Are You A Courageous Negotiator?

Merriam Webster defines courage as the mental or moral strength to venture, persevere, and withstand danger, fear, or difficulty. The easy way to litigate is to react to catalysts from outside sources, such as the court, opposing counsel, or a medical emergency.

The courageous negotiator is proactive. That includes knowing how to push a claim to settlement. Courageous negotiators have strong values, fully use their skills, and purposely confront challenges.

Keep At It
Especially when claims drag on for years, it’s easy to lose sight of the end goal. Here’s how to keep moving forward:

1. Keep evaluating. Courageous negotiators know what their case is worth. Don’t be afraid to talk about a big number—or a small one– if that’s really the value of the claim. The old saying is that lawsuits are not like wine—they don’t get better with age. Re-evaluate as new information comes in.

2. Make offers. Don’t ask, “Do you want to settle?” Make settlement offers– even ridiculous ones. Solicit counter-offers. Let parties know that you are willing to duke it out, but you are also smart enough to know how to settle. Competent professionals don’t fight simply because they don’t know how to do anything else. Courageous people act even when they face the possibility of an adverse outcome.

3. Get help. Mediation is an effective way to settle cases. Talk to your mediator. A pre-mediation consultation is confidential even if the mediation never occurs. Information shared with the mediator can never be used, and the mediator cannot be subpoenaed. Unlike the parties who must deal with every detail of managing the case, the mediator concentrates on defining and resolving issues to reach settlement. Take advantage of that expertise.

Often the best way to promote communication is at mediation. Parties can be candid about the good and bad points of their case. Bargaining through the mediator can calm anger.
 
An agreement to mediate is not a commitment to settle. It is a commitment to talk about the possibility of settlement. If you’re not getting counter-offers, the mediator can focus parties on what needs to be done to move ahead.
 
There is no charge to talk with me about convening a mediation.

You know that ugly case is probably going to settle. Muster your courage to make it happen sooner.

Winning the Zero Sum Game

Value-Added Negotiating

Many negotiators approach resolution as a zero sum game. Each side’s gain or loss is exactly equal to the other party’s gain or loss. Viewing the resources available as limited can obstruct getting to settlement.
 
Particularly when one or more parties have hit their dollar authority limit, adding non-monetary benefits to the discussion creates a larger number of benefits to divide. Some people call this “enlarging the pie.”

When there are more issues to discuss, parties can “log roll,” i.e., swap benefits across a number of issues, not just fixate on more or fewer dollars.

Different kinds of cases call for different solutions. Unique facts can inspire creativity. Here are some tried-and-true ways to add value.

Resignation
In workers compensation and wrongful termination cases, a resignation can add value. It clarifies the parties’ status and provides finality. Double-check to make sure you do not run afoul of statutory restrictions before raising this issue.

Respect 
In the right case, an apology can move negotiation forward.

Some claimants feel no one is listening. Perceived disrespect leads to resentment which prevents reasonable negotiation. All participants should make sure to show respect for the opponent’s position. One way to do this is by scheduling a mediation where everyone gets a chance to have their say.

Payments
In appropriate cases, you may be able to negotiate to characterize money as non-taxable. If some or all of the settlement can be considered payment for a physical injury or restitution for a loss such as property damage, the net benefit to the payee is greater.

Settlements usually call for a single lump-sum payment. But a different arrangement may be better for all parties. A classic way to do this is through a structured settlement. A structured settlement can provide more money for a claimant without increasing the cost to the payor. Other benefits might include Medicare Set-Aside compliance and professional investment management.

Sometimes, a defendant requests a payment plan. Even the largest defendant may need to spread a settlement over two budget years. When parties agree to a payment plan, a properly worded settlement agreement must spell out each party’s rights, obligations, and remedies.

Confidentiality 
Protection against damage to reputation can be a valuable bargaining chip whether the party is an individual, a corporation, or a government entity. Confidentiality clauses have appeared routinely in personal injury settlement agreements for decades. Defendants and their insurers don’t want to set a benchmark for future plaintiffs. Note: some jurisdictions have prohibited non-disclosure clauses in sexual harassment settlements.

