One of the insurance companies for which you do work [or your employer if you are in house counsel] sends you a new file. It includes a complaint, copies of the correspondence exchanged by the claims rep and plaintiff's lawyer, copies of medical bills and records, and a cover letter from the claims rep that summarizes the status of settlement discussions, if any.

Suggesting Early Mediation Is Not A Sign of Weakness

Pre-discovery mediation can save your client money if the plaintiff has finished treating and/or the policy limits make it imperative that you settle the claim. Contact plaintiff's lawyer and ask for copies of all of the relevant medical information and other special damage information so that you and the claims rep can fully evaluate the claim. Suggest to the plaintiff's lawyer that it may be cost beneficial to have an early mediation to see if the claim can be resolved before the first Case Management Conference. An early mediation will give the claims rep an opportunity to meet and evaluate the plaintiff.

Post-Discovery Mediation

Sometimes you and the claims rep will not be ready to mediate the claim until after you have completed your written and deposition discovery and had plaintiff examined by your doctor but before the parties spend money on expert witnesses. Under the CADRe program, the parties can jointly request mediation at the Case Management Conference. The parties can also agree whether the value of the claim is over $50,000.00. If so, the parties can choose the mediator but must pay the mediator's hourly fee. If the parties agree that the claim's value is under $50,000.00 for mediation purposes, CADRe will appoint a mediator [at no cost to the parties] and the plaintiff's demand will be capped at $50,000.00.

Preparing For Mediation

Prepare for mediation as if you were preparing for trial. Be familiar with all of the special damage information so that the plaintiff will see that you are prepared to try the case if it is not settled.

Meet with the claims rep before the mediation to discuss the case. Find out if the claims rep has enough settlement authority as per your evaluation of the case. If not, encourage the claims rep to obtain more authority.

Provide the mediator with a brief that candidly discusses both plaintiff and defendant's strengths and weaknesses. Include the IME report and copies of plaintiff's medical records.

The Mediation; Sometimes Having To Say "I'm Sorry"

The mediation may be your claim rep's first opportunity to meet and evaluate the plaintiff in person. After the plaintiff has concluded his/her opening remarks, take the opportunity or have your claims rep take the opportunity to:

I. Say "I'm sorry" to the plaintiff. These words do not weaken your case, and may very well result in the plaintiff being more receptive to settling the claim. For example; "Mr. Plaintiff, on behalf of my client and XYZ insurance company, I want to tell you how sorry we are that the accident happened [pregnant pause]; however...." After the however, you can then explain that you believe that "the trier of fact" will learn that: (1) the force of the impact [if this is an auto case] was such that they may be hard-pressed to believe that the collision caused any or all of plaintiff's injuries; (2) the medical treatment was not totally "reasonable and necessary"; (3) the IME doctor concluded that plaintiff was not seriously injured; (4) the lost income claim is not supported by the documentary evidence; (5) etc.;

II. Explain to the plaintiff that if the case does not settle, you will be filing a summary judgment motion and then explain why you believe that the judge will grant the summary judgment motion;

III. Explain to the plaintiff that if the case does not settle, you will be serving a CCP 998 offer before trial and if the plaintiff does not accept the offer, and if the verdict is less than the offer, your client will seek to recover costs of suit. Describe the type and estimated amount of these costs. This may be the first time a plaintiff learns that he/she may not only lose at trial, but also be out of pocket thousands of dollars;

IV. Have your claims rep talk about his/her experience in the venue where the case is filed. Plaintiff lawyers' new millennium clarion call is still to try their "good" cases and settle the others. However, the new definition of a "good" case is a case that has favorable liability, serious injuries, and a favorable venue. Let the plaintiff know if the case's venue is not plaintiff friendly; and/or,

V. Keep egos out of the mediation process.

If you do some or all of the above during the joint session, you have provided the mediator with "reality check" ammunition when the mediator next caucuses with plaintiff. And remember that you need to provide the mediator with the information he/she needs to convince the plaintiff to settle.

"Money Is Like Manure-Good Only When Spread Around"

Carl Sandburg may have made a good claims adjuster when he wrote the above. Remember that most cases will settle once the parties have made offers and demands that are "reasonable". What is "reasonable" depends on liability, causation, damages and venue. Therefore, if your insured is motivated to settle the case, do not make your initial offer so low as to be insulting [In fact, it may be a good idea to discuss settlement with plaintiff's lawyer before the mediation so that both sides know from where the other side is coming]. Remember that it is only when you make the offer seductive enough for plaintiff to have to think about the cost/benefit of settling verses going to trial, that you will move toward settlement. For example, I recently mediated an auto injury case in which the plaintiff was brought back to life at the accident scene, and was scarred from chin to belly button. Her medical specials were over $100,000.00. Plaintiff's initial demand was for several million dollars. The case was filed in a conservative venue and plaintiff had made a remarkable recovery. Once defendant made a "reasonable" offer [which was under seven figures], plaintiff had to do a cost/benefit analysis and the case ultimately settled for less than one million dollars. The only reason it settled was that after all of the posturing, defendant made a reasonable offer. The moral to this story is: absent a reasonable offer, plaintiff has no decision to make and just goes to trial. As defendant's representative, you can prevent this by making reasonable offers which are still less than the case's value.

Conclusion

Notwithstanding statistics that show that personal injury defendants are much more successful than plaintiffs when these cases go to trial, insurance companies want to limit their risks. It is always less risky to reach a reasonable settlement than it is to go to trial. One way to do this is to mediate the case and make a reasonable settlement offer since he who pays the piper can call the tune.