Quarantine Settlements
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Is Mediation Effective in Workers’ Comp?
Babe Ruth’s lifetime batting average was .342. Studies in states with a history of workers’ compensation mediation suggest your success rate with it is likely to be a whole lot better.
In Florida, parties must mediate workers’ compensation claims within 130 days of the filing of a petition for benefits. Results for the fiscal year ended June 30, 2013, showed a 74% success rate, defined as partial or complete resolution of the issues.
The Minnesota Department of Labor and Industry reported that the state’s mediation resolution success rate between June 2007 and September 2008 was never less than 60%. The success rate was 100% in four of those months.
The Maryland Judiciary’s Mediation and Conflict Resolution Office conducted a study where half of Baltimore’s workers’ compensation filings were referred to mediation. The 2002 report details the results. Measured at various points in the litigation process, the mediated cases were consistently found to conclude more quickly and with less discovery than the control group. For example, 83% of cases in the workers’ compensation mediation group were disposed of before their scheduled trial date, compared with 70% in the control group.
In 1992, the Dallas Mediation Project reviewed 981 mediated cases. Workers’ compensation, contract disputes and collection cases showed the highest level of resolution—87% of these workers’ compensation cases settled through mediation. Motor vehicle claims settled 85% of the time, and other personal injury claims settled 77% of the time.
Don’t be afraid to step up to the mediation plate. You might hit a home run.
How to Write a Workers Compensation Mediation Brief
Why do so many advocates stumble when it comes to preparing for mediation? Perhaps the most important thing a lawyer can do to prepare for mediation is to write a brief. Done properly, the process forces the writer to focus and get ready to negotiate. But many people do it wrong, mostly by providing irrelevant and obsolete information and not providing the data necessary to evaluate the claim. This problem is so common, I now instruct parties in my confirmation letter what to include.
The brief doesn’t have to be fancy. I don’t care if there’s a caption. An email message is fine. What would be helpful would be sub-headings for the categories shown below.
Transmit the brief at least 7 days in advance of the mediation. This helps everyone prepare, including the mediator. Your brief may prompt a request for a document. Showing up with your brief at mediation wastes participants’ time and money as the mediator reads the brief. Late preparation can raise new questions and sometimes leads to adjournment and a second session to allow time for everyone to get answers.
Claims professionals, you know the mediation is coming up. Ask your lawyer to provide you a copy of the brief at the same time it is sent to the mediator. This assures you and your advocate are on the same page. You can also monitor the timeliness of the preparation.
Facts
The brief should briefly (that’s why it’s called a brief) recite facts such as the dates of injury, affected body parts, and the injured worker’s date of birth.
Indemnity
State specifically if indemnity is open. If it is open, what do you think is the correct percentage and dollar amount? If less than 100%, what are the Permanent Disability Advances to date? At what rate are they being paid? Is there any argument about apportionment, overpayments or retro? Do the parties agree on the DOI? If parties disagree on an issue, spell out your position. What does the other party say?
Medical
Copies of narrative medical reports (AME, QME, PTP) from the last two years will be very helpful as well as a print-out of medical expense payments for that period.
Medicare Status
Is there a current (within the last year) MSA? If so, attach a copy to your brief. If the injured worker is a Medicare enrollee or is at least 62 1/2 years old, get a current MSA report and attach it to your brief. If you are not obtaining an MSA because the injured worker is undocumented or is otherwise ineligible for Medicare, say so in your brief. If you have obtained CMS approval, provide a copy.
Other Issues
Are there any other issues to be resolved? Mediations are most successful when parties are able to prepare for negotiation and do not encounter surprise issues.
Confidentiality
Indicate if the brief is confidential or is being shared with the other party. You may choose to create two briefs, one for exchange and one confidential.
A Mediation Story
The claim was decades old; indemnity was supposedly fully paid. The carrier hadn’t paid a medical bill in years. The applicant had dismissed her attorney, but continued to pursue the claim.
The carrier wanted the claim off the books, so they called me. Without prompting, the adjuster disclosed his authority limit to me in an email.
The applicant, the carrier’s hearing rep, and I met for mediation.
While there was no question the applicant was disabled, the dispute was whether the disability was industrial. Thankfully, the applicant had a very good alternate form of medical insurance which had been providing and continued to provide full coverage.
