Tag Archive for: settlement

3 Logic Skills to Favorably Settle Your Case

Most of the cases I mediate are fact-dependent. The law is settled; it is up to the parties to correctly apply the law to these facts. Yet, lawyers sometimes show up with little understanding of what the relevant law is. When the applicability of statutes and regulations is cloudy, case law provides interpretation. Reconsider how these three logic skills apply to that case you know just needs to be settled before parties spend any more time or money.

Analogize /Extrapolate/Distinguish
Every individual is different; hence, every case is unique in some ways. Legal analysis involves  researching legal precedents to see the similarities to and differences from the facts of this dispute.

If case law favors your position, fashion your arguments to show why the precedent is an analogy for the facts of the present case. Instead of understanding this basic legal skill, I see advocates argue against their client’s interest that there are differences.

To create an analogy, one must extrapolate, i.e., show how the court deciding this case should apply the reasoning of the previously decided case to different facts to rule in favor of the client. This argument requires thoughtful preparation and creativity.

An attorney who argues that a precedent is so different that it has little bearing on the present dispute is distinguishing that precedent. This is an analysis of degrees of difference.

If you dig deep enough, you can probably find cases that could suggest opposite results for your case. Don’t ignore the unfavorable ones. The skillful practitioner will show why the favorable cases are analogous to the one being negotiated and the unfavorable ones should be distinguished.

Remember, you can direct your mediation statement solely to the mediator, and it will remain confidential. Whether in a court memo, a mediation statement, or a demand letter, a reasoned presentation is more persuasive than a bombastic declaration.

CMS Gets Tough on Unapproved MSAs– Until They Don’t

In January, 2022, CMS created an uproar when it published Version 3.5 of its Workers Compensation Medicare Set-Aside Reference Guide stating that it would essentially ignore “non-submit” or “evidence-based” Medicare Set-Aside allocations:

Unless an MSA is submitted and approved, CMS cannot be certain that Medicare’s interests are adequately protected. Therefore, CMS will treat any non-CMS-approved product as a potential attempt to improperly shift financial burden by denying payment for medical services related to the WC injuries or illness until the claimant demonstrates complete exhaustion of the entire settlement amount, less fees and costs, rather than a CMS-approved WCMSA amount.

CMS approval of an MSA was never required. Ten years ago, the LexisNexis Legal Newsroom for Workers Compensation Law published my article “Four Reasons To Avoid The CMS Approval Process For MSAs.” You can find an abstract of that article on this blog.

Then, the MSA industry created products known as “non-submit” or “evidence-based” MSAs. Since approval has never been required of any MSA, the purpose of this new version seemed to be to low-ball the MSA. CMS took notice.

If your MSA was priced correctly, they now say, it will be adequate to cover the injured worker’s medical expenses, and this will never be an issue. One problem with this approach is that injured workers do routinely exhaust their approved MSAs. Since MSA allocations do not account for inflation, they are likely to be depleted early; the younger the injured worker, the more likely the fund will be depleted.

CMS also took the position that if the MSA was paid via a structured settlement, Medicare wouldn’t pay a dime until every structured payment had been made. If the structure was set to pay for the life of the injured worker, that would never happen.

And Then They Backed Down

On March 15, 2022, CMS revised the relevant section to say:

CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement … less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses. . .

Administratively, CMS can more easily simply ignore unapproved MSA allocations rather than spend time reviewing them in order to exercise discretion. Line by line review takes time.

CMS has sent a message that it intends to crack down on settlements designed to avoid CMS review. We may see sterner pronouncements in future revisions.

How to Proceed

Think twice before choosing to forego the approval process when it is available. Don’t rely on an MSA allocation designed to short-change CMS.

Re-think your settlement agreements. If approval was not available or not pursued, consider including a what-if clause., This would provide that if CMS denies payment of a claim-related Medicare-eligible expense, the employer will provide counsel to defend the MSA allocation. In the short term, the employer would be responsible for the medical expense of the injured worker’s immediate needs, perhaps subject to a ceiling.

One can imagine that disputes could arise about what constitutes a claim-related Medicare-eligible short-term need. Include an agreement for alternative dispute resolution. But, holy-moly, nobody wants to keep litigating long after everyone thought the claim was fully and finally settled.

These dilemmas will probably force people to seek approval whenever it is available.

