Other Settlement Procedures

(a) Order Authorizing Other Settlement Procedures. Upon receipt of a motion by the parties seeking authorization to utilize a settlement procedure in lieu of a mediated settlement conference, the senior resident superior court judge may order the use of the procedure requested under these rules or under local rules, unless the court finds that the parties did not agree on all of the relevant details of the procedure, including the items in Rule 1(c)(2), or that, for good cause, the selected procedure is not appropriate for the case or the parties. (b) Other Settlement Procedures Authorized by These Rules. In addition to a mediated settlement conference, the following settlement procedures are authorized by these rules: (1) Neutral evaluation under Rule 11 (a settlement procedure in which a neutral offers an advisory evaluation of the case following summary presentations by each party). (2) Nonbinding arbitration under Rule 12 (a settlement procedure in which a neutral renders an advisory decision following summary presentations of the case by the parties). (3) (4) Binding arbitration under Rule 12 (a settlement procedure in which a neutral renders a binding decision following presentations by the parties). A summary trial (jury or non-jury) under Rule 13 (a settlement procedure that is either: (i) a nonbinding trial in which a privately procured jury or presiding officer renders an advisory verdict following summary presentations by the parties and, in the case of a summary jury trial, a summary of the law presented by a presiding officer; or (ii) a binding trial in which a privately procured jury or presiding officer renders a binding verdict following summary presentations by the parties and, in the case of a summary jury trial, a summary of the law presented by a presiding officer). (c) General Rules Applicable to Other Settlement Procedures. (1) When Proceeding Is Conducted. Other settlement procedures ordered by the court under these rules shall be conducted no later than the date for completion set out in the court’s original mediated settlement conference order, unless extended by the senior resident superior court judge. (2) Authority and Duties of the Neutral. a. Authority of the Neutral. 1. Control of the Proceeding. The neutral, arbitrator, or presiding officer shall at all times be 29 TOC Rule 10 2. in control of the proceeding and the procedures to be followed. Scheduling the Proceeding. The neutral, arbitrator, or presiding officer shall attempt to schedule the proceeding at a time that is convenient to the participants, attorneys, and the neutral. In the absence of agreement, the neutral shall select the date for the proceeding. b. Duties of the Neutral. 1. Informing the Parties. At the beginning of the proceeding, the neutral, arbitrator, or presiding officer shall define and describe for the parties: i. ii. iii. iv. v. the process of the proceeding; the differences between the proceeding and other forms of conflict resolution; the costs of the proceeding; the inadmissibility of conduct and statements as provided by N.C.G.S. § 7A-38.1(l) and subsection (c)(6) of this rule; and the duties and responsibilities of the neutral and the participants. Disclosure. The neutral has a duty to be impartial and to advise all participants of any circumstances bearing on possible bias, prejudice, or partiality. Reporting Results of the Proceeding. The neutral, arbitrator, or presiding officer shall report the results of the proceeding to the court using a Report of Neutral Conducting Settlement Procedure Other Than Mediated Settlement Conference or Arbitration in Superior Court Civil Action, Form AOC-CV-817. The NCAOC may require the neutral to provide statistical data for evaluation of other settlement procedures. Scheduling and Holding the Proceeding. It is the duty of the neutral, arbitrator, or presiding officer to schedule and conduct the proceeding prior to the completion deadline set out in the court’s order. The deadline for completion of the proceeding shall be strictly observed by the neutral, arbitrator, or presiding officer, unless the deadline is changed 30 2. 3. 4. TOC Rule 10 by a written order of the senior resident superior court judge. (3) Extensions of Time. A party or a neutral may request that the senior resident superior court judge extend the deadline for completion of the settlement procedure. The request for an extension shall state the reasons the extension is sought and shall be served by the movant on the other parties and the neutral. If the court grants the motion for an extension, then the order shall set a new deadline for the completion of the settlement procedure. A copy of the order shall be delivered to all parties and the neutral by the person who sought the extension. (4) Where the Proceeding Is Conducted. The neutral, arbitrator, or presiding officer shall be responsible for reserving a place agreed to by the parties, setting a time for and making other arrangements for the proceeding, and for giving timely notice to all attorneys and unrepresented parties in writing of the time and location of the proceeding. (5) No Delay of Other Proceedings. Settlement proceedings shall not be the cause for a delay of other proceedings in the case, including, but not limited to, the conduct or completion of discovery, the filing or hearing of motions, or the trial of the case, except by order of the senior resident superior court judge. (6) Inadmissibility of Settlement Proceedings. Evidence of statements made and conduct that occurs in a mediated settlement conference or other settlement proceeding conducted under this rule, whether attributable to a party, mediator, neutral, or neutral-observer present at the settlement proceeding, shall not be subject to discovery and shall be inadmissible in any proceeding in the action or another civil action involving the same claim, except: a. b. c. d. in proceedings for sanctions under subsection (c) of this rule; in proceedings to enforce or rescind a settlement of the action; in disciplinary proceedings before the North Carolina State Bar or any agency established to enforce the Standards of Professional Conduct for Mediators or standards of conduct for other neutrals; or in proceedings to enforce laws concerning juvenile or elder abuse. 