“Early Neutral Evaluation” For The South Carolina Family Court Bench and Family Court Attorneys In The Wake Of Kosciusko v. Parham

For the South Carolina family court bench and family court bar, the South Carolina Court of Appeals in its published opinion in the case of Kosciusko v. Parham, S.C.Ct.App., Opinion No. 5690, filed November 6, 2019, (1) immediately compelled the cancellation of every scheduled binding arbitration where the issues for resolution were “child-related” [e.g., the school to be attended by the child; or the extracurricular activities in which a child could participate; etc.]; (2) immediately sent the family law attorney rushing to pull a file where a client’s court-approved settlement agreement had included a provision “compelling binding arbitration” in the event of the parents’ impasse on any child-related issue; (3) gave immediate pause to any sitting family court judge who, at some point during the trial of a case and while on the record, might have announced to the party-litigants that “I need to hear from the guardian ad litem who I consider to be the eyes and ears of the court”; and (4) required family law attorneys to determine what ADR “alternatives” now remained available to the attorney in the resolution of complex child-related issues given, perhaps, a client’s limited financial resources to wage seemingly unending litigation between warring parents.

Kosciusko v. Parham concluded by stating the following: “Based on the foregoing, we hold that the family court does not have subject-matter jurisdiction to sanction or approve binding arbitration of children’s issues. …”.

Full stop.

Although there is so much to “unpack” within Kosciusko, I found the following excerpts to be the beating heart of this opinion:

“Consistent with Swentor, we do not believe the limited powers of a court in regard to a binding arbitration award can be reconciled with our state’s precedent requiring that the family court decide children’s issues in the best interest of the children. Our courts have consistently held the ‘family court is vested with the exclusive jurisdiction to ensure that, in all matters concerning a child, the best interest of the child is the paramount consideration.’ (Citations omitted throughout) … this court has held, ‘in the final analysis, it is the family court that is charged with the authority and responsibility for protecting the interests of minors involved in litigation, not the guardian or any other person whom the court may appoint to assist it. … A family court has an independent responsibility to determine questions of custody and visitation of minor children according to their best interests, which responsibility cannot be controlled by an agreement or stipulation of the parties.’ … .”

Kosciusko added that “… (N)otably, (ADR) Rule 4(d)(1) specifically provides that unresolved issues of custody or visitation may be ordered to early mediation. Moreover, the second part of Rule 4(d)(5) provides that the parties may elect to submit all issues to early neutral evaluation.” (Emphasis added)

Early Neutral Evaluation has been “hiding in plain sight” within our South Carolina Alternative Dispute Resolution rules since the enactment of these Rules. And given its prominent mention within Kosciusko v. Parham, I will try and provide you with something akin to a tutorial on “early neutral evaluation” and I’ll remain optimistic that our family court bar may find it to be an additional, and almost chameleon-like, “ADR arrow in your quiver” in resolving ALL of your family court issues, both child-related and otherwise.

1.       So what is “Early Neutral Evaluation”?

            SCADR Rule 14 states the following:

“Rule 14
Description of Early Neutral Evaluation (ENE)

               In early neutral evaluations, the parties and their counsel, in a confidential session, make compact presentations of their claims and defenses, including applicable evidence as developed at the time of the evaluation, and receive a non-binding evaluation of the matters in controversy by an evaluator. The evaluator also assists in identifying areas of agreement, offers case planning suggestions and assists the parties in settlement discussions.”

On the family court side, early neutral evaluation (ENE) provides party-litigants and their attorneys with a process for “test-driving” their respective positions before a selected ENE “evaluator” and to receive, among other things, “in a family court case…the likely result of a trial of all issues”.

The ENE process is also an ADR hybrid which can combine certain elements both of mediation (for example, private caucusing with the parties, confidentiality, informal presentations, settlement objectives) and non-binding arbitration (e.g., the parties and attorneys shall receive a “non-binding evaluation of the matters in controversy by an evaluator”…in other words, an evaluation which measures and grades the relative strengths and weaknesses of each party’s case).

2.      How Early Neutral Evaluation can be both a significant benefit to the South Carolina family law attorney and a financial benefit for the clients.

ADR Rule 14 states, in part, that the “evaluator also…offers case planning suggestions and assists the parties in settlement discussions”.   In this regard, your ENE evaluator can assist you not only with making strategic, trial-related suggestions and recommendations, but also working with your client and you to assess the “strengths and weaknesses” of your case, and assist you in crafting meaningful, realistic settlement options and proposals.

Additionally, if the attorney is having difficulties with a client’s unrealistic litigation demands or “outcome expectations”, your ENE evaluator can be expected to carefully, but objectively, work through all of those concerns and “client expectations” to assist the attorney and his/her client in crafting a reasonable outcome.

Furthermore, one of the ENE evaluator’s responsibilities is to provide the attorney and his/her client with a realistic, but candid, assessment of the potential litigation costs which shall be involved in the client’s litigation process.

3. “Q&A” about Early Neutral Evaluation.

Q. How is it different than mediation? 

“Mediation on steroids” would be an accurate description of an early neutral evaluation.  The ENE evaluators’ frankness (e.g., bluntness) in addressing the ENE issues with the parties and attorneys can be compellingly effective.  There is a sense of going beyond BATNA in that the ENE evaluators can give an opinion of sorts on a likely outcome of the litigation following a trial on the merits of the case.

