Mediating an Appellate Case - Part II

 

The decision to appeal involves more than a consideration of the merits of an appeal.  I find there are two major issues involved in every appeal:  a financial decision and a decision based on the merits.  Here are some factors that enter into the financial decision:

• Is the judgment immediately enforceable?  If so, does the appellant have the ability to bond the judgment or post an undertaking to stop enforcement proceedings?  A bond or undertaking will be 1-1/2 to 2 times the judgment and collateral for a bond is extremely limited (usually cash or a line of credit), not to mention the cost of the premium.  This factor alone can force a settlement, a bankruptcy petition, or a visit to an asset protection attorney to protect the appellant's assets.

• Is there an attorney's fees provision?  If so, the appellant has to realize that the loss of an appeal means paying two sets of attorneys:  the appellant's attorney and the respondent's appellate attorney.  

• Can the appellant afford to pay the attorney's fees for an appeal?  Appellate attorneys are not ordinarily risk-takers.  Because much of their work is done at the beginning of a case, they are less flexible in taking payments or handling a case on a contingency fee basis.  Appellants who have limited resources for these fees - not to mention the filing fees and costs of preparing the record -may have to consider whether an appeal is economically viable.

• What will the appeal get the appellant?  If a winning appeal merely means going back for a retrial, the appellant must be prepared to pay the costs of trial, including expert fees and attorney's fees, for a second trial.

• How much are the transcripts?  The costs of the clerk and reporter's transcripts can really add up and these costs must be paid up front.  Sometimes the expense of paying for a reporter's transcript for a long trial is enough to stop an appellant from proceeding.

• Does the appellant have the emotional stamina to go through more litigation?  Litigation produces a lot of stress and most people are not comfortable dealing with our legal system.  The best result for them would be to get them out of the system and back to their regular lives.

If you are the respondent, the odds are certainly in your favor, but your win is not a true win until you have the cash in your bank account.  The value assigned by the jury or court is capable of being slashed, discounted or negotiated down.  And when you consider that you have to pay attorney's fees to fight the appeal or pursue enforcement of the judgment, that judgment is quickly being chipped away.  Toss in the risk of losing on appeal, which can mean a retrial or a complete loss, then you can start sweating.  And stress is not limited to one side.  No client I know enjoys litigation.

Don't forget to factor in the time spent on appeal.  Most appeals can be concluded within 1 to 1-1/2 years, but that was before our budget crisis.  You can add in more time, maybe even two years to process an appeal, and hope that the money is still there at the end of the process.  A petition for review to the Supreme Court could delay the process even more.  Of course, when the appellant posts a bond, you have the assurance the money is there, earning a nice 6-10% in interest, but that also means you still have to win.

So, consider the possibility of mediating your appellate case with an open mind.  You could be surprised and the case may settle.