EDWARDSVILLE – In the universe of litigation, a world exists where time stands still.
Possible plaintiffs and defendants enter into it through tolling agreements that suspend statutes of limitations until a specific date.
The agreements allow informal discovery without public record.
Parties can resolve disputes, renew the agreements, or proceed to court.
Asbestos lawyer Randy Gori opened a window into this world in October, when he disputed a report that he stopped suing Chicago manufacturer Avocet.
The suits stopped after he and Avocet settled a motion to sanction him for naming Avocet as a defendant without any basis in fact.
“We have a tolling agreement with Avocet now and do not have to sue them for them to be in the litigation,” Gori stated.
“They have settled a number of cases with us since the sanction motion has been dismissed and continue to negotiate and settle with us.”
Avocet declined to comment for this story.
Tolling agreements rarely find their way into public record.
An online search brings up one from a securities action in the District of Columbia and one from Florida over stucco falling from a county building.
A search also brings up a notice from a trust of bankrupt asbestos defendant Congoleum pertaining to agreements prior to 2004.
An article by Stephan Mihalovits of the Lewitt Hackman firm in Encino, Calif., found reasons for both sides to execute the agreements.
“Typically, neither side wants to spend energy and money proving their case in court,” Mihalovits wrote.
“Thus, a tolling agreement pushes the parties towards compromising their positions and settling…A potential plaintiff can use this as an advantage, since a potential defendant may well bend over backwards to avoid being sued.”
He also wrote that a potential plaintiff could capitalize on a defendant’s anxiety by requesting production of documents and answers to questions.
“A defendant may also benefit from the process by becoming better informed about the plaintiff’s claims and positions,” Mihalovits wrote.
“The possibility remains that parties won’t be able to work it out, and a plaintiff may choose to file suit.
“If so, the time spent in negotiations can provide a valuable, less expensive head start.”
Randy Johnston, offering advice to plaintiff lawyers for Texas Law, argued that delay favors defendants.
He painted a picture of a client telling a story that might settle without two years of discovery if a lawyer could present it properly.
He wrote that if the lawyer recognizes that limitations may run in the near future, the lawyer could file an immediate lawsuit.
“But you also could approach the defendants about a tolling agreement to prevent the running of limitations while you and the defendant explore the possibility of settlement without the public filing of a lawsuit,” Johnston wrote.
He wrote that a plaintiff should reserve a right to sue during the tolling period.
“If insurance is involved, your defendant will have to secure approval from the insurance company before signing,” he wrote.
“Plan for a week or two of negotiations when you present the tolling agreement so you are not trapped by a defendant who ‘agrees in principle’ but nitpicks your agreement to death while the clock keeps running.”
According to legal malpractice insurer ALPS, a tolling agreement never benefits a defendant attorney.
Its report states that the attorney’s defense evidence can become stale.
“Witness memories fade, files can get misplaced, computer systems changed without recovering all the data,” the report states.
It states that a tolling agreement gives plaintiff’s counsel leisurely time to work up a theory of recovery.
It states that tolling agreements rarely prevent litigation.