I spent time with the parties separately, allowing each of them to vent about how they had been taken advantage of by the other. Issues were raised, demands and offers exchanged. While remaining neutral, I empathized with both parties, discussing pros and cons. Finally, the hearing rep made what he said was an offer of his full authority. I showed him my print-out of the email which showed authority for an additional $15,000.
He stared at me. “I have to make a call.”
“Let’s make it together,” I said.
We got on the phone to the adjuster who said the hearing rep was correct. “Mike” (not the real name), I said, “Are you able to take a look at your email to me of [the email date]?”
“Yes, I see it.”
“That says your authority is $15,000 more.”
“Oh, I didn’t have that authority. I never had that authority.”
I did NOT say, “Then why did you tell me that’s what you had?”
Instead, I went to the room where the applicant was waiting and put the hearing rep’s offer on the table.
“I have to call my spouse.” I left the room to give her some privacy.
After a little while, the applicant told me her spouse said the offer was an absolute non-starter.
The hearing rep stated he had to leave for another commitment, and the mediation adjourned without resolution.
A few days later, the applicant called me to ask if the offer was still open. I said I would check.
The case settled by Compromise & Release for the amount of the hearing rep’s offer.
The Lesson
Parties sometimes need time to process everything that happened at mediation. They may have learned about new issues or gained new insights about the basis for the opponent’s position. People often have a negative kneejerk reaction to a demand or offer. After some time to cool down, they may be able to understand a different point of view, even if they don’t agree with it.
Think about why this case settled. What did the applicant gain by being able to talk about the claim with the mediator? What do you think happened between her and her spouse once she got home? What can you conclude about pre-mediation communication between the adjuster and the hearing rep, between the adjuster and the applicant?
How important is it to have everyone who will participate in making the settlement decision attend the mediation?
Humility Leads to Mediation Success
Here’s an oxymoron for you: the humble litigator. Like jumbo shrimp and military intelligence, it may seem ridiculous to pair humility with any litigator. But for anyone trying to settle a claim, a little humility can help get you to the finish line.
Most of the time that dispute will eventually settle without court intervention. The parties want to resolve the issue with the smallest expenditure of time and money. Incivility, bias, prejudice and anger are inconsistent with humility and get in the way of settlement.
Acting with humility does not admit fault. The most successful litigators are courteous and respectful.
I’m The One Who’s Right
Of course you are.
Then why is the other side fighting so hard to say the opposite? Of course they’re completely wrong, but maybe, just maybe, you could pretend they have a reasonable point of view. Or—here’s a shocking concept—try to see their point of view.
Students learning to debate (or get through law school) may be asked to argue a position with which they disagree. While preparing for mediation, try to outline the other side’s position and think about all the reasons supporting that position. This is an excellent way to marshal your own arguments. It is also an exercise in empathy.
You Want Me To Do What??
Think about forgiveness. When you feel wronged, your desire for vindication may make negotiation difficult. Forgiveness must be internal and not necessarily verbalized.
Forgiveness is about moving on, doing the best thing for you and those you represent, not for the benefit of the offender. Forgiveness keeps you in control of your emotions rather than surrendering control to the volatility of others. Forgiveness does not validate the other side’s behavior or minimize the damage it has caused. It doesn’t mean you were not wronged or that the parties will have a good future relationship.
Conversely, a well-phrased apology has helped settle many a case. For example, I watched one litigator, without any prompting and without admitting fault, express sorrow that the injured worker had experienced a lengthy delay in getting treatment. That may not be right for your case; for his, it was. Don’t forget that everything said in mediation is confidential and cannot be used for evidence in any forum.
Good People, Strong Emotions
You’re a good person, right? Yet, difficult situations can spark rage and other extreme emotions in the best of people who then behave without humility.
In mediation you can state your position in the strongest terms in a private session with the mediator. The mediator can then skillfully communicate those emotions to move parties to settlement.
A bit of humility can improve your effectiveness in formulating and reacting to those communications.
Mediate to Comply with this Regulation
Ready to file that DOR? Not so fast. If you can’t show you tried to settle, you may be wasting everyone’s time.
Mediation Shows Readiness
8 CCR §10414(d) requires that “All declarations of readiness to proceed shall state under penalty of perjury that the moving party has made a genuine, good faith effort to resolve the dispute before filing the declaration of readiness to proceed, and shall state with specificity the same on the declaration of readiness to proceed…. [emphasis added]”The way to show a genuine, good faith effort at resolution is to mediate the disputed issues. Here’s how you meet the regulation’s requirement to state with specificity:”The parties attempted to resolve the described dispute through mediation with mediator Teddy Snyder on [date].”