Victory!
Victorious negotiators are those who walk away with a settlement. To get there, discard the zero sum approach. Find ways to add value instead

FOBO Paralysis

Most of us have seen, and maybe used, the acronym FOMO. It means Fear of Missing Out. FOMO is the fear of making the wrong decision about how to spend your time, particularly after you’ve seen internet stories about others doing better. 

Negotiation FOBO
The related condition in negotiation is FOBO, Fear Of Better Options. Fear that there may be a better option prevents negotiators from choosing any option. Seeing reports of great results in other cases, unlikely to be identical, contributes to the situation.

Some people are “maximizers”; they think they must have the perfect resolution. So they need to consider every single option. The trouble is, too many options leads to indecision. Maximizers include the attorneys who want to pursue every avenue of inquiry regardless of the expense in relation to the likely effect on evaluation of the claim.

Happier, more successful people are “satisficers”; they know how to recognize an acceptable deal and move on. Satificers aren’t pushovers. They do their homework.  In mediation, they’re the people who have evaluated the claim based on historic data, expert reports, and their own experience. They present cogent, coherent arguments in their mediation brief. They have considered the downside of walking away from a deal though they might consider it barely acceptable.

To avoid FOBO, negotiators need to prioritize their needs and wants. For most mediation participants, the highest priority is closing the claim with an acceptable outcome. Continuing to litigate means months or years of additional expense and stress. Well-prepared negotiators know the status of the case today and realize that things could get worse in the future.

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?

Litigation Status Reports from the Confederate States of America

THINGS ARE GOING GREAT – LET’S KEEP FIGHTING

The fall of Atlanta “is not a calamity that endangers our cause.”
Montgomery, Alabama Advertiser, September 1864

 

“No former period of the war has contained such elements of encouragement for the South as the present.”
Richmond, Virginia Examiner, February 1865, 60 days before the surrender at Appomattox

 

Many clients receive litigation status reports that parallel the unfounded optimism in the South in the final months of the U.S. Civil War. People who try to settle cases often see litigants with that same willful refusal to recognize a failing battle effort. Parties and lawyers who have been living with a case for a long time may delude themselves about their chances of winning.

 

Lawyers in the Front Line
Typically, the lawyer is the front-line soldier with the best ability to assess how things are going. The client expects reliable status reports and guidance in choosing the best course for the litigation. Corporate and insurance clients usually require reports to include an evaluation.Clients want a lawyer who believes in their case. And lawyers have a duty both to the client and the legal system to represent the client “zealously within the bounds of the law.” But sometimes lawyers prepare status reports which mislead clients to pursue expensive and futile choices.Some lawyers seem to think they are litigation superheroes who can’t be beat. Dig deeper and you will find they settle most of their cases, but at what cost? The justification that the client would have gotten a worse deal without the lawyer’s extreme tactics may not be sound.Many lawyers are like animals burrowing a tunnel who never stick out their head to see where they are. They have a playbook they think they need to follow before even considering settlement. It seems like there is always one more report, one more deposition, one more motion they have to have.Lawyers also fear telling clients the unvarnished truth about their cases because the lawyers want to keep the gig. I’ve seen cases where it is the third lawyer on the case on each side. In one instance, the lawyer told me that both prior lawyers had counseled that the opponent’s settlement proposal was reasonable; each was fired. The current lawyer said, “You and I both know those lawyers were right, and they were fired. I am going to try the case.”
Those battles at Lookout Mountain and Missionary Ridge? According to the Mobile Register, union casualties were “ten times greater than ours.” In fact Confederacy casualties numbered 6,687 to the Union’s 5,815.
 
Psychological Reasons for Unfounded Optimism
There are psychological reasons why people refuse to settle. For example, people need to justify past expenditures, known as “sunk costs.” So they feel the need to keep fighting, even when settlement is the best way to stop that drain. Another is reactive devaluation, where people refuse to credit information from the opponent which conflicts with the belief system they have created for themselves.When litigation status reports only offer a choice among battle plans, clients may not realize settlement could be their best option.

