Settlement Agreement Enforceability

It is a common practice in settlement agreements providing for payments over time to include a provision for entry of a stipulated judgment in the event of default, in an amount greater than the balance of the payments due. This provides an obvious incentive to make the payments that the parties have agreed upon. Many attorneys seem unaware that these provisions are probably unenforceable. In Greentree Financial Group, Inc. v. Execute Sports, Inc., 163 Cal.App.4th 495 (4th Dist. 2008), the court reaffirmed a fairly longstanding but somewhat obscure precedent holding that such provisions should be viewed as penalties and cannot be enforced.

I do not expect these provisions to disappear, however. When I recently mentioned to a settlement judge that these kinds of arrangements are unenforceable, he told me that he would not stop advocating them, since they still provide some incentive to perform the agreement (by the paying party), and therefore give some comfort to the receiving party, so they are still helpful to him in concluding settlements. So much for the power of the courts of appeal to affect practice.

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Law and the Brain

Our knowledge of how the brain works has expanded dramatically. I tried to catch up with some of this research at the conference mentioned in the post below, whose main topic was how the legal profession, specifically mediators, can make use of the latest discoveries about the brain. It is really interesting to scientists to find out which parts of the brain light up during various kinds of activity, but is it possible for lawyers deliberately to stimulate the parts that will persuade juries to think favorably about their clients? Can mediators employ techniques used by brain researchers to boost the levels of brain chemicals that are conducive to obtaining a settlement?

It is interesting, for example, to learn that research has verified that humans are more guided by their emotions than their reasoning ability, but the best trial lawyers have always known this, even if they were not aware of which parts of the brain were responding to emotional arguments and which to logic. Clarence Darrow was famous for making the jurors and spectators weep during his closing arguments. These were not appeals to logic, but to emotion.

What may be even more interesting than knowing how brains typically react, is knowing how to manipulate the way brains can respond to various stimuli. I heard a lecture by Dr. Jeffrey Schwartz, and later picked up his book The Mind and the Brain in which he talks about how we can not only direct our brains to use logic to overcome instinct, but can also expand the areas of the brain devoted to the tasks that we practice. (My terminology may not be the same as neuroscientists, but hopefully I am getting across similar ideas.) Schwartz described an experiment in which people were shown pictures of gruesome car accidents, and taught to overcome their natural inclination to react with disgust or fear. They did that by trying to look at these pictures as if they were emergency medical technicians with a job to do. When they re-evaluated the same information with these instructions, researchers, using imaging technology, could see the subjects activating higher order mental processes instead of more basic "fight or flight" responses.

Often lawyers must deal with people's emotions, either to exploit them for the purpose of pleading a client's case, or to overcome these emotions for the purpose of getting a client or adversary or fact finder to look at the facts from a more logical viewpoint. The ability to encourage people to concentrate their minds on the facts of a case from various perspectives, which is an important part of what we do at trial, seems to be a powerful tool. Science seems to back up what the most skilled practitioners have known for a long time about techniques that are persuasive.

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