This is the first of a two-part article on litigating and settling large exposure cases.
As a litigator, I defended several products, premises, and aviation accidents resulting in death or catastrophic personal injury. Later I litigated trademark, construction, and other claims with seven and eight figure damage demands. My experience also suggests that adding one or two extra parties to a case is not simple arithmetic because with each party you add a lawyer, client, potentially a carrier or other decision-maker. So, larger cases have exponentially more people in the decisional calculus. This may be obvious on paper, but too often the reality of this dynamic is ignored in mediation practice.
There are some cases where liability is clear, the damages are horrible, and the case is destined to settle because it should. But what if the Plaintiff’s case is a lot harder to win or had more hurdles? What happens when there are multiple defendants with different defenses? How do you get maximum value out of the case? I have some ideas for claimant’s counsel. Next month we will address how the defense might work a more advantageous settlement in a large exposure case. Here are some “must dos” for claimants seeking to optimize their opportunity to resolve the case at mediation.
- Never go into mediation unless you clearly know what insurance coverage is available and which party, if any, has insurance coverage problems. Send an insurance disclosure letter under §627.4137. Rule 26 insurance disclosures are not to be ignored nor taken at face value. Investigate coverage where it is claimed to be absent. Not knowing who has coverage and the available limits is tantamount to mediation malpractice.
- Do not cease doing work and do not put a significant case on ice in the 30 to 60 days before settlement. This is commonly done because defense lawyers say, “let’s save time and money and avoid doing work leading up to mediation”. This is rarely a good strategy for claimants. First, as claimant, you want to pepper the file so the defendant or carrier must pay defense bills. This means the case gets their attention. Even ordinary activity will lead to communication and reporting by the defense attorney which puts the case on the adjustor’s radar (or inhouse counsel). Plus, if the case has been languishing the carrier or client may have old information from a suit report written six months ago and may have set a reserve based on old information. You don’t have to spend a ton of time, just keep the file warm in the days before mediation. Ignoring a file for several weeks sends the wrong message.
- Talk to each defense attorney in advance to see who they are bringing to the mediation. Does that sound like the right person? Be tactful but direct. Ask defense counsel if the designate representative is THE person needed to settle this case? In this day of Zoom mediations, securing key decision-makers is easier than before.
- Set aside plenty of time. Plan for a second day of mediation in a significant case. Ask everyone to devote the whole day and eliminate hard stops at 4:00pm. Every mediation truly begins at 4:30pm. A significant case deserves the time it takes. Arbitrary deadlines are to be avoided.
- Draft a thoughtful and emotionally compelling premediation statement that makes your claimant distinctive, sympathetic and includes a clear statement of damages even if the damages are known in discovery. Some defendant parties don’t read defense reports. Claims adjustors are frequently struggling to manage their files. Send the statement to the Defendant(s) so that all of the decision-makers can read it. Often-times the defendant or the insurance carrier does not get the “ugly truth” from their own attorney – only the good and not so good. This occurs because defense attorneys (like most people) harbor optimism bias which influences their premediation reporting. With younger lawyers often charged with preparing a mediation statement for the senior attorney, you may have an evaluative filter born of ignorance. Be pleasant and be direct but not insulting in the premediation letter. Calling the defendant’s lead witness a liar in a mediation position statement (even if true) is not going to get you more money. Avoid name-calling and pejorative terms. You get more flies with honey than vinegar.
- Roundtable the case with other lawyers. The defense does.
- If there are multiple defendants, make sure each of them has felt a little litigation pain. If you have ignored a co-defendant how can they be expected to pony up a significant share? They won’t because you telegraphed they were minor players.
- Create a compelling picture of the client’s pain or misery using video or quality photographs. A short video is far more compelling than anything you can write.
- Do not overreach. There is nothing more immediately impressive than a claimant’s attorney who leads with high but not absurd demand and cogent explanation of liability. Let the mediator ramp up the heat later. At the end of the day, credibility earned over time is going to make it easier for the payor to honor and respect the Plaintiff’s last demand.
- If you are mediating in-person, bring bodies. In a multi-party case, the defendants, counsel, and the carrier representatives will largely out-number the Plaintiff’s contingent. Bring a show of force meaning co-counsel and staff even if it is a bit of bluff. This is less important with online mediation because the psychological impact is diluted. When COVID ends, don’t mediate in a small room. Small rooms send the wrong message. Small rooms lead to small settlements.
- Think carefully about the impact of surprises. A little surprise is okay, a big surprise will cause the defense upset and anger the client or carrier. This is a big problem if the insurance representative or client believes the defense attorney should have known this information. In other words, a big surprise is like throwing a grenade in the other room. If you have new and significant information send all or most of it to defense counsel before the opening session. Surprises do not and effectively cannot create a larger reserve or pressure to settle on the day of mediation because the information must be “in the system” longer for it be digested and reserves modified – particularly in a large exposure case. Moreover, new information is only as important as the defense sees it. The “weight” of the information is not bolstered by the sandbagging and surprise disclosure. Gotcha tactics move the needle very little and indirectly undermine the strength of the new information. A solid hammer doesn’t need the element of surprise to drive a nail.
- Keep your client quiet unless they make a good witness and limit conversations in front of the mediator unless you need help with client control.
- Never insult defense counsel or raise the specter of legal malpractice by the defense counsel in the opening session. That is a conversation with the mediator. Otherwise, you run the risk of derailing mediation and creating a conflict between counsel, client, or the carrier. The malpractice might already be “priced into” the case valuation so to speak.
Setting the table for a large recovery at mediation takes time and planning. The details you address in advance will accumulate in your favor like a snowball effect, all of which makes your side look well-prepared, confident and compelling. Make it easy for the mediator to champion your cause.
Next month, we cover useful defense tactics for leveraging a good settlement. If readers have comments, advice, or critical commentary, please send your comments and I will publish a follow-up article after the second part of this article is published in March.