How to Achieve Optimum Results at Mediation in Personal Injury Claims
By Robert M. Tessier
Twenty years ago, Alternative Dispute Resolution consisted of the Mandatory Settlement Conference. Often the MSC was convened before the judge who would try your case if it did not settle. Some judges had good skills at settling cases, but often the MSC involved a combative posture on both sides, an evaluation, and more often, intimidation by the judge, and each side leaving an hour or so later more intent on trial than before the MSC. Ask any attorney with gray hair and you will get a story of being screamed at by the judge at an MSC when they were a young lawyer. The MSC could be far from a pleasant experience.
The parties were correct back then to turn the MSC into a competitive exercise. Showing weakness, or revealing confidential information to the judge who would ultimately try your case could be dubious. It made more sense to display confidence in your case, keep the client as far away from the judge as possible, and hope to get some additional information about your opponent's case to help you at trial. The defendant wanted to get the plaintiff's attorney to "cave in" and the plaintiff's attorney wanted capitulation and full value. So much for ADR in its infancy.
The trial lawyer could afford back then to swagger into the MSC and not settle his case. That is because the trial lawyer of twenty years ago had a friend in the jury. As designed, the jury system was the great equalizer, and paved the road to justice for the common man-the little guy. Today, jurors in most jurisdictions are less receptive to the claims and arguments of personal injury plaintiffs. Though the burden of proof has not changed in the eyes of the law, it has in the eyes of the jurors. And that eye has become jaundiced when damages are at issue. Moreover, the cost of litigation has risen significantly, and political influences threaten the tort lawyer's practice.
In this world has evolved the lawyer who is trained and experienced in mediating the civil case.
Experienced mediators understand that negotiating a personal injury case is a difficult exercise compared to other forms of negotiation. In business disputes, often there are several key points to negotiate. This allows for give and take to cobble an acceptable deal. The parties are motivated to deal in order to preserve a business relationship. Most importantly, the damages are not "personal". Compare this scenario to a personal injury case. There is one key point: dollars. The parties hope to never see each other again, so there is no ongoing relationship. The injuries and damages are personal and often life changing. Nothing reeks more havoc on the human mind than physical pain and emotional suffering, and consequently, many victims are not prepared to consider placing dollars on their agony. Therefore, short of a creative mediator, the process can turn into a distributive bargaining exercise quickly. This does not mean the case will not settle, but the more challenging case probably will not settle.
Bearing this history, and the inherent challenge of the personal injury case, in mind, the attorney coming to the table in a mediation can not approach the process in the same way it was done in the 1980's and before. What, then, are the most important things to do in preparation of the mediation to achieve success?
1. The pre-mediation meeting with the client.
The plaintiff's lawyer takes her client as she finds him. From a strategic perspective, it is critical to decide whether or not to make your client the centerpiece of the mediation, or keep him offstage. Many mediators will conduct a "joint session". Others will not. But if you have a client who can make an impression on the decision makers for the other side, strongly consider allowing him to actively participate. A claims adjustor, corporate representative, or the defense lawyer who will actually try your case probably has not seen your client. They have read a summary of a deposition, and perhaps a medical report by a defense doctor. Your client is not human to them yet.
Having made the decision to permit the plaintiff to actively participate, there is work to do in preparation.
A. Explain compassionately the process and the goals of not only mediation, but also the justice system as a whole
Attorneys understand what our system is about. Conversely, most clients have resorted to the legal system not as a primary goal, but as a last resort. In catastrophic injury cases, or wrongful death cases, there is a tremendous emotional component. Overlaying the grieving process can be a desire to inflict punishment on the other side. Or perhaps a plaintiff tried to get an explanation from the defendant, but felt she was never heard or ignored, and therefore sought an attorney. Even in smaller cases, the plaintiff just wants to get out of the legal system with all her bills paid for the doctors and her earning loss reimbursed, and a little bit in her pocket in general damages. She feels forced into the system because the insurance company would not make a fair offer unless and until she hired a lawyer. It is important for you, as the advocate for your client, to be able to empathize with your client's plight as litigant and validate these feelings before attempting to define expectations.
Focusing on the catastrophic cases, a pre mediation meeting is hopefully another touchstone that the attorney can use to help the victim or her family through the grieving process. Mediation at the early stage of such a case may be premature even if liability is clear to all involved because the decision maker is not ready to let go of the emotional component. How can the attorney break through this barrier?