8 CCR §10414(d) requires that “All declarations of readiness to proceed shall state under penalty of perjury that the moving party has made a genuine, good faith effort to resolve the dispute before filing the declaration of readiness to proceed, and shall state with specificity the same on the declaration of readiness to proceed…. [emphasis added]”The way to show a genuine, good faith effort at resolution is to mediate the disputed issues. Here’s how you meet the regulation’s requirement to state with specificity:”The parties attempted to resolve the described dispute through mediation with mediator Teddy Snyder on [date].”
How often will you need this language? Almost never. The reason is that once parties mediate their dispute, more often than not they resolve it.
Convening
Convening, the process of getting everyone to agree to a time and place to mediate, can be the trickiest part. Some practitioners remain unfamiliar with mediation. They may confuse it with arbitration. We are all afraid to try new things, sometimes even when clients tell us to. You need to communicate your readiness to resolve the issues in a setting where those issues can be fully explored and the parties are in control of the outcome. Mediating is the win-win choice.
Convening is best done by the attorneys, though the mediator can assist. If you are still trying to get the other attorney’s attention, you may indeed have to file that DOR. Once you get a response, even if it takes going to the Board, immediately suggest mediation as a way to cut to the chase, resolve the issues and avoid future unnecessary Board appearances.
Mediator Proposals
I see cases– sometimes years later– where the parties were oh-so-close to settling when negotiations broke down. Nobody would compromise their bargaining position to give that last inch, and they didn’t have a mediator to help them bridge the gap.
A Secret Response To An Offer Nobody Made
A “mediator’s proposal” works like this. I come up with a figure, sometimes with conditions such as CMS approval, which I believe will settle the case. Neither party has made this settlement offer, but, based on the negotiations which have occurred so far, it is a figure I believe all parties can accept.The mediator’s proposal depends on confidentiality. Parties are in separate rooms at this point. These separate sessions are called “caucuses.” I have always communicated my mediator’s proposals aloud in the caucus room, but some mediators write the proposal on two pieces of paper (one for each side) and sometimes put them in envelopes to be opened once the mediator has left the caucus.
A “mediator’s proposal” works like this. I come up with a figure, sometimes with conditions such as CMS approval, which I believe will settle the case. Neither party has made this settlement offer, but, based on the negotiations which have occurred so far, it is a figure I believe all parties can accept.The mediator’s proposal depends on confidentiality. Parties are in separate rooms at this point. These separate sessions are called “caucuses.” I have always communicated my mediator’s proposals aloud in the caucus room, but some mediators write the proposal on two pieces of paper (one for each side) and sometimes put them in envelopes to be opened once the mediator has left the caucus.
If both parties accept the proposal, we have a settlement. (Hurray!) If one party accepts, but the other does not, there is no settlement, and the refusing party never learns that the other side accepted. I only tell parties there is no settlement. If both sides refuse, I tell them there is no settlement, but, again, parties do not know if the other side accepted the mediator’s proposal.
There are many benefits of the mediator’s proposal. Principally, no one has forsaken their last offer to settle. If a mediator’s proposal does not succeed, the parties can continue negotiating from their last position.
Blame it on the mediator
The mediator’s proposal allows mediation participants to save face. “It wasn’t our idea; it was that darn mediator’s.” Sometimes attorneys hesitate to be completely forthright in their recommendations to their clients, particularly if they are the second or third attorney on the file. The mediator’s proposal opens the door for a frank discussion while allowing the attorney to shift responsibility to the mediator for an idea the client may find distasteful.
Mediators don’t stick their necks out to come up with a proposal unless they are pretty sure it is going to be accepted. These things don’t happen early in the mediation. More likely, you will see a mediator’s proposal when it looks like parties are heading to an impasse. Because my mediator’s proposal is a reflection of the parties own negotiation to this point, it is generally accepted.
Stop Hiding The Ball: What You Need To Tell The Other Side
Your best friend in negotiation can be your opponent—provided you put your report where your mouth is. Too often parties withhold evidence which would support their position. Sure, your opponent’s initial reaction may be to denigrate your evidence. But they may not have anything to refute it. It might even be too late for them to try to work up something.
