority of attorneys and judges supported retention of the sanctions provision. However, the committee tasked with reviewing the case-evaluation rules supported elimination of the sanctions provision. In the committee's view, elimination of the sanctions provision would level the playing field given the consensus that case evaluation primarily favored defendants, who typically have much deeper pockets than plaintiffs.
Justice Viviano authored a dissent to join forces with judges and other commenters who rallied against the "ill-advised" amendments. To begin, he pointed out that the amendments conflict with statutes that require case evaluation in certain cases—namely, medical-malpractice cases and tort cases seeking damages in excess of $10,000—and include sanction provisions. Conflict aside, he opined that case evaluation has been a useful and effective, sometimes even necessary, tool for docket management and resolution of litigation.
As Justice Viviano observed, an overwhelming majority of judges vigorously opposed the amendments. Judges could seemingly counteract the objective of the amendments by declining to sign every stipulated order for a different ADR process and submitting every case to case evaluation. And while the amendments don't require sanctions, they also don't prohibit sanctions. So if there's a statutory basis for sanctions, as in the cases identified by Justice Viviano, sanctions may very well remain in play.
The Supreme Court provided no guidance as to whether the amendments are retroactive. Will the sanctions provision be applicable in a case evaluated a year ago but not yet tried? Will case evaluations scheduled for early 2022 move forward?
There are certainly some gray areas, and there will undoubtedly be issues to navigate while the amendments are in their infancy. At this point, all we can say with certainty is that the impact and efficacy of the amendments remain to be seen.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.