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A Real Life Lesson Why It’s Almost Always Better To Settle

LaQuan Tremell Taylor’s injuries were horrific. The 27-year-old veteran, was robbed, carjacked, and shot in the parking lot of a Kroger grocery store in Atlanta, Georgia. After three weeks in a coma, roughly a year in the hospital, multiple surgeries, and millions of dollars of treatment, plaintiff’s spinal cord injury left him a partial paraplegic with scars over his entire body and continuing pain. Kroger was the primary defendant in his suit for the store’s negligent failure to maintain adequate security.
Kroger’s insurance stacked thusly:
$3,000,000 self-insured retention (SIR)
$2,000,00 ACE American Insurance Company.
$25,000,000 Starr Surplus Lines Insurance Company
$25,000,000 Great American Insurance Company Of New York
Excess above Great American: XL Insurance America and Chubb Group of Insurance CompaniesPlaintiff’s pre-trial demands were within Starr’s coverage limit. But Starr refused to settle. The final judgment exceeded 61 million dollars. It appears that Starr did not attempt to mediate a settlement until after judgment was enteredNotwithstanding its ill-advised choice, Starr refused to pay more than its policy limit to satisfy the judgment. Great American settled the case and on February 11, 2021 sued Starr for reimbursement. The complaint for declaratory judgment alleges that Starr had acted in bad faith and was “stubbornly litigious.” Great American has asked for reimbursement of its settlement contribution plus attorney fees and expenses.

I see many cases that, like the Taylor case, clearly have the potential to “blow up.” Cases settle when parties are willing to spend the necessary time in good faith mediation and make reasonable settlement proposals. When parties are “stubbornly litigious”, the results can be disastrous.

And Then There’s . . .
In workers compensation cases, being “stubbornly litigious” can mean denying requested medical treatment. Often, though, alternative treatments end up being more expensive in the long run. Patients who cannot get treatment through the usual process sometimes end up in emergency rooms, incurring a much larger bill.
 

Authorizing a quick, “expensive” treatment can lead to early claim closure and a less costly claim overall. Sometimes the injured worker ends up undergoing the procedure which was originally requested anyway. And don’t forget the administrative expenses of utilization and bill review.Patients aren’t doctors. Patients are not writing the Requests for Authorization. Almost every patient will prefer conservative treatment to life-threatening surgery. Sure, there are malingerers and patients who exaggerate their pain in the hope of scoring heavy-duty medication or just gaining attention. And, yes, some doctors overtreat to increase their fees. Independent doctors, claims personnel, and defense attorneys have heightened their awareness of those patterns.

Don’t lose sight of the forest for the trees. Like Starr Surplus Insurance, a “stubbornly litigious” stance can end up costing you more in the end.

Are You Serious?

The #1 predictor of mediation success is whether the participants have come with a seriousness of purpose. They understand that mediation is their best chance to avoid delay and expense, not to mention a bad result. They have readied themselves to settle the case.

Why Are You Here?
Sure, the court may have ordered the parties to mediation. Look at this as a blessing. You might have struggled to get your opponent to the negotiating table. Now the court has done this for you. Moreover, instead of having to deal with insincere posturing, the mediator can filter communications to get to the crux of the dispute.The participant who only comes to mediation because “opposing counsel wanted to do this” is throwing away an opportunity and dishonoring the client.Have You Prepared?
Mediation helps parties resolve disputes efficiently. Yet, both attorneys and their clients often show up for mediation completely unprepared. Being prepared doesn’t just mean knowing the facts and law of your case, though some mediation participants even disdain this basic step.

Before coming to mediation, double-check whether you have followed the mediator’s pre-mediation instructions and requirements. This is doubly important in an era of remote video mediation.

Evaluation is Key
Take the time to thoroughly evaluate your case. Don’t think you can come in with an extreme number and wing it. Be prepared to explain your proposal, including why it is reasonable. What calculations were involved? Have you researched similar issues online so you can show how those precedents apply or are different?

