The Importance of Nonjudicial Settlement Agreements
The nuances of the law require countless mechanisms by which to regulate and formalize, but they also require corresponding systems of human activity by which those regulated may overcome or comply with those requirements. Thus, it is that improved methodology for nonjudicial settlement agreements, those contracts by which aggrieved parties reach accord without formal judicial intervention, benefit from improved methodology of their resolution.
The scientific approach to problems and decision-making may be of great service to formalizing these often ad hoc, informal, and non-judicial processes. Just as chemists exploit all that is known about atomic composition to create the right chemical reaction, the legal practitioner may appropriate all that is known about the psychological and social aspects of litigation, negotiation, and settlement to optimize nonjudicial settlement agreements.
The first step in this scientific approach to legal amendment and intervention is identification of the issue. A contractual agreement does not exist in a legal vacuum. Similarly, a contract does not exist in a social or personal vacuum. Parties to a contract create the agreement against each other, toward their own interests, and in light of each other’s expectations. Thus, parties to nonjudicial settlement agreements must identify the criteria on which the agreement will be structured.
Next, the parties must gather the relevant social, economic, financial, or other data reflective of the expected value created by or wasted through the existing contract, or, most importantly, through a modification of that agreement. If the concern is that a provision of the contract has injured one of the parties, then the parties must develop an accurate understanding of the degree of injury suffered, whether it be financial or otherwise. If a party’s concern is that it may be injured by changes in the law, the parties must study the law and develop an understanding of the law’s relevant parameters.
After identifying the issues and gathering the data, a plan must be developed for analyzing the information. This plan requires an understanding of per-capita and average numbers in light of the magnitude of the differing issues. For example, if the issue is the limits of liability prescribed in a contract, then the parties must understand the statistical distribution of losses suffered through their relationship. If the issue is the likelihood of legislative change, then the parties must understand the various paradigms by which lawmakers are bound.
Finally, the parties may test their analysis. Such testing may result in actual experiments which reproduce the situation at various frequencies. As with any other scientific study, the results may be generalized. For instance, if the problem being examined is the efficacy of adopting a state-of-the-art recycling program instead of the old, inefficient, and environmentally harmful methods, the results may be generalized across any state-of-the-practice recycling program. The parties may then test their theory by applying it to the contract. This test may be repeated until the parties reach closure. At that point, the renegotiation may finally proceed toward its ultimate adoption.
The impact of this methodology is clear. The litigation process is never-ending and costly. Every appeal may lead to another critical juncture, and every juncture may turn into another judicial hearing to ascertain whether, in fact, the parties actually reached an agreement. But with the nonjudicial settlement agreement, the many expenses and uncertainties of trial waiting are avoided. Ultimately, when litigants can avoid the courtroom, the courtroom is a better place.