SECTION 20.75. Assisted Negotiation Methods

The parties may agree to use any of the following methods, or a combination of these methods, or any assisted negotiation process agreed to by the parties to seek resolution of a dispute under Texas Government Code, Chapter 2260. If the parties agree to use an assisted negotiation procedure, they shall agree in writing to a detailed description of the process prior to engaging in the process:

(1) Mediation;

(2) Early evaluation by a third-party neutral:

(A) The parties and their counsel shall, in a confidential conference, present a summary of the factual and legal bases of their claim to an experienced neutral with subject-matter expertise or with significant experience in the substantive area of law involved in the dispute;

(B) After the summary presentations, the third-party neutral shall identify areas of agreement for possible stipulations, assess the strengths and weaknesses of each party's position, and estimate, if possible, the likelihood of liability and the dollar range of damages that appear reasonable to him or her. The third-party neutral's assessments and estimates are not binding on the parties;

(C) This procedure is less complicated than the mini-trial, described in paragraph (4) of this section, and may be appropriate when only some issues are in dispute, such as where there are clear-cut differences over the appropriate amount of damages. This process may be particularly helpful when:

(i) the parties agree that the dispute can be settled;

(ii) the dispute involves specific legal issues;

(iii) the parties disagree on the amount of damages; or

(iv) the neutral is a recognized expert in the subject area or area of law involved;

(3) Neutral fact-finding by an expert:

(A) After most discovery in the dispute has been completed and the significance of particular technical or scientific issue is apparent, the parties may request a neutral third-party expert to study the particular issue and report his or her findings of fact on that issue;

(B) The parties may agree in writing that the fact-finding will be binding on them in later proceedings (and entered into as a stipulation in the dispute if the matter proceeds to contested case hearing), or that it will be advisory in nature, to be used only in further settlement discussions between representatives of the parties. This process may be particularly helpful when:

(i) factual issues requiring expert testimony may be dispositive of liability or damage issues;

(ii) the use of a neutral is cost effective; or

(iii) the neutral's findings could narrow factual issues for contested case hearing;

(4) Mini-trial:

(A) A representative of upper management from each party, with authority to settle, shall attend a mini-trial conducted by a third-party neutral selected by agreement of the parties. The mini-trial shall be divided into three phases: a limited information exchange phase, the actual hearing, and post-hearing settlement discussions. No written or oral statement made in the proceeding may be used as evidence or an admission in any other proceeding;

(B) The information exchange stage shall be sufficient for each party to understand and appreciate the key issues involved in the case. At a minimum, parties shall exchange key exhibits, introductory statements, and a summary of the witness' testimony;

(C) At the hearing, representatives of the parties present a summary of the anticipated evidence and any legal issues that must be decided before the case can be resolved. The third-party neutral presides over the presentation and may question witnesses and counsel, as well as comment on the arguments and evidence. Each party may agree to put on abbreviated direct and cross-examination testimony. The hearing generally takes no longer than one to two days;

(D) Settlement discussions, facilitated by the third-party neutral, take place after the hearing. The parties may ask the neutral to formally evaluate the evidence and arguments and give an advisory opinion as to the issues in the case. If the parties cannot reach an agreed resolution to the dispute, either side may declare the mini-trial terminated and proceed to resolve the dispute by other means;

(E) Mini-trials may be appropriate when:

(i) the dispute is at a stage where substantial costs can be saved by a resolution based on limited information gathering;

(ii) the matter justifies the senior executive time required to complete the process;

(iii) the issues involved include highly technical mixed questions of law and fact;

(iv) the matter involves trade secrets or other confidential or proprietary information; or

(v) the parties seek to narrow the large number of issues in dispute.

Source Note: The provisions of this §20.75 adopted to be effective February 12, 2004, 29 TexReg 1196