Which is just what the folks at CMS want.

New Restrictions on Confidentiality in Settlement Agreements

Effective January 1, 2022, amended California Code of Civil Procedure §1001 expands restrictions on confidentiality clauses in settlement agreements.

Previous law barred such clauses in agreements settling filed civil or administrative actions alleging sexual assault or sexual harassment. Only the identity of the claimant and the amount of the settlement could be protected.

The new provisions expand the prohibition to include

1) acts of workplace harassment or discrimination not based on sex, and

2) acts of harassment or discrimination not based on sex by the owner of a housing accommodation.

50 SHADES OF NEGOTIATION GREY

No, this post doesn’t qualify as erotica. It’s about the ability to see nuance. Most cases are not black-and-white, no-doubt-about-it, situations. Rather, there are shades of grey. If this were an open-and-shut case, chances are that claim would not be in dispute.
It’s Part of Empathy
Being able to see all the facets of an issue enhances your ability to negotiate a settlement. You can best meet your opponent’s arguments if you take the time to put yourself in that person’s shoes long enough to figure out what those arguments are. Then you can best meet them.

While it is appropriate to research all the facts and law that help predict an outcome,  when researchers choose to dismiss negative findings, they will not be able to constructively negotiate. Only interpreting findings as favorable, a mindset known as confirmation bias, prolongs conflict.

When initial research reveals negative information, the impulse may be to just keep digging. This attitude manifests itself in the actions of litigators who, for example, keep designating treaters and experts in the hope that somebody will back up their position. An analogy might be to a company which continually engages in research and development, but never actually brings a product to market. That’s not what success looks like.

Grey Is Stressful
Uncertainty generates stress. Parties in mediation sometimes tell me how relieved they are that the dispute is over, even when they got a result they see as unfavorable.

Settlement isn’t about who’s right and who’s wrong. It’s about showing everyone that concluding the dispute is in their own self-interest. Mediation is the place to do that.

COVID-19 IS MESSING THIS UP, TOO

HOW CCP 599 HELPS AND HURTS

Due to the pandemic, very few cases are being tried. Reports from the legal community indicate that the absence of an imminent trial date is inducing parties to put off settlement as well.

A History of Procrastination
Lawyers have always seemed to have a reason why it’s too early to settle a case. They need to get another report, look under every rock for new information, research the heck out of every issue whether or not it is pivotal. Traditionally, discovery cut-offs and upcoming trial dates have put up a big stop sign to that process in civil cases. Without that stop sign, some workers compensation cases continue for decades.

Human nature being what it is, litigants tend to wait to the last minute to undertake the tasks necessary to close a case. The global pandemic has aggravated our proclivity to procrastinate.

When do cases settle? Legal and claims professionals have always referred to the ubiquitous last-minute settlements as happening “on the courthouse steps.” As trial dates get pushed further and further back on courts’ calendars, parties put off settlement longer.

CCP 599 Makes Procrastination Easy
When the global pandemic forced courthouses to close their doors, the California legislature recognized the obstacles to litigants’ ability to move their cases forward. The response was Code of Civil Procedure 599. This new section delays most civil litigation deadlines during the official COVID-19 state of emergency and for 180 days thereafter. If a deadline had not passed by March 19, 2020, the continuance or postponement of a trial date extended that deadline. That includes discovery cut-offs and dates for identification of expert witnesses and motions for summary judgment. Notably, the court retains the power to order litigation deadlines. Parties can also agree to self-impose deadlines which would otherwise be suspended.

At the beginning of the pandemic, no one had any idea how long this suspension would last or how we would all learn to conduct much of the court’s business remotely. Still, 599 remains in place. Some lawyers and claims professionals report that the absence of a hard deadline has resulted in fewer settlements.

Blessing or Curse?
In the last year, we have learned to manage litigation pretty well without setting foot in the courthouse. Doctors have resumed seeing patients. The suspension of many hard deadlines provided breathing room while we figured it all out. These are blessings.

On the flip side, cases are backing up. After courthouse life returns to a version of normal, it will take a long time to work through the backup. Once 599 expires, there will be a rush to undertake long-delayed tasks critical to settlement. Things could get kind of crazy, and that’s the curse.