31 TOC Rule 10 As used in this subsection, “neutral observer” includes persons seeking mediator certification, persons studying dispute resolution processes, and persons acting as interpreters. No settlement agreement to resolve any or all issues reached at a proceeding conducted under this rule, or during its recesses, shall be enforceable, unless the agreement has been reduced to writing and signed by the parties or by the parties’ designees. No evidence otherwise discoverable shall be inadmissible merely because it is presented or discussed in a conference or other settlement proceeding. No mediator, neutral, or neutral-observer present at a settlement proceeding shall be compelled to testify or produce evidence in any civil proceeding concerning statements made and conduct that occurs in anticipation of, during, or as a follow-up to a conference or other settlement proceeding under subsection (c) of this rule. This includes proceedings to enforce or rescind a settlement of the action, except to attest to the signing of any agreements, and during proceedings for sanctions under this section, proceedings to enforce laws concerning juvenile or elder abuse, and disciplinary hearings before the North Carolina State Bar or any agency established to enforce the Standards of Professional Conduct for Mediators or standards of conduct for other neutrals. (7) No Record Made. There shall be no record made of any proceedings under these rules, unless the parties have stipulated to binding arbitration or a binding summary trial, in which case any party, after giving adequate notice to opposing parties, may make a record of the proceeding. (8) Ex Parte Communications Prohibited. Unless all parties agree otherwise, there shall be no ex parte communication prior to the conclusion of the proceeding between the neutral and a party or a party’s attorney on any matter related to the proceeding, except about administrative matters. (9) Duties of the Parties. a. Attendance. All persons required to attend a mediated settlement conference under Rule 4 shall attend any other nonbinding settlement procedure authorized by these rules and ordered by the court, except those persons to whom the parties agree and the senior resident superior court judge excuses. Those persons required to attend other settlement procedures which are binding in nature, authorized by these rules, and ordered by the court, shall be those 32 TOC Rule 10 persons to whom the parties agree. Notice of the agreement shall be given to the court and the neutral by filing a Motion to Use Settlement Procedure Other Than Mediated Settlement Conference in Superior Court Civil Action and Order, Form AOC-CV-818. b. Finalizing Agreement. 1. 2. 3. If an agreement that resolves all issues in the dispute is reached at the neutral evaluation, arbitration, or summary trial, then the parties to the agreement shall reduce the terms of the agreement to writing and sign it. A consent judgment or voluntary dismissal shall be filed with the court by such persons as the parties shall designate within fourteen days of the conclusion of the proceeding or before the expiration of the deadline for its completion, whichever The person is responsible for filing closing documents with the court shall also sign the report to the court. The parties shall give a copy of their signed agreement, consent judgment, or voluntary dismissal to the neutral, arbitrator, or presiding officer, and all parties at the proceeding. later. is reached prior to If an agreement that resolves all issues in the the evaluation, dispute arbitration, or summary trial, or while the proceeding is in recess, then the parties shall reduce the terms of the agreement to writing and sign the writing and shall file a consent judgment or voluntary dismissal disposing of all issues with the court within fourteen days of the agreement or before the expiration of the deadline for completion of the proceeding, whichever is later. A designee may sign the agreement on behalf of a party only if the party does not attend the evaluation, arbitration, or summary trial in person and the party provides the neutral with a written verification that the designee is authorized to sign the agreement on the party’s behalf. 4. When an agreement is reached upon all issues in the dispute, all attorneys of record must notify the senior resident superior court judge within four business days of the settlement and advise the judge 33 TOC Rule 10 of the persons who will sign the consent judgment or voluntary dismissal. c. Payment of the Neutral’s Fee. The parties shall pay the neutral’s fee as provided by subsection (c)(l2) of this rule. procedure (10) Selection of Neutrals in Other Settlement Procedures. The parties may select any person to serve as a neutral in a rules. authorized settlement For arbitration, the parties may either select a single arbitrator or a panel of arbitrators. Notice of the parties’ selection shall be given to the court and to the neutral by filing a Motion to Use Settlement Procedure Other Than Mediated Settlement Conference in Superior Court Civil Action and Order, Form AOC-CV-818, within twenty-one days after the entry of the order requiring a mediated settlement conference. under these The motion shall state: (i) the name, address, and telephone number of the neutral; (ii) the rate of compensation of the neutral; and (iii) that the neutral and opposing counsel have agreed upon the selection and compensation. (11) Disqualification. Any party may move the resident or presiding superior court judge of the district in which an action is pending for an order disqualifying the neutral and, for good cause, an order disqualifying the neutral shall be entered. Good cause exists if the selected neutral has violated any standards of conduct of the North Carolina State Bar or any standards of conduct for neutrals adopted by the Supreme Court. (12) Compensation of the Neutral. A neutral’s compensation shall be paid in an amount agreed to by the parties and the neutral. Time spent reviewing materials in preparation for the neutral evaluation, conducting the proceeding, and making and reporting the award shall be compensable time. Unless otherwise agreed by the parties or ordered by the court, the neutral’s fee shall be paid in equal shares by the parties. For purposes of this section, multiple parties shall be considered one party when they are represented by the same counsel. The presiding officer and jurors in a summary jury trial are neutrals within the meaning of these rules and shall be compensated by the parties. (13) Sanctions for Failure to Attend Other Settlement Procedure or Pay the Neutral’s Fee. Any person required to attend a settlement proceeding or to pay a neutral’s fee in compliance with N.C.G.S. § 7A-38.1 and these rules who fails to attend the proceeding or pay the neutral’s fee without good cause 34 TOC Rule 10 shall be subject to the contempt power of the court and any monetary sanctions imposed by a resident or presiding superior court judge. The monetary sanctions may include, but are not limited to, the payment of fines, attorneys’ fees, the neutral’s fee, expenses, and loss of earnings incurred by persons attending the proceeding. A party seeking sanctions against a person or a judge, upon his or her own motion, shall do so in a written motion stating the grounds for the motion and the relief sought. The motion shall be served on all parties and any person against whom sanctions are being sought. If the court imposes sanctions, it shall do so after giving notice to the person, holding a hearing, and issuing a written order that contains both findings of fact that are supported by substantial evidence and conclusions of law. History Note. 373 N.C. 663; 378 N.C. 757; Order Dated 11 December 2024.