Q. For lawyers who have experienced heavy-handed mediators, how do you distinguish between an early neutral evaluator and a mediator? 

“Mediators being heavy-handed”!  Point No. 1 from the “South Carolina Standards of Conduct For Mediators” states:  “Self-determination is the fundamental principle of mediation. It requires that the mediation process rely upon the ability of the parties to reach a voluntary, uncoerced agreement.”

But we clearly understand the key point you are making with this question; and to that point, ENE evaluators are also governed by these same Standards, and it is critical to immediately establish, not only a workable rapport with the parties and their attorneys, but also a sense that your ENE evaluator should be trusted enough by them to help move them forward in a professional manner.   However, the ENE Rules most certainly provide a constant reminder to the parties of the uncertainties for unknown outcomes based upon the decision-making vagaries inherent in the family court system.

Q. In preparing for an ENE, how can attorneys help clients who are not experienced with mediation understand the difference between ENE and mediation? 

An abbreviated answer, and perhaps the most useful one, is that family court mediations in South Carolina are mandatory statewide and early neutral evaluations are not. Also, take the time again to review SCADR Rule 14, above.  Consequently, because parties who have commenced family court litigation must have their cases mediated (unless they are able to be exempted from mediation) before they can request a final hearing, mediation has now become melded/blended into, and as part of, the overall litigation process …. and there is a decided difference between wanting to mediate your case in a good faith effort to settle it, rather than being required to “go through mediation” before you can get to trial.

As stated in Kosciusko v. Parham, you can have ALL of your issues for litigation (e.g., child-related and financial-related alike) addressed and resolved through the early neutral evaluation in a myriad of creative ways.

Q. What information should you submit to the ENE evaluator?

Because the ENE evaluator should review everything transmitted by the attorneys to the evaluator, “the more information the better” would be the correct answer here. Additionally, and as time permits, the more that information is placed into assets addenda, financial declaration forms and the like the better (as a minimum, you should provide your evaluator with the basic information about incomes, expenses, assets, and debts). 

As far as information about the “client’s backstory/marital history”, some abbreviated memorandum on the salient points of the parties’ marriage and separation may be useful to your ENE evaluator, and especially if you are engaging in a pre-commencement early neutral evaluation. Otherwise, in a post-commencement ENE, the pleadings and orders (and clients’ affidavits) which you send to your evaluator may suffice.

Q. Is it possible to anticipate the concerns of the lawyers and parties alike?

Clients need to be prepared to make decisions in situations in which there has likely not been full, and maybe not even any, formal pretrial discovery (possible, but not likely given the now ubiquitous use of Rule 25, SCRFC).  The lawyer needs to assess in advance whether their client is going to require more information to be able to make a decision.  Or, the lawyer needs to be prepared to advise the client on how additional information would be beneficial/not necessarily pertinent.  The ENE evaluators are helpful as “back-up” on this.  They can opine on the impact of certain additional evidence (such as the opinion of a forensic accountant, report of a private investigator, etc).

One anticipated difficulty for the family law attorney will be assuaging “the tug of the malpractice demon” on her or his shoulder (for example, “have you advocated sufficiently with enough information that addresses all of your clients concerns”?).  As mentioned above, because an ENE evaluator can talk about the impact of that information, it may be a more conducive setting than mediation to address all of these issues. 

As with any case, either a pre-filing one or a post-commencement one, making long-lasting decisions require both “knowledge and information” – but not necessarily perfect knowledge, because the “perfect” may be unachievable (e.g., only cash has, at any moment in time, a “perfect value”).  Nevertheless, the “timing” of your ENE is also critical, because your ENE evaluators should never allow the attorneys and the parties to move forward with their decisionmaking based upon “guesswork” and the “overwhelming urge to end the pain” caused by the anguish of divorce.  And in that scenario, your ENE evaluators should use that time by (1) informing the parties and attorneys as to what your family court judges most probably would need to review, (2) and thereby creating a template for you to use in a second ENE session, and (3) by professionally and ethically “tamping down” that urgency to settle the case at all costs.

Q. Is ENE appropriate even when it is no longer “early” in the case?  Or, is anything “pretrial” considered early?

The abbreviated answer – but the correct one – is that ENE can be effective at any stage of the litigation or anticipated future litigation. “Early neutral evaluation” was placed within the ADR Rules for the precise purpose of serving an effective purpose of “conflict resolution” at any point in time.

Q. How does a family law attorney identify what case might benefit the most from an early neutral evaluation?

Probably any case in which even the “calculated risks” are simply too high to take to trial, including the risks of damage to the client’s reputation or where the trial/litigation costs could likely exceed any possible beneficial result from a court’s trial ruling. Maybe even a case in which you need to determine whether trial is worth the risk? Furthermore, and arguably, any case subject to an eventual mediation process stands a higher probability of resolution utilizing early neutral evaluation.

Q. Does ENE satisfy the mediation requirement if no agreement is reached?

Absolutely.  And here is the applicable excerpt from SCADR Rule 17(e), which essentially tracks the ADR Rule for mediations:  “17(e)  Reporting Results of the Early Neutral Evaluation. Within ten days of conclusion of the early neutral evaluation, as set forth in Rule 7(f), the evaluator shall file with the clerk of court proof of ADR on a form approved by the Supreme Court or its designee. South Carolina Court Administration or the South Carolina Commission on Alternate Dispute Resolution may require the evaluator to provide additional statistical data for evaluation of the program.”