Pass the Buck to the Mediator

Mediation is a good way to get the most belligerent parties to talk about settlement. Opposing sides don’t even have to sit together. Caucus sessions take place among the mediator and representatives of a single side. Nothing said in caucus gets repeated elsewhere without the party’s permission, so caucus is a safe place to discuss the weaknesses of a case as well as its merits.The mediator is a professional neutral. Parties can get the opinion of someone who comes to the case without preconception. This is closest to what could happen in court. The mediator can ask pertinent questions and bring the parties to partial or full agreement.When parties can’t bring themselves to agree, the mediator can suggest a mediator’s proposal to close the case. This allows everyone to save face and does not damage the attorney-client relationship.If you are creating or receiving litigation status reports that don’t consider mediation, an essential part of the plan may be missing. Mediation offers a timely, cost-effective way to end whatever war you’re fighting.

How Much Does Mediation Cost?

You could pay $30,000 for a day with a retired state Supreme Court Justice. Or you could pay about a tenth of that amount for an effective mediator. When you’re ready to choose a mediator, check out the person’s bio (resume, CV) and request a copy of the fee schedule. A few mediators post their fees online, but usually you need to request a current fee schedule.

Who Pays?
In civil cases, the fee is typically split among the parties, though sometimes one side agrees to be the sole payer. In a typical workers compensation mediation involving only the Applicant and one Employer, the Employer pays the cost. If there are multiple parties or issues, such as a serious and willful claim or a third party claim for the same injury, the parties decide how the cost will be divided.

Holding Your Place
Some mediators, including WCMediator.com, charge an administrative fee which protects your choice of date. This fee covers all pre-mediation communications to set up the meeting. Payment confirms the parties are going forward. Some mediators charge as much as $1,000 for a cancellation within seven days of the reserved date.

Special Arrangements
Carve-outs are alternative workers’ compensation programs between employers and unions. Required mediation can be a feature of these programs. There is no cost to the injured worker to participate.

When a judge orders parties to mediate, they often benefit from a reduced-fee arrangement. Sometimes a court will provide free mediation to parties in the courthouse. Outside the courthouse, mediators on the court’s approved panel agree to abide by a fee schedule. This may get you a limited number of hours at no cost or at a reduced cost. Often when such a mediation is clearly progressing towards resolution and time runs out, parties choose to continue mediating at the full-fee rate.

Flat vs. Hourly
Some mediators charge by the hour, and some charge a flat fee for a half or full day mediation. Some mediators specify that in addition to the flat fee, hourly fees will be assessed if the mediation continues past the time allowance. One mediator quotes a “flat half-day fee” on his website which buys “1 hour preparation, 4 hours of session.”Don’t think you can book a half-day for a flat fee and simply go long. The mediator and other parties may have other time commitments.  If you use a full day of the mediator’s time, you will be charged for a full day.Clarify how charges for travel time and expense may be calculated. In addition to his hourly mediation fee, one Georgia mediator charges a flat $15,000 for travel within a five state area plus meal expense .

Features of a flat fee include predictability for the parties and payment up front to the mediator. Using an hourly fee structure assures you won’t pay for more time than you use. Workers compensation mediations are usually complex and take about five hours.

Bottom Line

At the end of the day, the bottom line may be about the same. Under either arrangement, most mediators do a lot of work without compensation, such as communicating with the parties in advance of the mediation. Additionally, if the case does not settle at mediation, mediators typically continue working with the parties by phone to reach resolution without additional charge. Unless you have submitted a human-size set of documents for review (not recommended), mediator preparation time is also free. If you are unsure, ask what the fee does and does not include and what services do not incur a charge.

If you don’t like the billing method on the mediator’s fee schedule, you can request an alternate quote that fits your comfort zone.

The real question is how much that claim will cost if you don’t settle. Mediation is highly effective and efficient in helping parties close claims, an excellent bargain compared to uncertain and expensive future litigation

What’s Wrong With Telephone Negotiation?

A litigation analysis found that lawyers used telephone negotiation in 72% of the cases studied resulting in settlement only 35% of the time. That means that phone negotiation sessions or other settlement processes had to be used multiple times to get to settlement. We can assume that repetition resulted in a loss of time and money for the participants.

In contrast, mediation resulted in resolution 100% of the time in the studied cases. Yet, lawyers used mediation in only 2% of the cases.

