It’s no secret that insurance carriers have altered their practices in the past several years. Authority and independent judgment they previously possessed has been removed from adjusters, managers, and supervisors as executives in the companies strive for uniformity in claims handling and ironclad control over settlement decisions. Rarely at mediation is there a person present from an insurance carrier with genuine ability to be flexible and exercise individual judgment beyond parameters established in advance.
This has frustrated plaintiff lawyers along with judges and mediators in many instances where clearly a case should and would settle if the right person with authority and flexibility were present. Pressure on the companies in this respect continues from various sources but the practice of restricted authority and flexibility persists in many instances.
This reality renders it is more important than ever that plaintiff attorneys create the circumstances that will produce optimum results. Those employed by insurance carriers to participate in establishing the reserves on claims as required by law and who set settlement parameters must be motivated to set them in a range that will settle the case.
The best plaintiff lawyers understand this. The changes in claims practices have not prevented plaintiff attorneys from settling their clients’ cases for reasonable amounts. The statistics are still quite high for settlements in mediations where experienced professionals are involved in each of the roles, especially plaintiff’s counsel. The reason is that experienced professionals find ways to work within the existing parameters. Rather than spinning wheels in unproductive behavior, demanding that which cannot occur, they do what will bring success in the environment in which they find themselves.
Carriers are paying hundreds of thousands and millions of dollars in settlements at mediations. They pay based upon their perception of risk. Plaintiff attorneys who have the best success for their clients at mediation, even under the present conditions, do the following:
1 ► Prepare the other side for the mediation. It is necessary to do that which will have the other side prepared to negotiate within a range that will settle the case. The most important task is to make sure the claim representative’s file is documented. This means providing actual, reliable, tangible evidence supporting the client’s injuries, liability, and damages, past and future. These must be in the hands of the representative in plenty of time prior to evaluations taking place so that nothing is left to conjecture, if at all possible. Evaluations take place weeks and sometimes months prior to the mediation. The basic rule for carriers is that, if it is not documented it does not exist or is not true. Claims examination takes place with a critical eye. It is a cumbersome process many times to change evaluations when documentation is submitted too late. Obviously, the mediation session is too late. But so too is just a few days or even a week prior in many instances. What happens in claims processing must be kept in mind. Even if records are obtained by the carrier through subpoena, it’s best to organize what is important for the carrier to see and contemplate. Walk the adjuster through the records with a letter or brief. The easier the connection can be made between the documents and damages, the more likely the carrier representative will grasp what is being communicated and prepare accordingly.
2 ► Communicate directly with the assigned insurance adjuster. Don’t rely upon defense counsel painting an accurate picture of plaintiff’s case as you would. Instead, by organizing and putting together the documents supporting liability and damages, work directly with the adjuster in addition to opposing counsel. With the changes taking place over time in the dynamics between the claims department and defense attorneys, direct communication with the adjuster is usually acceptable if not encouraged. This also minimizes the chance the carrier will come unprepared to the mediation with insufficient settlement authority.
3 ► Do thorough discovery. Requests for admission and special interrogatories are powerful tools yet too many plaintiff lawyers do not use them or do so ineffectively. Depositions are important as well. Unless doing so may hurt your client’s case or where an early settlement can be reached without the added expense, the time and money should always be spent to do discovery in a careful, expert fashion. It is another means to demonstrate to the insurance carrier that you are and will be on top of your case. It is the best and most clear way of showing the risk faced by the carrier. Depositions need to be well thought out so that when taken the result will be a transcript that can be used to make critical points obvious to the carrier representative. Thorough discovery does not mean overkill discovery – it should be carefully tailored to have the effect intended. Overkill can be counterproductive as it can invite the same in return as well as drive an unnecessary wedge between counsel and the carrier representative rendering negotiations more difficult.
4 ► Maintain a professional demeanor in all communications with insurance company representatives and defense counsel. It is rare that outward aggressiveness is productive. Insurance company representatives and defense attorneys rarely cower in fear and pay more money in response to rude and uncivil behavior. Those who are unsophisticated use crude methods in an effort to intimidate. Those who are really effective go about it intelligently. They reveal the power in their case through demonstration by their work product not by empty-headed blustering. Also avoid pettiness and arguments in working with the other side. Dysfunction occurs when it “gets personal” between opposing attorneys and with a claims representative. While cooperativeness is not always necessary to reach agreement, the lack of it can lead to unnecessary costs and delays. When you want something from someone, even your foe, treating them badly is normally counterproductive.
