The Settlement Mindset

While settlement in any field of law carries with it some degree of emotional component, in matrimonial law, it is the emotional component that often predominates above all else, especially in the context of a custody dispute. In a financial dispute, no matter how complex the issues, it is important to instill in a client that the underlying essence of settling is akin to executing a business transaction. Remove (to the best of the client's ability) the emotional component from the transaction, and the process will flow more smoothly toward an amicable resolution. The success of such efforts, however, again depends on a client's personality and willingness to settle in a fair and equitable manner.

A custody dispute often takes on a life of its own, even where financial issues, such as child support payments, underlie arguments pertaining to the so-called “best interests of the child.” Consequently, settling custody issues is often unthinkable to one or both of the parties until an expert offers custody and parenting time recommendations to be used at trial. Because trial judges often rely (to a great extent) upon such recommendations, even in the face of cross-examination and, on occasion, the report of a rebuttal expert, parties realize that having a trial on the issue is costly from both a financial and emotional standpoint to the entire family. Of course, by the time such recommendations are made, the parties have already expended thousands of dollars trying to sway the expert in their favor.

Settlement Efforts

Since legislative and judicial bodies favor settlement over litigation ' primarily in the name of judicial economy ' it is no surprise that many jurisdictions mandate that parties engage in settlement efforts during the course of a divorce. In New Jersey, for example, parties in the midst of litigation are required to engage in no less than four different forms of settlement effort ' most commonly in the following order: 1) custody and parenting time mediation; 2) the Early Settlement Program; 3) economic mediation; and 4) intensive settlement conference(s) with the trial court.

Regardless of these mandated efforts, however, litigation and settlement should be viewed as two “parallel paths” where neither one resides to the mutual exclusion of the other. Simply put, while court-imposed deadlines require practition- ers and parties to proceed accordingly, there is nothing preventing the parties from settling at any point. Settlement efforts, should, therefore, include parties' independent efforts to settle as well as the court-mandated efforts to the extent present in each jurisdiction.

Consequently, many cases start with settlement discussions before the parties even officially initiate a divorce through the filing of a Complaint. Advising a client to engage in such settlement efforts, possibly including mediation or collaborative divorce, prior to the commencement of an official divorce matter may prove an effective and cost-efficient way to resolve a matter expediently without the acrimony and expense of litigation. It may also provide a greater sense of the issues and focused articulation of them, in the event that settlement efforts stall, of the other party's position.

Initial efforts generally involve an informal exchange of discovery, including a completed financial information form, which may be required in each jurisdiction, to provide a party's statement, under oath, of an overall picture of assets, liabilities, income, and lifestyle.

Document Exchange

The basic document exchange can occur before or after an initial meeting between the parties and lawyers, with or without a mediator, so that there exists a fundamental understanding of the finances and each other's initial position. Once documents are exchanged, a subsequent meeting can occur, again, with or without a mediator. While a mediator's presence is by no means required, it can certainly help provide credibility to the discussion, where each party is likely skeptical of the other's submissions. That independent non-party voice of reason will ideally provide a calming influence over settlement discussions. In addition, the mediator's objective voice of reason may better be able to determine whether or not both parties are motivated to mediate and settle in a reasonable manner, or if litigation is the only avenue available.

Legal Counsel

To that end, critical to any settlement effort is both parties' investment in resolving a matter reasonably and in good faith. If you represent or consult with the so-called “supported spouse,” be wary of the “monied” spouse's motivation to mediate immediately, without the presence of legal counsel. The worst possible result under such circumstances is a quick settlement by a supported spouse who did not learn of her legal rights before executing a written agreement, but simply wanted to move on with her life. A good mediator will often have a sense for such precarious situations, at which point he or she will usually recommend that the supported spouse consult with an attorney before executing any settlement agreement. Ensuring that your client not only knowingly understands the legal implications of a settlement, but also the financial and emotional implications, will better ensure that your clients are voluntarily entering into the terms that will likely affect their lives for years to come.