First and foremost, though obvious to the attorney, it must be openly discussed that our legal system can compensate only with money no matter what the responsibility of the defendant or the horrendous loss that has been suffered. There has never been a plaintiff in such a case who would not gladly trade away all potential dollars to have his life back as it was, or to have back the loved one who died. If Orson Wells' Time Machine were ever invented, then the line to step into it or roll one's wheelchair or hospital bed into it and turn back the clock would be endless. Speaking of dollars for such anguish and damage can seem insulting or demeaning when not placed in context. Yet this is the business of personal injury attorney. Speaking plainly to the plaintiff about this issue can be cathartic. The attorney humanizes herself, and it continues the healing for the client.
However, never patronize a person who has suffered through the horrors of a tragic loss. Rather than "I feel your pain" try "I know I can never understand all of the terrible losses you have suffered." And then, listen!
A plaintiff whose heart is hardened and wants to inflict pain through the legal system needs her attorney to empathize with the underlying pain and understand what brings a person who, pre-incident was a delightful and optimistic person, to such a painful place. The attorney can have no real credibility on an emotional level unless he is prepared to step into this breech. Ordinarily, it is hurt and loss that drives vengeance and punishment. Money can not take that hurt away. But empathizing with a client who feels this way and showing him that the only way out of such a place is to demand accountability without vindictiveness can help to give a good mediator a reasonable chance of brokering a just settlement.
This need for empathy is painfully true when a family has lost a child. It must be validated that no amount of money could ever suffice to compensate a family for such a horrible loss. This type of case is an emotional minefield. How could such a case ever settle? The intangibles such as a coherent explanation of what happened, an apology, a creative solution to honor the life of the decedent with a memorial, a plaque, or a donation to a charity can and do facilitate an end to the drama of the court case. Only then does the true emotional healing begin.
If the plaintiff's attorney has begun the dialogue on these painful issues, then the chances of success at mediation has substantially increased. A mediator often must find and disarm land mines: bombs below the surface that can kill any chance of a deal. If you expose some of those land mines, a just resolution becomes more probable.
B. Carefully prepare the Client to Present Her Story
For those cases in which you believe that it is to your strategic advantage to make the client a centerpiece of your mediation, carefully go over her story. Prepare her that she will face the defendant. It will be her chance to look the defendant in the eye and speak about the facts of the case. The client becomes a person, a human being rather than a claim number, or a case caption.
If your client has been deposed, this preparation is easier. There is less concern that you are giving away any critical or secret information. There always are issues or facts that were not covered sufficiently in deposition, no matter how skilled the questioner for the defense. This is why if you choose to present your client and allow her to speak in mediation, there should be no direct questioning or cross-examination at mediation, even with the protection afforded all that is said in mediation.
It is important, however, to heed the advice of the skilled mediator on this point. If you are being dissuaded by the mediator to engage the opposition in joint session, it is wise to take heed. Trust in the mediator makes this leap of faith less difficult.
Thorough preparation must involve finding the places in the story where the version of the plaintiff and the defense diverge. If there are witnesses or documents that make the plaintiff's version more believable than the defense, have this information ready to share with the mediator in private caucus. Trust the skillful mediator to use this information to extract maximum value as the process moves forward. Sometimes value enhancement dictates it be revealed early on, other times meted out over time.
The same advice holds true for information recently acquired. A party may come to mediation entrenched in a position because of discovery done to date. New information, such as a witness statement, or an expert deposition, or a recent verdict in a similar case can cause a party to re-evaluate. Though a judgment call, in situations where the parties begin the mediation either without any prior negotiations, or if they are far apart, this type of new information could be more useful held until private caucus. The mediator can work privately with the other side to obtain commitments to re-evaluate if additional information is provided before it is actually revealed.
How do you know if your client should speak in joint session? This is more art than science. If you believe that the defense attorney already considers the plaintiff to be a good witness on her own behalf, then you are on the horns of a dilemma. Because her stock is already high, she has nowhere to go but down if she is an active participant. If the decision makers on the other side want to hear from her, a short exposure is probably a good idea. If the defense does not believe that the plaintiff makes a good impression, but you do, then check out your perception with a partner, or colleague. Lawyers can get tunnel vision due to the passion brought to the case, and the heat of battle. These type of reality checks can be very insightful.