Help Your Opponent Convince Their Client
So why did it take so long to get to this point? Because you have been hiding the ball. If you expect large sums for a life pension or for treatment the carrier had denied plus penalties plus fees, be prepared to show why the employer was wrong. You can’t expect opposing counsel to advise their client to change their case evaluation if you’ve been keeping secret the reports that crush their position. Of course, timing is important. There are many reasons why you might not want to show your hand too early. But by the time you are at the mediation table, you must be prepared to put your cards on the table.
So why did it take so long to get to this point? Because you have been hiding the ball. If you expect large sums for a life pension or for treatment the carrier had denied plus penalties plus fees, be prepared to show why the employer was wrong. You can’t expect opposing counsel to advise their client to change their case evaluation if you’ve been keeping secret the reports that crush their position. Of course, timing is important. There are many reasons why you might not want to show your hand too early. But by the time you are at the mediation table, you must be prepared to put your cards on the table.
How Mediation Confidentiality Helps
Perhaps you have a sub rosa video or some other smoking gun the other side doesn’t know about. Your mediation brief can be confidential– for the mediator’s eyes only. When you are in caucus (a private meeting with the mediator,) you can discuss secret information with the mediator. If you don’t want it disclosed to the other side, it goes no further. But putting the mediator in the picture allows her to frame the issues in the case to maximize the potential for settlement.
Negotiations succeed when parties are in the same ballpark. If you don’t communicate what your ballpark is, your opponent will assume that their evaluation is the correct one. It’s hard to play in the same game when one of you is at Dodger Stadium in L.A. and the other is at Angel Stadium in Anaheim. To bring everyone to the same field, you have to communicate.
America Runs On . . .
You’ve probably seen the ad:
Courtrooms– even WCAB courtrooms– run on evidence. It’s your job to make sure you have evidence to support your view of the case.
The advice to communicate your evidence so your opponent can help you “sell” your position assumes you’ve done everything necessary to gather that evidence. That could mean obtaining a narrative medical or vocational report or ordering a Medicare Set-Aside allocation report.
Mediations are efficient and successful when everyone comes prepared with information to support their demand or offer.
You Have To Play To Win
–How Mediation Is (Not) Like the Lottery–
No, I’m not advocating you play the lottery, but the slogan does apply: you have to play to win. The odds of winning the California Super Lotto Jackpot are 18 million to 1 against you. The likelihood you will be able to resolve your workers compensation issue in mediation is more like 80-90% in your favor providing you participate.
Take a Calculated Risk
The only settlement offer without a chance of acceptance is the one you never make. Some parties complain that they can’t settle the case. Yet, those same parties refuse mediation or come to mediation unwilling to negotiate. You cannot expect resolution in mediation if your position is to never move off the number that was refused pre-mediation. You have to play to win.
Playing the lottery is the classic example of a blind risk. A blind risk embodies an irrational hope, an action based on nothing more than emotion, expecting something for nothing. A person who takes a calculated risk, on the other hand, has objectively assessed the situation and examined the upside and downside potential. This is true for investors, explorers, world leaders, and negotiators.
First evaluate, then negotiate
Before you can effectively negotiate, you have to do your homework, i.e., run the numbers to evaluate the claim. Once you have considered the best and worst alternatives to a negotiated agreement, you are ready to proffer your demand or offer. You have to play to win.
Mediation allows the people with the most knowledge about the claim to take control of resolving it. During mediation, the mediator can help you calculate your risks and negotiate resolution.
Shuttle Diplomacy
Some parties refuse to meet with the other side. For whatever reason, they do not trust them. When an Applicant’s Attorney told me, “She refuses to meet with them,” my response was “She doesn’t have to.”
Overcoming mistrust
Most of my mediations start with a joint session with all the participants in one room. But it doesn’t have to be that way. When mistrust prevents parties from defining and resolving issues, I meet with parties separately, a process called “caucusing.” We use separate rooms when space permits, or parties alternately enter and exit the mediation room. While in caucus, parties can lay out their concerns in confidence. I do not disclose what anyone said without permission. One of the cornerstones of mediation is confidentiality.
Shuttle Diplomacy
The term “shuttle diplomacy” was first applied in 1973 to Secretary of State Henry Kissinger’s separate meetings with leaders of Israel and Arab nations. Now we use the term generally when a mediator keeps a negotiation going by moving between parties who will not meet with each other directly. To parties engaged in workers compensation litigation, their conflict has the same personal importance as an international dispute.
Shuttle diplomacy is a proven technique for achieving settlement even after the parties have lost all hope.