Pushing for Litigation

Not surprisingly, the “monied” spouse often will push for litigation to drive the less financially advantaged spouse into submission if settlement does not occur under his terms. While the latter has the right and ability to seek counsel fees from the former so that each can litigate on an “even playing field,” there is no guarantee that such fees will be voluntarily provided or awarded by a trial judge, or, if awarded, actually paid, often leaving the supported spouse with the troubling decision of whether to settle now while she can still afford to do so.

By contrast, legal counsel for the “take it or leave it” party should ensure that he understands the exorbitant cost of litigating, especially in preparing for and litigating a trial. Also ensure that he understands how the larger, longer-term picture should prevail over extracting the proverbial “pound of flesh” for a short-term “victory.” Thus, in matrimonial law, more than any other field of practice, attorneys are better served by instilling in clients a sense of closure and resolution, rather than punishment or revenge. The judiciary, aligned with this mindset, will not hesitate to penalize a party for driving litigation in an unreasonable manner by awarding the other party counsel fees.

Conclusion

While the discussion above represents a very general overview of the settlement process, ultimately a matrimonial lawyer's approach to settlement will depend largely upon his or her own willingness to settle, beyond that of the client. As our clients often put their lives in our hands, they are more likely to accept our counsel and guidance than dictate the course of action. It is, therefore, incumbent upon us as practitioners not only to know the law, but the benefits of settlement in this most emotional area of practice.

Laurence J. Cutler, a member of this newsletter's Board of Edtitors, is an equity partner with Fox Rothschild, LLP. Robert Epstein is a member of the firm's Family Law Practice and represents clients in all stages of family law litigation.

It is widely known among matrimonial practitioners that almost all cases settle ' well above 95%, in fact. It is also widely known that if, when, and how settlement is reached depends on countless factors including, but not limited to, a given set of factual circumstances (assets, liabilities, income, and the like), the parties, and ' not surprisingly ' the attorneys. The personalities of both the parties and their attorneys affect their willingness to settle. Presuming, (admittedly, perhaps unrealistically) that each attorney involved will have a similar knowledge of the facts, law, and the like, the way an attorney approaches a given matter often dictates the course of settlement.

For this reason, parties often research not only a matrimonial lawyer's pedigree, but the lawyer's reputation as well, before they decide whether to retain that person to act on their behalf. For the purpose of this article, the primary question a party researches in retaining a lawyer is whether the lawyer's mindset is more geared toward settlement or litigation. Certain matrimonial lawyers have a reputation for not knowing how to settle a case, preferring to litigate issues in court rather than to resolve issues peacefully in a conference room. However, most attorneys advise their clients that settling with their spouse, rather than engaging in the protracted and costly exercise where a trial judge decides the issues, is a better and far more cost effective resolution. One of the exceptions, perhaps, involves cases in which there exists a legal or valuation issue that would best be decided by a trial judge. Even in those cases, however, parties can attempt to resolve other issues to narrow those remaining before the court.

The Emotional Component

While settlement in any field of law carries with it some degree of emotional component, in matrimonial law, it is the emotional component that often predominates above all else, especially in the context of a custody dispute. In a financial dispute, no matter how complex the issues, it is important to instill in a client that the underlying essence of settling is akin to executing a business transaction. Remove (to the best of the client's ability) the emotional component from the transaction, and the process will flow more smoothly toward an amicable resolution. The success of such efforts, however, again depends on a client's personality and willingness to settle in a fair and equitable manner.

A custody dispute often takes on a life of its own, even where financial issues, such as child support payments, underlie arguments pertaining to the so-called “best interests of the child.” Consequently, settling custody issues is often unthinkable to one or both of the parties until an expert offers custody and parenting time recommendations to be used at trial. Because trial judges often rely (to a great extent) upon such recommendations, even in the face of cross-examination and, on occasion, the report of a rebuttal expert, parties realize that having a trial on the issue is costly from both a financial and emotional standpoint to the entire family. Of course, by the time such recommendations are made, the parties have already expended thousands of dollars trying to sway the expert in their favor.

Settlement Efforts

Since legislative and judicial bodies favor settlement over litigation ' primarily in the name of judicial economy ' it is no surprise that many jurisdictions mandate that parties engage in settlement efforts during the course of a divorce. In New Jersey, for example, parties in the midst of litigation are required to engage in no less than four different forms of settlement effort ' most commonly in the following order: 1) custody and parenting time mediation; 2) the Early Settlement Program; 3) economic mediation; and 4) intensive settlement conference(s) with the trial court.