When in doubt, do not opt for a joint session in which your client speaks. Instead, wait for private caucus and listen to and evaluate the mediator's thoughts as the mediation progresses. Mediators are trained to hunt down the deal, and will know the pressure points without revealing them to you directly. If you get a suggestion that a meeting involving your client taking an active role is suggested, that suggestion should be seriously considered. This is why there should be preparation of the client even in the cases where the lawyer is not committed to having the client present.
The MSC was less successful than mediation because it consisted of distributive bargaining interspersed with bloviation and puffing. Mediation puts the control of the process and the solution back with the parties, and the creativity of the mediator. But what about expectations?
In any case, the plaintiff must be prepared for the phases of mediation. Generally, the mediation breaks down into discreet phases. First, the joint session (although this phase is falling more out of favor with many mediators). Second, the private caucus (where negotiations are secondary to finding land mines and determining how ripe and ready the case is for settlement). Gathering and sharing information is also a primary purpose of this phase. Third, talking turkey, that is, dollars in one of several different methods at the mediator's disposal. Fourth, if negotiations and the mediator's efforts do not bring the parties together, the mediator's proposal. Fifth, if all else fails, the follow up phone calls and continuing work by the mediator to broker a settlement. This may involve continued litigation and a second session, as necessary.
No mediator can turn a sow's ear into a silk purse-unless he starts with a silk sow of course! Plaintiff's lawyers with gray hair today can recall the golden era where a soft tissue injury with $5,000.00 of chiropractic bills settled for about $15,000.00 with one letter and two phone calls. Can anyone remember the last time that happened?
That same case will get an initial offer of anywhere from $500.00 to $6,500.00 depending upon property damage. A client will wonder what is wrong with her lawyer upon hearing this news. After all, her dad told her that her case was worth $15,000.00 because that's what he got for his case in 1984. We all know that with inflation $15,000.00 is a bargain for the insurance company!
So controlling expectations begins in soft tissue cases with the initial client interview. Prior to mediation, this issue must be revisited. Maximizing value in a case like this comes through making the case unique, and set apart from the other hundred auto cases the tired adjustor is handling. What will set the case apart?
- Good photographs of significant property damage
- Ambulance/Emergency Room
- Family doctor vs. lawyer driven medical treatment
- Good notes from the doctors and good reports with reasonable medical costs
- Solid earning loss
- No prior claims by the plaintiff
- Bad conduct by the defendant
Unfortunately, when the converse is true, the carrier will often take a hard line position. How many cases have these facts:
- Low damage/photographs that are not impressive
- Delay getting to the doctor
- Lawyer referral to the doctor
- Terrible record keeping by the doctor or her office with poor reports with exaggerated or uncommonly high medical costs
- Shaky earning loss
- Multiple prior claims by the plaintiff
- Liability dispute
Successful mediation with these troubling facts will always involve flexibility on the plaintiff's part. These cases can be tried cheaply in limited jurisdiction court. But this threat is often not enough to get dollars that the plaintiff believes is fair. If the case is one that must be settled from the plaintiff's viewpoint, then it is critical that medical liens and billing be analyzed and negotiated before mediation.
2. Deal with Medical Liens Ahead of the Mediation
For most plaintiffs, the negotiation will eventually get to the bottom line: "how much will I get in my pocket?" The answer to this question can depend upon a number of factors.
However, nothing can cause loss of traction faster in a mediation, and prevent an answer to this important question, than uncertainty regarding medical liens. Though the details of all the types of liens is beyond the purview of this article, accurate government lien amounts through Medicare or Medi-Cal can take weeks or months to obtain. The attorney has a duty under each program to provide notice of the third party action. The methodology to reduce these liens is codified, and once the gross amount of the bills is known, the amount of reduction is simple mathematics. It is getting that gross number that can take time. Failure to do homework prior to mediation will make the case not ripe to settle, unless the client is prepared to take the risk of settling for an amount inclusive of all liens and gamble that she (read: you) know the amount of the billing.
Contractual liens are signed by the client, and the attorney. The attorney is bound pursuant to the terms of the lien to withhold sums sufficient from any settlement or judgment to pay the full amount of the lien. However, in this brave new world, most medical providers have grown accustomed to being asked for a reduction of the lien amount. It is good practice prior to mediation to make contact with these lienholders to determine if there is any willingness to consider a reduction given certain circumstances.