What to Do Now
Before any more time passes, look at those files to see what can be done to set them up for settlement. Almost all mediations are now occurring remotely. Let’s settle those cases promptly, so you can better manage your caseload once the state of emergency is lifted.

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.

The Role of Empathy in Settlement

Empathy, the ability to see a situation from a different point of view, is an important negotiation and advocacy skill. You must be able to anticipate and understand your opponent’s position to effectively counter it. Debate trainers assign students to argue the position opposite their personal beliefs to foster this skill.
I’m Fine. To Hell With You
Lately we have seen a stunning lack of empathy in our country. On the same day as a county announced that COVID-19 had become the county’s leading cause of death, one resident yelled, “It’s my body and I want to go to work.” Another defiantly asked, “Why shouldn’t I be able to sit in a restaurant and eat?”

The answer is that many people, perhaps the majority, who are infected with the virus are asymptomatic. COVID-19, unlike collisions, drownings, obesity, heart disease, and cancer, is wildly contagious. There is currently no vaccine and no cure. More than 81,000 Americans have died. Around the world, people are not allowed to work in close quarters or sit in a restaurant because that potentially exposes coworkers, servers and other customers to the contagion. Not everyone reacts to the virus the same way.

Similarly, the television journalist who tweeted that anyone who wants to continue to shelter in place should just stay home lacks any awareness of how most people live. If the boss requires workers to show up or lose their jobs, those workers don’t have the luxury of working from home. There are more people living paycheck-to-paycheck to pay the rent and buy groceries than people pulling in big bucks.

And then there’s the 79-year-old Wisconsin Supreme Court Chief Justice who said “regular folks” were not getting COVID-19. Got that, anyone with a family member in a nursing home?

Negotiators need not have suffered a serious injury or business reversal themselves to empathize with someone who has. Perhaps you have had a personal experience which makes you wonder why your negotiating opponent is apparently so much less resilient that you. Again, not everyone reacts to an event the same way. An inability to concede that these are that person’s feelings, even if you think they are baseless, impedes meaningful settlement discussions.

New Law on Settlement Agreements

A new California law effective January 1, 2020 governs settlement agreement language regarding employment dismissals and rehires. An employer and employee can still agree that a settlement includes termination of employment, but the agreement cannot include language that the person is barred from re-employment.

The legislative history of AB749 shows that the motive behind the law was to prevent situations where a sexual harasser remains employed by a company, but the victim can’t get back or hang on to a job. Here’s the language:

“An agreement to settle an employment dispute shall not contain a provision prohibiting, preventing, or otherwise restricting a settling party that is an aggrieved person from obtaining future employment with the employer against which the aggrieved person has filed a claim. . .”

The law specifically allows termination of a current relationship. Also, the law explicitly states that an employer need not re-hire someone when “the employer has made a good faith determination that the person engaged in sexual harassment or sexual assault” or ”there is a legitimate non-discriminatory or non-retaliatory reason for terminating the employment relationship.”

If It’s Not a Sexual Harassment Case?
This law applies to all claims brought by an employee against an employer in any forum, including mediation, arbitration or other internal process. When an injured worker has not returned to work for years, their employment status in certain situations could still be technically “employed.” To clarify that the injured employee cannot access employee benefits, a settlement agreement may include language defining the date of termination of employment or might specify that the employee is resigning.

I have helped create a settlement where status as an employee was reinstated for a minimal amount of time with the proviso that the employee was resigning on a specific date. I have also helped create settlement agreements where the employee was paid as an independent contractor for a limited period.  This will be more difficult now after passage of AB5, also going into effect on January 1, 2020, which tightens the definition of who is an independent contractor.

Settle, Settle, Settle

It’s almost always better to settle than to keep pouring money into litigation. A trained settlement professional can help you negotiate the best result.

Peace on Earth, Good Will to Men

You’re sure to hear this phrase repeatedly in December. What are you doing to make it happen?

Most readers of this message are professionals charged with managing disputes. You may spend a considerable amount of time strategizing how to annul the opposing party’s claims. That’s appropriate. It’s your job. But what practically every party involved in a conflict really wants is peace. Settling parties often say they are compromising in order to get peace.

It’s also your job to achieve the optimal result in a cost-efficient manner. Mediation is a way to achieve that outcome. A trained professional neutral will work with all parties to achieve their own bit of peace– not just at holiday season, but all year round.

HAPPY HOLIDAYS