Mediate to Comply with this Regulation

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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.

Stop Hiding The Ball: What You Need To Tell The Other Side

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Your best friend in negotiation can be your opponent—provided you put your report where your mouth is. Too often parties withhold evidence which would support their position. Sure, your opponent’s initial reaction may be to denigrate your evidence. But they may not have anything to refute it. It might even be too late for them to try to work up something.
Help Your Opponent Convince Their Client
So why did it take so long to get to this point? Because you have been hiding the ball. If you expect large sums for a life pension or for treatment the carrier had denied plus penalties plus fees, be prepared to show why the employer was wrong. You can’t expect opposing counsel to advise their client to change their case evaluation if you’ve been keeping secret the reports that crush their position. Of course, timing is important. There are many reasons why you might not want to show your hand too early. But by the time you are at the mediation table, you must be prepared to put your cards on the table.

How Mediation Confidentiality Helps
Perhaps you have a sub rosa video or some other smoking gun the other side doesn’t know about. Your mediation brief can be confidential– for the mediator’s eyes only. When you are in caucus (a private meeting with the mediator,) you can discuss secret information with the mediator. If you don’t want it disclosed to the other side, it goes no further. But putting the mediator in the picture allows her to frame the issues in the case to maximize the potential for settlement.

Negotiations succeed when parties are in the same ballpark. If you don’t communicate what your ballpark is, your opponent will assume that their evaluation is the correct one. It’s hard to play in the same game when one of you is at Dodger Stadium in L.A. and the other is at Angel Stadium in Anaheim. To bring everyone to the same field, you have to communicate.

America Runs On . . .

You’ve probably seen the ad:

Courtrooms– even WCAB courtrooms– run on evidence. It’s your job to make sure you have evidence to support your view of the case.

The advice to communicate your evidence so your opponent can help you “sell” your position assumes you’ve done everything necessary to gather that evidence.  That could mean obtaining a narrative medical or vocational report or ordering a Medicare Set-Aside allocation report.

Mediations are efficient and successful when everyone comes prepared with information to support their demand or offer.

The Elephant in the Mediation Conference Room

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Sometimes the issues the lawyers and adjusters are discussing are not what is most important to the Applicant.

Recently, in a pretty small case, the professionals told me the disagreements were about what had been paid and what was still due. The injured worker told me his biggest concern was that, although he had returned to modified duty, the employer had told him there was no more work for someone with his disability. The injured worker was terrified that he would be out of a job with no ability to get another one, but that is not what the lawyers were discussing.

Many times, the injured worker’s biggest issue is not one that is dispositive of any issue in the case, but, in fact, is the driver for the injured worker’s decisions– the proverbial elephant in the room the negotiators are trying to ignore.

Because these are often personal matters, the injured worker may not share these concerns with the employer’s side– or even the injured worker’s own lawyer.

  • The woman with a sick teen-aged son who desperately wanted to control her own industrial medical care, but was afraid that if she C&R’d her case, the lump sum payment would result in the family’s loss of Medi-Cal which provided care for the son.
  • The man suffering from non-industrial cancer whose biggest concern was leaving an estate to support his wife.
  • The injured worker who wanted to return to his home country, but feared that expressing that desire would diminish the value of the claim.

These issues can often be discovered and resolved through mediation. Parties can express their concerns to the mediator confidentially. Once the mediator knows the real issue, the mediator can often re-frame the issues to allow the parties to reach resolution– all without breaching confidentiality.

Don’t Miss the Crossover Issues

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Crossover issues are not strictly workers compensation issues– which is why they are sometimes overlooked. That omission can cost a party money or even lead to a professional malpractice suit. Third Party Claims
Product liability, medical malpractice, and negligent roadway design are examples of third party claims usually unaffected by the exclusive remedy rule. Collisions may give rise to the most common third party claim.

SSDI
Whether and when to apply for Social Security Disability Income (SSDI) are not simple decisions. Federal law is written to make sure a disabled person does not earn more when not working than the person did on the job. The “80% rule” limits the combined total of SSDI and indemnity payments to an injured worker. This rule principally affects lower wage earners.

Medicare/Medi-Cal
Virtually all workers compensation professionals recognize the need for a Medicare Set-Aside in appropriate cases. Correct self-administration remains a challenge. Additionally, practitioners should be aware that two forms of Medi-Cal currently exist: traditional and expanded. Savvy negotiators can often use these programs to create a safety net to cover the injured worker’s medical expenses as part of a Compromise & Release completely closing the claim. C&Rs drafted without considering Medi-Cal issues could imperil medical care for the injured worker and the injured worker’s entire family.