Other liens by medical providers are governed by ERISA or Civil Code section 3040. Still others, such as Civil Code section 3045.1 which benefit providers of emergency and ongoing services to indigent patients, are directed to the defense by way of notice. You will know of such a lien during negotiations as the defense can be held responsible to the lienholder for the amount of their lien if they fail to pay it. Bear in mind that if any portion of the monies used by the State to pay any governmental lien comes from a federal source (medi-cal gets approximately half of its funds from the federal government) then balance billing is prohibited. This means that only the amount actually accepted by the provider is the lien amount, not the reasonable value of the services.
It is good practice to have the answers to these questions before the mediation. The discussion should be only between lawyer and client, unless the lawyer needs help discussing these issues with the client. Only then, when asked, should the mediator inject herself into the discussions of what the client will net from any settlement. Mediators must respect the attorney-client relationship and leave the control over the decision to settle with the client with learned input from her lawyer.
3. Don't Draw First Blood, But Don't be Afraid to Hit Back
Many lawyers from the "old school" just can not resist resorting to the MSC style of posturing. The mediation may begin as a competitive exercise full of confident pontificating about the sure winner this case will be at trial. A generous offer of a waiver of costs is smugly put on the table. Unlike Disneyland, such mediations are not the happiest place on earth. Such tactics are also the main reason why many mediators resist convening the joint session. It is easy to chase the skunk out of the room, but much harder to clear out the odor.
Most just settlements require a cooperative effort. But not all participants in the process are cooperative negotiators. What can be done to shift the mediation into a productive place?
Do you want to be the first to make the mediation a competitive exercise? The risk is that your move will be interpreted as a lack of interest in negotiation, and the mediation will terminate. No one reacts well to threats, and lawyers as a breed thrive on competitiveness.
The best advice is to not be the party to draw first blood and make the process competitive. However, once your opponent does this, you must strike back, or you risk being walked over as the negotiation proceeds. But strike back while simultaneously holding an olive branch for future good behavior.
How does this work? When faced with the competitive negotiator's pontification about how strong the defense case will be at trial, avoid the temptation of arguing at that time. Respectfully disagree and re-frame your case to be different from the stereotypical or imaginary case in the head of your opponent. Then, arm the mediator with facts that undermine the defense position. This can be in the form of undisclosed expert reports, witness statements, or prior lawsuits and claims. Trust the mediator to get a shift from the defense by using such information strategically as the mediation unfolds. You will gain points with your opposition by not reacting to the deliberate posturing. A skilled mediator will eke concessions from the competitive opposition, while always offering a way out of the competitive conundrum.
A competitive negotiator will continue in this style until she realizes that 1) it is not having the intended effect on the opposition, 2) it is not in the client's best interest, and 3) there is a viable alternative that will accomplish the ultimate goal for the client. It is therefore important that the opposition determine what the objective is. Much like a poker player must discern the unseen hand of the opponent based upon incomplete information, the litigant must know as much about the style and past history of the adversary, the interests of the opponent, and the facts of the case as possible to correctly judge the objective.
Competition is designed to instill fear, uncertainty and doubt. Displaying calm and calculated countermoves will show the opponent that the tactic will not work. Arming the mediator with facts that undermine the entrenched position of the opponent will maximize your position. Offering a spirit of cooperation even when counterpunching will bring your opponent to his senses and to the table in earnest.
Steering the mediation into a cooperative endeavor may not be what lawyers are taught in law school and in a litigation practice. However, when viewed from the perspective of what can be done to advance the best interests of the client, this approach can be safely undertaken in a confidential mediation.
No, it is not your father's ADR. But the tremendous expense of a trial, coupled with the control and creativity that mediation offers, ensures mediation a permanent place in dispute resolution.
Robert M. Tessier is an attorney in Calabasas and long-time CAALA member. He has participated in hundreds of mediations as an attorney and a mediator, and has transitioned his practice from litigation to ADR. He has served as a CRASH settlement officer, a panel mediator, and a pro bono mediator with the Los Angeles County Alternative Dispute Resolution program. He is co-founder of the Centres for Excellence in Dispute Resolution and a frequent speaker to businesses on the issues of alternative dispute resolution.
This article provides practical insights into the mediation process by an attorney who has participated in, and presided over hundreds of mediations. Special attention is paid to the particular problems faced by the plaintiff's attorney when exploring the emotional issues of his client, the importance of medical liens, and how to deal with the competitive opposition.