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The art of settlement, Prince Andrew edition

(Reuters) – Knowing when to hold ‘em and when to fold ‘em is more than gambling advice from the late Kenny Rogers. It’s a key decision in high-stakes litigation. Kidding aside, consider the settlement reached Tuesday in the sex abuse lawsuit against Britain’s Prince Andrew by Virginia Giuffre.

The terms are confidential, but the deal included an agreement by the Duke of York to make a “substantial donation” to Giuffre’s charity in support of victims’ rights, as well as an acknowledgment by Andrew that Giuffre “has suffered both as an established victim of abuse and as a result of unfair public attacks.” He will also pay Giuffre an undisclosed sum. He made no admission of wrongdoing. It’s not surprising that the case, which was filed in Manhattan federal court six months ago, settled.

Even before the pandemic, less than 1% of federal civil cases were resolved by juries. Almost invariably then, the question is not if a case settles, but when. So why now? Without being privy to the inside machinations of this litigation, are there some common elements or inflection points that often pave the way to reaching a deal? A trio of prominent litigators — Daralyn Durie of Durie Tangri; Michael Attanasio of Cooley; and Sharon Nelles of Sullivan & Cromwell — shared their insights via email with me.

While Durie said she has not paid close attention to the Prince Andrew case, she noted that depositions can be “critical inflection points.” “I wouldn’t be surprised if a huge driver was his desire to avoid a deposition,” Durie told me. “You’d be surprised how many cases settle before a CEO or other C-Suite deposition because the individual just doesn’t want to deal with it and is willing to authorize a settlement to avoid it.” Andrew, 61, was scheduled to be deposed on March 10 in London, according to a report by my Reuters colleagues.

Giuffre, 38, is represented pro bono by a team of lawyers from Boies Schiller Flexner led by David Boies, whose career highlights include a devastating three-day deposition of Bill Gates in the U.S. government’s Microsoft antitrust case. Boies through a spokeswoman declined comment. Andrew’s lawyer Andrew Brettler of Lavely & Singer did not respond to a request for comment. Durie noted that reaching a settlement often “comes down to a willingness to show your cards (or not).

I have gone into a mediation and given what amounted to a 45-minute closing argument that was designed to show the other side what our case would look like and how bad their witnesses would look.” Such a strategy can be very effective, she said, but the drawback is that if you don’t manage to reach a deal, you’ve given opposing counsel a preview of your case. “I wonder how much the Prince Andrew legal team put their cards on the table to give a sense of what his defense would look like — and whether they had an attack strategy relative to the plaintiff and how robust that was,” she said. On Feb. 14, the British press reported that Andrew’s lawyers were pressing Giuffre to produce the original version of the infamous 2001 photo showing the prince, his arm around the then-17-year-old’s waist, but that she may not still possess the photo. Andrew in a 2019 BBC interview said he had no recollection of meeting Giuffre and questioned the photo’s authenticity. The Duke of York’s lawyers in October called Giuffre’s lawsuit “baseless” and said that she was seeking “another payday.” Giuffre in her complaint focused on the prince’s friendship with Jeffrey Epstein, who she said also abused her.

Epstein died in prison while awaiting trial on sex trafficking charges. Giuffre alleged that was forced to have sex with Andrew when she was a teenager at Epstein’s mansion in Manhattan, Epstein’s private island in the U.S. Virgin Islands and at the London home of Epstein associate Ghislaine Maxwell. Cooley’s Attanasio told me that he’s found “the best time for settlement is when there is a material shift in the risk profile of the case for one or both sides.” The chair of Cooley’s global litigation department, he said that this “may come from a ruling on a key motion, admissions during a deposition, or even the escalating expense of the litigation.” “I think the key for counsel is not to miss these openings — either on offense or defense — and to be prepared to discuss them with the client in real time,” Attanasio said.

“In the Prince Andrew situation, it certainly appears that the grind of the case and the rulings allowing it to proceed effectuated this type of shift and possibly led to the settlement.” U.S. District Judge Lewis Kaplan in the Southern District of New York on Jan. 12 refused to dismiss the case and said the trial could begin between September and December 2022. Nelles, who is managing partner of Sullivan & Cromwell’s litigation group, said she’s found the time is ripe to settle when “the needs of one party and the willingness of the other intersect like a Venn diagram, when each side has something to gain and something to lose. In those moments, settlement is possible.”

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