Promptly upon commencement of a matter, outside counsel should prepare a Case Plan that sets forth the major steps to be taken to accomplish asset recovery, or successful defense or prosecution of a case. It should outline the anticipated course of litigation on the assumption that it will go to trial and propose a plan for settlement, unless settlement is clearly inappropriate.

Requirements for Case Plans will vary considerably, depending upon the complexity, size and anticipated duration of the matter. The scope and detail of the Case Plan should be commensurate with the significance of the matter. The Case Plan should summarize strategy and project the schedule for preparing and trying the case, including all expected litigation events. Expensive or time consuming activities should be divided into subparts. For example, adequate detail should be provided about discovery to be taken, issues requiring extensive research, or anticipated defenses that may complicate the litigation.

The Case Plan should also summarize strategy to achieve a negotiated settlement of the case with emphasis on opportunities for early resolution. Outside counsel also should consider whether cost savings can be achieved by resolving the matter through alternative dispute resolution ("ADR"), as discussed below.

It is the responsibility of outside counsel to make certain that a Case Plan is appropriate for the particular matter and is provided to the FDIC supervising attorney prior to incurring any associated costs.

If outside counsel is handling a number of cases that are routine and involve similar issues or approaches it may elect to develop and to submit a standard Case Plan applicable to all such cases. Once a standard Case Plan has been approved by the FDIC supervising attorney, outside counsel thereafter may indicate that substantially similar routine cases generally will follow that plan, noting, when appropriate, factors that are different.

Working with the Legal Division and/or other FDIC offices, outside counsel should prepare a written budget in conjunction with the Case Plan. A more detailed budget is required for cases where the fees are expected to exceed $25,000, or otherwise as requested by the FDIC supervising attorney. The budget is intended to translate the Case Plan into financial expectations. The form of the budget will depend on the nature and amount of the matter and the issues involved. At a minimum, the detailed budget should set forth major assumptions, conform to the Case Plan, identify specific phases of a case, and estimate the cost of each phase.

Upon referral, outside counsel also may be required to submit a variety of management information on forms that will be provided at that time. Such information may include estimates of the value of the asset or claims; information about defensive litigation and (normally with the Case Plan) estimates of legal fees and expenses to judgment or other completion; the date judgment or completion is expected; and the probability of success, stated as a percentage.

These estimates are used on an ongoing basis by the FDIC to assess cost-effectiveness and to measure progress. The Legal Division recognizes that estimates may be affected by changed circumstances; but, because the estimates are utilized in making business judgments, they must be as accurate as possible.

Outside counsel must obtain the Legal Division's written approval for any increase in the total budget amount. Failure to do so will be deemed a serious breach of the outside counsel's duty to the FDIC, and may result in non-payment or disallowance of fees or expenses exceeding authorized amounts. Outside counsel must immediately report to the FDIC supervising attorney such anticipated changes to the budget.

Occasionally, the Legal Division has experienced situations in which an estimate of the probability of success was substantially reduced shortly before trial, but long after discovery had been completed. This indicates that the original estimate was unduly optimistic or otherwise not well-developed. Failure to timely detect and correct such deficiencies impairs the ability of the FDIC to make informed business judgments. It would be unusual for the Legal Division to refer additional matters to outside counsel who had made such errors.

For matters previously referred to outside counsel by the RTC or for FRF matters referred to outside counsel by the FDIC, outside counsel should refer to the "RLIS Forms and Procedures Deskbook for Outside Counsel" for budgeting and billing procedures applicable to such matters.

Review by Legal Division Attorneys

The FDIC supervising attorney may review any filing, including routine filings dealing with simple collection matters, to ensure appropriate treatment of issues or the different capacities of the FDIC. Unless otherwise instructed by the FDIC supervising attorney, outside counsel must submit drafts of all substantivepleadings and filings, particularly those dealing with any "special issues" listed in Appendix C to this Guide, to the FDIC supervising attorney for such pre-filing review. The submission should be sufficiently in advance of any response or filing deadline to allow adequate opportunity for review usually one week or as directed by the FDIC supervising attorney.

The FDIC supervising attorney may determine that a pre-filing review is no longer necessary; but, unless the FDIC supervising attorney so advises, outside counsel should observe this review requirement.

On filing a complaint or answer in any case, or upon referral of a pending case from another firm, outside counsel must report the court docket number, the state in whichthe case is pending or is to be filed, and the forum and venue to the FDIC supervising attorney. Pursuant to 12 U.S.C. 1819(b)(4), the FDIC is not required to pay filing fees or post any bond to pursue an appeal in United States District Courts or Courts of Appeal.

Outside counsel always should send copies of all correspondence, pleadings and other filings on matters for the FDIC to the FDIC supervising attorney promptly upon receipt by outside counsel. They should not be sent to any other person at the FDIC unless you have been requested to do so or there is a specific request for action by that person.