Immigration
Undocumented injured workers are eligible for workers compensation benefits in California. Some undocumented workers have been in their jobs for decades. They remain under the legal radar until a workplace injury occurs. At that point, a false or stolen identity may come to light, creating issues for the injured worker and the employer. The Patriot Act’s provisions about identification required to open a bank account or to send money out of the country can also interfere with an injured worker’s decision to choose a Compromise & Release.

Tax
The tax code provides that money received on account of a physical injury is not taxable. Usually all payments made on a workers compensation claim arise from a physical injury. However, a number of circumstances could trigger taxation. Also, once an injured worker receives a buy-out, earnings on invested or banked sums are taxable.

Get Help
Workers compensation professionals should recognize crossover issues, and counsel should alert clients when these issues appear. The next step could be to bring in an expert in that area, provide one or more referrals, or advise clients to seek professional advice on their own.

You Have To Play To Win

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–How Mediation Is (Not) Like the Lottery–

No, I’m not advocating you play the lottery, but the slogan does apply: you have to play to win. The odds of winning the California Super Lotto Jackpot are 18 million to 1 against you. The likelihood you will be able to resolve your workers compensation issue in mediation is more like 80-90% in your favor providing you participate.

Take a Calculated Risk
The only settlement offer without a chance of acceptance is the one you never make. Some parties complain that they can’t settle the case. Yet, those same parties refuse mediation or come to mediation unwilling to negotiate. You cannot expect resolution in mediation if your position is to never move off the number that was refused pre-mediation. You have to play to win.

Playing the lottery is the classic example of a blind risk. A blind risk embodies an irrational hope, an action based on nothing more than emotion, expecting something for nothing. A person who takes a calculated risk, on the other hand, has objectively assessed the situation and examined the upside and downside potential. This is true for investors, explorers, world leaders, and negotiators.

First evaluate, then negotiate
Before you can effectively negotiate, you have to do your homework, i.e., run the numbers to evaluate the claim. Once you have considered the best and worst alternatives to a negotiated agreement, you are ready to proffer your demand or offer. You have to play to win.

Mediation allows the people with the most knowledge about the claim to take control of resolving it. During mediation, the mediator can help you calculate your risks and negotiate resolution.

How Minimum Wage Laws Affect Indemnity Payments

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SAWW is going up. The California State Average Weekly Wage determines the annual adjustment of the minimum and maximum payments to persons receiving temporary disability benefits per Labor Code 4453(a)(10). The State Average Weekly Wage also determines the adjustment to payments to persons receiving a life pension or total permanent disability indemnity per Labor Code 4659(c).

In June, the Department of Industrial Relations Division of Workers Compensation announced an increase for payments starting January 1, 2017. The minimum TTD rate will increase from $169.26 to $175.88 and the maximum TTD rate will increase from $1,128.43 to $1,172.57 per week.

In a separate development, a new rule gradually raising the minimum hourly wage to $15 by January 1, 2023 was signed into law in April. A rising minimum hourly rate will increase the State Average Weekly Wage over the next seven years and in consequence some workers compensation indemnity benefits.But there’s a safety valve. After January 1, 2017, the governor can delay any scheduled increase for one year if certain economic or budget conditions exist. The economy has been expanding. Some experts predict a collapse.

Effect on Settlements
When evaluating claims for settlement, parties may have to consider how the expected SAWW increases will affect the value of future indemnity benefits. The minimum hourly wage increases are small, 50 cents the first two years and a dollar a year thereafter. Is this enough to affect the historic rate of increase we have seen for life pensions? Claims subject to minimum and maximum TD increases are most likely to be affected. An across-the-board increase in claim value will also increase attorney compensation.

Predicting is hard.  Settling sooner rather than later avoids uncertainty.

THE ONE THING TO DO TO MAXIMIZE MEDIATION SUCCESS

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Preparing a mediation brief is the one thing you can do to maximize the likelihood of a successful mediation. The goal in mediation is to define issues and resolve them. You can get a head start by alerting your mediator to the issues and suggesting why those issues tilt in your favor.

Lack of a brief unnecessarily lengthens the mediation. Your mediator is probably being paid according to how much time is spent in mediation. Effective resource management dictates you don’t want the mediator to have to spend the first hour—or two or three—digging out the issues.

Mediation can be an exhausting process. People get cantankerous which makes negotiation more difficult. Short-cutting the mediation by defining issues in advance can keep participants at their best.

The brief need not be formal. A letter may be adequate. If you are in doubt about how formal your brief must be, contact the mediator and ask.

A party who does not brief the issues may be allowing the other side to define the discourse. Send your brief to the mediator far enough ahead of the mediation so the mediator has adequate time to review it.

