This two-part series explores Colorado Rule of Civil Procedure 16.1: Simplified Procedure. Part One of this series presented an overview of Simplified Procedure and explained how it works in practice. In Part Two of this series, we look at some of the pros and cons of the process. Then, we explain how to “opt-in” or “opt-out” of Simplified Procedure.
The Benefits of Simplified Procedure
Potential Cost Savings
Perhaps the number one benefit of Simplified Procedure is the potential cost savings. Simplified Procedure was initiated because of concerns around the rising costs of civil litigation, and discovery in particular. By cutting out discovery (and its corresponding motions practice), the parties can save a significant amount over the course of the lawsuit.
Defendants might decide not to opt out of Simplified Procedure in a case where it otherwise applies, in order to give some predictability to the risk of the litigation. Under Simplified Procedure cases, judgments will not be over $100,000, including any shifting attorney fees. While Simplified Procedure is not always a cost savings, it may end up being one in some cases. Remember, judgment limits do not apply if you are opting into Simplified Procedure, as explained below. When the parties opt-in to Simplified Procedure (meaning the monetary judgment sought was over $100K in the first place), the damages are not capped because of the Rule.
Access to Justice
It is no secret. Litigation is expensive. For cases that are worth too much for small claims or county court, but not enough to justify the legal fees that will rack up during the normal course of litigation, Simplified Procedure helps give clients with smaller matters access to the district courts. This is a real merit of Simplified Procedure. Unfortunately, whether a case proceeds under Simplified Procedure is not entirely up to the initiating party. An unwilling defendant can force the case back under normal procedure—it only takes one party to opt-out. Filing a lawsuit in reliance on the cost savings associated with Simplified Procedure is a bit risky.
Cases under Simplified Procedure are supposed to receive priority when setting hearing or trial dates. Potentially resolving a case more quickly is an advantage.
The Potential Downfalls of Simplified Procedure
No (or Limited) Discovery
Simplified Procedure’s main selling point is little to no discovery. While this can be a cost-saving measure, it can also be a limitation in cases where obtaining information through discovery is key. Without discovery, some cases may be disadvantaged. This is a strategic consideration. However, cases proceed to trial just on disclosures in the criminal context, and some say that litigants seriously overestimate how much discovery makes a difference in the case. Carefully analyze the case to decide just how much of a difference normal discovery may make. And it is possible to ask the court for limited discovery on certain important points, especially if the other side is uncooperative in its disclosures.
Still Relatively Unknown
Despite being around for the past ten plus years, Simplified Procedure is still relatively unfamiliar to many litigants and lawyers. It is different from the norm, and that can be scary. If you are using it for the first time, you have a learning curve to figure out what you need to do (or what you don’t have to do) in order to comply with all its requirements. Sometimes, opposing counsel is unfamiliar with how to proceed under Simplified Procedure, and it may be difficult to keep things moving along the right track.
Finally, in some cases, proceeding under Simplified Procedure can result in a limited damages award. Just as this might be a blessing for Defendants, it can be a pitfall for the unwary Plaintiff. This is particularly the case when shifting attorney fees are at issue and the amount of damages is close to the threshold amount. Remember, cases proceeding under Simplified Procedure as a matter of course are limited to $100,000 in damages. Even if a jury awards more, the court will reduce the award accordingly. This can be a disadvantage to be aware of when deciding how to proceed. When a case is initiated, a civil cover sheet must be filed at the outset indicating whether the claims against any party exceed $100,000. This may be somewhat challenging to do at the beginning of litigation when the full extent of damages (including any shifting attorney fees) remains unknown. But it is important to carefully consider this question due to this potential pitfall. While no party can unilaterally force Simplified Procedure, if the damages are likely to be more than $100,000, a party can so indicate and then attempt to obtain a stipulation from all parties to opt-in to Simplified Procedure. If all parties opt-in, the damages would not be capped. Deciding whether or not to proceed under Simplified Procedure is a tactical decision. Litigants and their attorneys should treat the decision as strategic and analyze it carefully in each case, rather than simply defaulting to the familiar.
How to Proceed (or Not) Under Simplified Procedure
After conducting your strategic analysis, here is what you need to know to go forward with Simplified Procedure.
For cases proceeding by default under Simplified Procedure, a party need not “opt-in.” Filing the Civil Cover Sheet (which is mandatory), and indicating the case is proceeding under Simplified Procedure is all that is required. In cases where the amount is over $100,000, parties can opt-in. Opting-in is not available for cases that are specifically excluded (like class actions, domestic relations, and juvenile cases). But in cases where the monetary judgment sought is (or could be?) more than $100,000, but both parties have agreed to Simplified Procedure, they can file a stipulation to proceed under Simplified Procedure. This will require a bit of consultation with opposing counsel, but there is time to do so under the Rule. The ultimate decision to opt-in needs to be made within 49 days after the case is at issue.
If it appears the cons outweigh the pros, you can choose to opt-out of Simplified Procedure and just proceed under the normal rules. In order to do that, you must file the appropriate notice: JDF Form 602, Notice to Elect Exclusion from C.R.C.P. 16.1 Simplified Procedure. The notice must be filed within 35 days after the case is at issue. It must be signed personally by the party itself, as well as by the attorney for the party, if represented. Once the notice is filed, the case will proceed under Rule 16’s standard procedure.
Finally, the Rule has an “escape-hatch” of sorts. If a case is governed by Simplified Procedure, but it turns out the restrictions associated with the rule are really disadvantaging a party, or making the case difficult to handle, a court has discretion to switch back to normal procedure. This option is available any time prior to trial, but Rule 16.1(l) does have a particularly exacting standard that must be met to make the mid-stream switch.
When used well, Simplified Procedure can help your case strategically and financially. It is worth considering as an option.
Featured Image: ”3d Man” by Pixabay.
More articles in this series: Part 1
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- A Blockbuster Term for Business: Highlights from the U.S. Supreme Court’s October 2017 Term
- Malpractice Insurance and the Importance of Sound Business Practices
- U.S. Supreme Court Rules for Colorado Baker: Answering Questions About the Masterpiece Cakeshop Case
- Curry v. Zag Built LLC: Colorado Court of Appeals Talks Procedure in Construction Defect Cases