The next step is to educate the client about that evaluation and plan your negotiation. Make sure you know who can grant settlement authority and line it up in advance of the mediation. The ultimate checkwriter should attend the mediation.

Come to mediation ready to settle, and chances are high you will.

Remote Mediation with Non-English Speakers

You’re ready for your remote video mediation. Everyone has the latest version of the technology and knows how to join. You rehearsed with your client; maybe you did a practice session with the mediator. You submitted the mediation confidentiality form and contact form. Now you can concentrate on the facts and the law.

Wait–What about the Interpreter?
At the beginning of every remote mediation, I confirm that everyone present has signed off on the confidentiality agreement. Yet, sometimes, against all the rules, someone else is there. Often, it’s a family member who is “just there to interpret.”

It’s inconvenient, but perhaps not a major issue. Just as would happen with an in-person mediation, someone who does have a role in the mediation can execute the confidentiality acknowledgement at the last minute. But some family members refuse documented participation in any court proceeding. Sometimes the party lacks the technology to return a signed document immediately.

Usually, the attorney can interpret for the client. Of course, the attorney is bound by confidentiality rules, but this arrangement often omits a few steps.

Get the Client What the Client Needs
An English language confidentiality agreement executed by a party who clearly needs an interpreter raises questions. Did the client sign a document without understanding it? If the attorney or a family member interpreted, that should be documented within the agreement. The person who interpreted should be a signatory, e.g.,

I translated this document and read it to Plaintiff in Spanish:___________________________________

The Settlement Agreement
Attorneys on both sides of the conflict should be concerned about the validity of an English-language settlement agreement when one or more signatories are not fluent in English. Nobody wants to be in in court after the fact because someone is contesting the agreement. The document should be read to the non-English speaker, and the interpreter needs to disclose and sign off on the settlement document. Ideally, lawyers will also provide a written translation of the document. Google Translate can create it quickly, but not necessarily with 100% accuracy.

The ultimate protection is to bring in a certified court interpreter by video or telephone and at the time of signing the settlement document.

Translating to Everyday English

You may think all the mediation participants are speaking English, but you have failed to realize that at least some of you are speaking a foreign language. The most common foreign language used in mediation is Lawyer, and Adjuster is also common. In some mediations, everyone except the claimant is speaking Insurance, but no one has thought to provide a translation.

While the professionals in the room are speaking one of these languages, the clients are often mystified, simply trusting that their counsel is looking out for them. Sometimes, though, a client’s inability to understand becomes apparent near the end of the day.

I have heard of mediations where, when it was all over, the client asked, “What just happened?” In one of my mediations, as the attorneys were finalizing the details of the settlement, the claimant asked me how a particular issue was being resolved—an issue that hadn’t been addressed at all. I had to make sure the attorneys addressed this concern with the claimant and each other.

Professionals who use jargon regularly can easily forget that people outside their closed community don’t understand what the professionals are talking about. Just as you would provide an interpreter to translate an international language, make sure everyone understands what is being said in the languages of Lawyer, Adjuster or Insurance.

Quarantine Settlements

You have an opportunity. Right now. While you are working from home. While you are most likely to be able to reach people by telephone and actually engage in a discussion about pending claims.
 

Look over your file inventory. Which are the claims with high monthly expenses?  What about the old dog claims that have been around forever? Would you like to close that in pro per claim?

Reach out to parties about settling pending claims. Offer to participate in a remote mediation. Video mediation lets parties negotiate jointly and also in separate caucus rooms without physically leaving their homes.

In mediation, people need not retreat from their stated negotiation positions, yet confidentially discuss a route to resolution with the mediator.

Claims are down, right? High unemployment means there are fewer people working and fewer people getting hurt. There are fewer cars on the road. Essential workers must still commute, but the rest of the population is mostly sheltering in place. But then there are those COVID-19 claims. Sickened workers are entitled to coverage. Small businesses are making claims on their business interruption policies. Open roads have encouraged reckless driving, which worsens the outcomes of the inevitable collisions.

Eventually, there is going to be an uptick in claims. The time to reduce the pending claims inventory is now.