5 ► Maintain a close relationship with their client and keep careful track of their medical condition and treatment. Many attorneys fail to follow what their client is doing with respect to treatment and other matters important to the case. It is only when it is too late that theattorney discovers, for example, that their client has received treatment with a chiropractor for too long or is wrapped up with some odd holistic guru, running up specials far beyond that which is reasonable. Or, clients may fail to seek the help they need because they don’t know enough. By failing to stay in close contact, counsel may learn too late, for example, that their client has been experiencing symptoms that called for a specialist intervention but did not know what to do about it.
6 ► Demonstrate you are prepared to go to trial. In this era of attempted uniform claims processing, attorneys can have a tendency to rely on the ability to settle without doing much preparation or spending the money and time needed to develop and document their case. While it is true that carrier practices are such that documenting the injuries, treatment, and expenses are heavily weighted (unless liability is genuinely contested) it remains important in many cases if not most that clear signals be given that you are prepared for trial if no settlement is reached. Insurance company defense attorneys are required to provide reports to claims adjusters which are reviewed by others including supervisors and managers. In some cases, these go to home office. The reports will include statements regarding the plaintiff attorney and expectation of effectiveness at trial. Those who have prepared their case for trial are more compelling in terms of generating favorable settlement offers than those where the attorney has been lax in their discovery, witness statements, retaining experts, assembling demonstrative evidence, and so on. It becomes less significant whether you have tried 5 or 100 cases, if you demonstrate you are prepared for trial in the instant case being mediated.
7 ► Avoid attempts at trickery. If you are primarily a plaintiff personal injury lawyer you will develop a reputation with insurance carrier representatives, defense attorneys, mediators, and judges. You do not want to be known as tricky, underhanded, or dishonest. It makes those on the other side not trust even that which is legitimate when it comes from you. It causes those representing carriers to discount you and your client’s claims. It is one of the worst things a plaintiff lawyer can do. You become just another sleazy plaintiff lawyer. You will not do as well for your client as you should in mediation or settlement conferences. The attorneys who consistently do well are those with the best reputations for ethical conduct and honesty.
8 ► Prepare your client for mediation. There have been instances where the attorney meets their client for the first time at the mediation. The client needs to be prepared so that they have a realistic view of settlement ranges and value. It becomes problematic when a client has nestled into a belief their home will be paid off or they can retire or pay college loans with their net recovery when this sort of settlement value is simply not there. It’s also important to review with a client in advance the manner in which the settlement funds will be divided so that they understand how the net sum to them will be determined. Prepare the client for the mediation to look and act in a manner that will cause the opposing side to respect them. This is overlooked too many times by plaintiff lawyers who suffer the consequences when the adjuster and defense attorney spend time during the mediation talking about how a jury will dislike their client.
9 ► Prepare for mediation. Prepare as if there will be a trial, not as comprehensively but in terms of organization. Have the documents and items to be used at mediation organized. Make copies in advance of documents to be shared, including medical records, reports, itemizations of specials, and anything else that will be useful during the mediation. Highlight in advance statements in records and reports that are of particular importance. If there is a video be sure the mediator is prepared to view and show it. Prepare a list of specials. Have the medical billing itemized with the “Howell” reductions determined. It does no good to try to hide this ball. Do a timeline especially including the history of treatment and other relevant events. Where future costs or losses are claimed, have these documented as effectively as possible both as to amount and the manner in which these will come about and show why it is not speculative. It’s best to put all of this in a binder for ease of use, providing a copy to the mediator and other side, including the claims representative directly and in advance. Jury verdicts can be helpful at times but they need to be relevant as to geographical area and similarity to the instant case. Local verdicts are more persuasive.
10 ► Prepare to negotiate and work with the mediator intelligently. Negotiation approaches differ widely from mediation to mediation. The most experienced mediators are prepared to employ that means of approach or style which best fits the circumstances and parties. They have to be flexible in this respect and comfortable whether the negotiation will be highly competitive and the atmosphere tense or whether the circumstances call for a more cooperative approach. It is best that a plaintiff attorney come with an open mind relative to the manner in which the mediation will occur in this respect. If one approaches the mediation with a cooperate style in mind but the other side is determined and bent on engaging in a battle, then the style of the mediator will adjust and so should that of the plaintiff’s attorney. A good mediator will also know and assist in negotiation strategies that will be best under the circumstances to achieve an optimum settlement. It is wise for a plaintiff lawyer, when comfortable with the mediator, to work with them in determining effective strategies in the negotiation.
By David C. Peterson