IN THE PROFESSION informally , and at a far lower cost and far earlier than through discovery .
Note that this exchange is not a “ turn over every stone ” discovery , but it is what we refer to in the EDR worlds as what is “ sufficient ” to address the key questions . With that sufficient information , both your client and Tasty Ice can step back and value the contract claim . Part of a structured expected value calculation in EDR is recognizing that there are a range of outcomes , and that it makes more sense to work not from the home run outcome , but from the most likely reasonable outcome .
The EDR neutral will go further , working with counsel to develop a low end , high end , and middle range of damages , and to assign a percentage likelihood to each . The middle range would essentially be the widest part of our experiential bell curve , what we would expect based on experience would happen at trial or on dispositive motion most of the time .
In the Tasty Ice example , it is possible that was based on a track record of revenue for one nearby location , and not the most optimistic projections , from the hottest summer on record , for all five locations . The EDR neutral will then take both side ’ s values and discount for probability and risk , finally deducting what both sides estimate will be their expected legal cost .
This structured analysis – seeing the risk assessment in print along with calculation of expected value – works a certain magic , giving each party an important grounding in the reality of the situation .
In our case study , after going through this exercise , the EDR neutral shows you and RTG ’ s owner , based on your client ’ s own inputs and estimates , an expected value for the case of anywhere from $ 550,000 to $ 750,000 , and shows Tasty Ice and its counsel , based on their own inputs and estimate , an expected value of $ 400,000 to $ 500,000 .
Looking at these ranges , you will notice that a gap still exists ; the RTG middle value is higher than the Tasty Ice middle value , but the parties ’ estimates are far , far closer . There is no longer a $ 5,000,000 gap – in fact , it is more like $ 50,000 , now also grounded in the parties ’ own data and own analysis . The stage is set for the mediator to explore intangible interests and ways settlement can add non-monetary benefit to both sides .
Indeed , it turns out that Tasty Ice had some concerns about RTG ’ s experience , and your client has been worried about the effort and expense of getting five locations open all at once . With realistic numbers in view in both rooms , and these interests in mind , a deal is struck : Tasty Ice will credit $ 400,000 towards franchise buy-in costs for RTG , letting your client open one unit now , and after a full year of profitable financial performance , will consider additional units in good faith . The parties can release their respective claims , dismiss the litigation , and put their money back into the businesses .
Although I wrote the case study , I can tell you from talking to other EDR neutrals that it is very representative ; the EDR process is getting results . If you are interested , the EDR Institute ( edrinstitute . org ), whose protocols I will often suggest and use , has excellent resources available .
Keep in mind they are a starting point for your own thinking and adaptation . You do not need a full-blown EDR agreement to start , or even to use the full EDR process in every case -- just as when you go out for ice cream you do not always need to order the triple-scoop , extra fudge , deluxe banana split . You can try a scoop or two , sampling a new flavor or perhaps trying a different cone .
Perhaps you get your mediator involved early , asking him or her to assist counsel with some informal discovery . Perhaps you draft a stipulation yourself , providing for some early and mutual informal document exchange , and then discuss it with opposing counsel . Or perhaps you simply raise the topic of settlement in a case earlier than you might have otherwise . As with frozen treats , to finish where we started , there are different flavors to suit different palates . Give a new one a try , and you may find it unexpectedly refreshing .
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