Regardless of these mandated efforts, however, litigation and settlement should be viewed as two “parallel paths” where neither one resides to the mutual exclusion of the other. Simply put, while court-imposed deadlines require practition- ers and parties to proceed accordingly, there is nothing preventing the parties from settling at any point. Settlement efforts, should, therefore, include parties' independent efforts to settle as well as the court-mandated efforts to the extent present in each jurisdiction.

Consequently, many cases start with settlement discussions before the parties even officially initiate a divorce through the filing of a Complaint. Advising a client to engage in such settlement efforts, possibly including mediation or collaborative divorce, prior to the commencement of an official divorce matter may prove an effective and cost-efficient way to resolve a matter expediently without the acrimony and expense of litigation. It may also provide a greater sense of the issues and focused articulation of them, in the event that settlement efforts stall, of the other party's position.

Initial efforts generally involve an informal exchange of discovery, including a completed financial information form, which may be required in each jurisdiction, to provide a party's statement, under oath, of an overall picture of assets, liabilities, income, and lifestyle.

Document Exchange

The basic document exchange can occur before or after an initial meeting between the parties and lawyers, with or without a mediator, so that there exists a fundamental understanding of the finances and each other's initial position. Once documents are exchanged, a subsequent meeting can occur, again, with or without a mediator. While a mediator's presence is by no means required, it can certainly help provide credibility to the discussion, where each party is likely skeptical of the other's submissions. That independent non-party voice of reason will ideally provide a calming influence over settlement discussions. In addition, the mediator's objective voice of reason may better be able to determine whether or not both parties are motivated to mediate and settle in a reasonable manner, or if litigation is the only avenue available.

Legal Counsel

To that end, critical to any settlement effort is both parties' investment in resolving a matter reasonably and in good faith. If you represent or consult with the so-called “supported spouse,” be wary of the “monied” spouse's motivation to mediate immediately, without the presence of legal counsel. The worst possible result under such circumstances is a quick settlement by a supported spouse who did not learn of her legal rights before executing a written agreement, but simply wanted to move on with her life. A good mediator will often have a sense for such precarious situations, at which point he or she will usually recommend that the supported spouse consult with an attorney before executing any settlement agreement. Ensuring that your client not only knowingly understands the legal implications of a settlement, but also the financial and emotional implications, will better ensure that your clients are voluntarily entering into the terms that will likely affect their lives for years to come.

Pushing for Litigation

Not surprisingly, the “monied” spouse often will push for litigation to drive the less financially advantaged spouse into submission if settlement does not occur under his terms. While the latter has the right and ability to seek counsel fees from the former so that each can litigate on an “even playing field,” there is no guarantee that such fees will be voluntarily provided or awarded by a trial judge, or, if awarded, actually paid, often leaving the supported spouse with the troubling decision of whether to settle now while she can still afford to do so.

By contrast, legal counsel for the “take it or leave it” party should ensure that he understands the exorbitant cost of litigating, especially in preparing for and litigating a trial. Also ensure that he understands how the larger, longer-term picture should prevail over extracting the proverbial “pound of flesh” for a short-term “victory.” Thus, in matrimonial law, more than any other field of practice, attorneys are better served by instilling in clients a sense of closure and resolution, rather than punishment or revenge. The judiciary, aligned with this mindset, will not hesitate to penalize a party for driving litigation in an unreasonable manner by awarding the other party counsel fees.

Conclusion

While the discussion above represents a very general overview of the settlement process, ultimately a matrimonial lawyer's approach to settlement will depend largely upon his or her own willingness to settle, beyond that of the client. As our clients often put their lives in our hands, they are more likely to accept our counsel and guidance than dictate the course of action. It is, therefore, incumbent upon us as practitioners not only to know the law, but the benefits of settlement in this most emotional area of practice.

Laurence J. Cutler, a member of this newsletter's Board of Edtitors, is an equity partner with Fox Rothschild, LLP. Robert Epstein is a member of the firm's Family Law Practice and represents clients in all stages of family law litigation.