Lack of Visual Information
You can’t share documents or other visuals over the phone. Even if all participants to the call are supposed to have the documents in their possession, you can’t be positive they are actually looking at it, even if they say they are, or if it’s the right one.

Body language provides visual cues to the negotiator about how things are going. Facial expressions can show surprise, anger, or anxiety as parties exchange information. You can’t look someone in the eye over the phone. Without the visuals, it may be easier for people to dissemble. Likewise, over the phone you are unable to enhance your own message with gestures or other body language. In mediation, the mediator interprets participants’ body language to better facilitate negotiation.

Getting Negotiators to Pay Attention
Listening is hard work. When negotiators use the phone, they may not be focused. There could be active interference, e.g., flashing lights and text messages on the phone, incoming emails, other notifications from multiple devices, or co-workers coming by. Even without those distractions, people’s attention may drift.

Technology Can Get In the Way
What about using Facetime, WhatsApp, Skype or another video call utility? Theoretically, this could overcome some of the deficits of voice-only negotiation. On the other hand, have you seen the hilarious Tripp & Tyler video about video conference calls? Even when the technology is working perfectly, body language can be difficult to interpret or convey through video.

Video conferencing might be helpful during mediation if, for example, the adjuster or injured worker is in another state and unable to travel to the mediation, assuming the principal negotiators are physically present.

What About Meeting At The Board?
Meeting at the board could resolve some of these issues if the parties come with adequate authority, fully prepared, with all relevant information available to them, and with no time pressures.

How often does that happen?

Privacy Issues When Predators Cause Comp Claims

In the #MeToo and #TimesUp era, employees may be more ready to assert sexual aggression claims than in the past. These situations could lead to a workers compensation claim, a civil suit or even criminal proceedings. Privacy is an issue in each setting, but only in comp is the claims professional engaged in the victim’s medical treatment. Privacy issues merit consideration throughout the life of the claim, including at time of resolution.

The applicability of SB 863 and Labor Code §4660.1(c) regarding the compensability of psych claims is outside the scope of this post.

Who is the adjuster?
Advocacy based claims handling emphasizes empathy with the injured worker.  Adjusting a claim for physical injury from rape, actual or attempted, or a psych claim arising from sexual aggression may call for special attention to who will see the injured worker’s records.  A female adjuster may be best suited to handle a woman’s claim.  But reports of Kevin Spacey’s and others’ behavior remind us this problem is not limited to aggression against women.

An important concern with #MeToo claims is to avoid a string of claims personnel who have access to the injured workers’ medical records as they make treatment authorization decisions. Some companies have procedures to limit access to sensitive records. However, the longer a case is pending, the more likely it is that multiple people will need to see these records, possibly causing additional stress for the injured worker.

Confidential Resolution
As with all other workers compensation claims, early resolution is best. Mediation is the most private place to resolve sexual aggression claims.  Unlike with an informal meeting, mediation confidentiality is mandated by law.

A WCAB hearing may create additional psychological issues for someone who has had these experiences. Assure that person or their representative that participants are barred from disclosing what happens in a mediation in other forums.

Additionally, caucusing enhances a claimant’s privacy. Once I have separated the parties into separate spaces,they can talk to me without fear that anything will be communicated to those in the other room without their permission. As the mediator, I can reframe the injured worker’s concerns to maximize privacy. This environment facilitates case settlement.

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].”

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.

New Year, New You? It’s Your Decision

“New year, new you.” How many times have we heard that one?

Yet, the same problems that vexed us in December are still there in January. You may be planning to lose weight, save money, or spend more time with family. But what are you doing about a new approach to resolve your ugliest workers compensation claims?

Start by identifying claims that are ripe for closure. Look at the injured worker’s birth date; if the injured worker has reached age 61 and isn’t already on SSDI, it’s time to get serious. Is the claim more than five years old? Are you spending time and money with frequent WCAB trips?

Workers Compensation professionals often have a to-do list which actually impedes claim closure. The content of that additional report may be completely predictable. You could settle without it. Meanwhile frustration, disputes, and expense increase.

Call me to talk about whether the time is right for mediation. There’s never a charge for that discussion.