The mediation brief you send the mediator is confidential. You decide whether to share it with the opposing party. Information disclosed to the mediator during mediation is not discoverable. The mediator cannot be subpoenaed. This allows you to control when to disclose your “smoking gun”—maybe not until trial.

Some parties prepare two briefs: one for the opposing party and one for the mediator. More commonly, a party prepares just one, but may decide to waive confidentiality of the brief during mediation.

The Regulation (Almost) Nobody Follows

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“If a party requests that a defendant provide a computer printout of benefits paid, within twenty (20) days the defendant shall provide the requesting party with a current computer printout of benefits paid. The printout shall include the date and amount of each payment of temporary disability indemnity, permanent disability indemnity, and vocational rehabilitation maintenance allowance, and the period covered by each payment, and the date, payee, and amount of each payment for medical treatment. This request may not be made more frequently than once in a one-hundred-twenty (120) day period unless there is a change in indemnity payments.

A defendant that has paid benefits shall have a current computer printout of benefits paid available for inspection at every mandatory settlement conference.”
California Code of Regulations Title 8 §10607.

The benefits printout is the foundation of every workers compensation claim evaluation. Yet, workers compensation professionals often ignore the basic exercise of examining claim expenditures. Attorneys sometimes come to mediation with a rolling cart holding boxes of documents. Yet, when asked for the printout, they have to contact their office or the adjuster. Stranger still are the answers I sometimes get to the question, “How did you get to that number?” When I ask participants how they formulated their demand or offer, their answers may have no relation to actual claim exposure.

Showing up at a mediation or mandatory settlement conference without having scrutinized the printout numbers is inefficient, maybe even sloppy. Better practice is to obtain the printout in advance and create projections to support your claim evaluation.

Workers compensation professionals should review past medical expenses to project future expenses. Of course, parties may disagree about what expenses are reasonable and the likelihood and duration of future care. A medical recommendation for a new treatment (which may be disputed) can skew the numbers. For example, resolution of one mediated case hinged on a medical recommendation for a newly available prosthetic device.

The printout is also critical to resolving retro and overpayment disputes. When parties disagree about whether payments in a given time period should have been paid at the PD or TD rate, the printout is the best evidence of what was actually paid.

When both sides look at the printout together, they can often resolve their disagreements with a little help from the mediator.

Settlement Season

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settlement-seasonHere we are in the fourth quarter of the year or as some call it, settlement season. Workers Compensation cases seem to drag on, but as year-end approaches, everyone in the system suddenly wants to get claims off the books. There is good reason.

Claimants on the road to settlement often want to complete a buy-out in time to get cash for the holiday season. Carriers have to report to state insurance departments how many claims are open at year-end. Self-insureds want to avoid funding a bond for another year.

If you haven’t previously mediated a Workers Compensation claim, you might feel a bit intimidated. You don’t have to commit to a settlement in advance of mediation. In fact, many mediations start with parties insisting the claim will not settle.  Yet, the majority of those mediated claims do result in settlement.

Parties just need to agree to sit together with the mediator to discuss the issues. Once everyone is on board, a mediation can be scheduled quickly. Unlike a WCAB hearing, participants can take all the time they need.

When parties collaborate in mediation to define issues, they often find themselves resolving those issues. Minimally, everyone will be on a firmer basis to move forward.

YOU HAVE TO GET OUT OF B-E-D TO SETTLE

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Maybe being in BED- Blame, Excuses, Denial- is really what’s blocking your ability to close claims.
Blame
It’s easy to blame the other side. “The adjuster/ defense attorney/ applicant’s counsel isn’t paying attention.”  “They’re keeping the case going for the wrong reasons.” Whatever. The only person you can control is you. Without casting aspersions, start communicating anew keeping the end in sight. This might mean sending an email AND a letter, calling and maybe texting. Bring in your favored mediator AND file a DOR.
Excuses
Let go of the past. Maybe you made a mistake or missed an opportunity which would have set the claim on a better course. How much could you have settled that claim for 4 years ago? Resolve to start over today.

Denial
Get serious about evaluation. You can’t properly manage a claim if you shut your eyes to the true cost of keeping it open. In “old dog” cases, medical expenses almost always go up. Even when a drug is scheduled to go generic, a new, better, expensive drug becomes available. A settlement has to cover the injured worker’s future claim-related medical expense. Six percent is not a realistic discount rate. On the other hand, let’s be honest about what treatments the injured worker will actually use.

Get Out of B-E-D Now
Changing your attitude can change your results.

Maybe you made a mistake or missed an opportunity which would have set the claim on a better course. How much could you have settled that claim for 4 years ago? Resolve to start over today.