Litigation or Related Strategies

Discovery

If outside counsel receives notices of depositions of employees of the FDIC, or other Federal or state agencies, or subpoenas or requests for production of documents that were generated by the FDIC or the RTC, or other Federal entities, you must immediately contact the FDIC supervising attorney to obtain all requisite authorizations and instructions for coordination of a response. Similarly, outside counsel should consult with the FDIC supervising attorney prior to contacting employees of the FDIC or other Federal entities, or to obtaining documents generated by another Federal entity.

Alternative Dispute Resolution

The FDIC is committed to the use of alternative dispute resolution (ADR) in appropriate cases. The FDIC views such techniques as potentially less costly, more timely, and a more effective means of facilitating negotiated settlements. Thus, throughout the course of a lawsuit outside counsel is required to periodically review the case to determine whether ADR is appropriate and to explore all opportunities for utilizing non-judicial dispute resolution approaches. Generally, the Division does not favor the use of binding ADR, preferring non-binding approaches, such as mediation or "mini-trials." When settlement negotiations reach an impasse, particularly if technical or factual issues are central to a dispute, the use of ADR and a third-party neutral should be considered.

Claims between FDIC controlled institutions (including receiverships, conservatorships, acquired or assisted institutions, asset servicers, and bridge banks) must immediately be brought to the attention of the FDIC supervising attorney. These claims must be resolved through the use of the FDIC's internal ADR program unless otherwise directed by the FDIC supervising attorney. Costs incurred in the unauthorized litigation of such claims may be disallowed.

Settlement

The settlement possibilities of each matter should be identified and considered early in the proceedings and at each stage thereafter. Cases should be settled as early as practicable under the circumstances. Outside counsel will be asked to evaluate the likelihood of success and related matters with the FDIC supervising attorney on an ongoing basis so FDIC business representatives will have current information on which to base their business judgments.

Generally, FDIC supervising attorneys are involved in settlement discussions. Outside counsel should communicate all settlement offers, including any deadlines imposed, to the FDIC supervising attorney as soon as practicable. Such communications may be oral unless the FDIC supervising attorney instructs otherwise.

Outside counsel should advise the opposing party, their counsel, and the court, as appropriate, that the FDIC supervising attorney will review all settlement offers or bankruptcy plans with the appropriate FDIC business representatives and obtain necessary decisions. The time needed to obtain authority to accept or reject a settlement offer may vary. Outside counsel should provide sufficient notice to the Legal Division to secure FDIC pre-approved settlement authority for court ordered mediation.

The Legal Division generally assesses proposed settlements on the likelihood of success and the likely net economic recovery, taking into account, among other factors, the cost of litigation and the amount and collectability of a judgment, using net present value analysis.

In most cases, the Division will not consider an offer to settle a matter for less than the full amount claimed without verified financial information, on the approved form which will be furnished by the FDIC supervising attorney. The debtor's disclosure statement and any other available financial information should be supplied in connection with the submission of a bankruptcy plan.

Attach to any settlement offer a description of any material changes that relate to acceptance of the offer (e.g., a change in your estimate of success or timing). If there are no such changes since your last status report, so state. Do not prepare a detailed analysis of the settlement offer unless specifically requested to do so. Outside counsel's recommendation(s) will be given weight in the decision-making process, but the FDIC retains the authority to accept or reject a settlement offer.

Referral of Criminal Misconduct

The Legal Division has a responsibility to notify and, where appropriate, to assist law enforcement officials in investigating conduct that may constitute a violation of criminal statutes. Outside counsel must immediately forward any information that indicates possible criminal behavior to the FDIC supervising attorney. The FDIC supervising attorney may either file a criminal referral form with the assistance of outside counsel, or instruct outside counsel to do so under Legal Division guidelines. In the event outside counsel prepares a criminal referral, a copy of the referral shall be furnished promptly to the FDIC supervising attorney.

The FDIC does not have authority or responsibility for instituting, conducting, or disposing of criminal proceedings. As a matter of policy, the settlement of civil litigation on behalf of the FDIC may not, expressly or by implication, extend to the disposition of any criminal charges or recommendations with respect to such charges. Furthermore, in conducting civil litigation, including settlement negotiations, outside counsel is not authorized to agree to withhold from law enforcement authorities any information relating to a possible criminal violation or investigation.

Appeals

Outside counsel must promptly notify the FDIC supervising attorney of any adverse ruling so a decision can be made regarding appeal. No appeal shall be taken by outside counsel without the prior approval of the Division, although outside counsel is expected to take all steps necessary to protect the interests and preserve appeal rights of the FDIC pending a decision to appeal.