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

New Rules Of Professional Conduct For California Lawyers

                                                 New Considerations in Settlement and Case Management 

The California Supreme Court has approved new rules of professional conduct for attorneys licensed in California which go into effect November 1, 2018. These rules generally expand the existing settlement ethics rules. Violation of the rules can lead to a range of disciplinary actions, including disbarment. Here are the ones which affect people trying to settle a case.

Client Communication
Prior Rule 3-500 in a single sentence required lawyers to keep clients reasonably informed about significant developments. New Rule 1.4 is more detailed. Now there’s a two-way street: the lawyer must reasonably consult with the client about how to achieve the client’s goals. What’s more, the lawyer must also inform the client about what the lawyer cannot legally or ethically do even if it’s what the client expects.

Prior Rule 3-510 required lawyers to promptly communicate the specifics of a written settlement offer. A California lawyer need only pass along a spoken settlement offer if the lawyer deems the offer significant. New Rule 1.4.1 preserves this distinction.

In evaluating settlement offers or making other decisions about the representation, the Comment to new Rule 2.1 clarifies that a lawyer can initiate advice to a client on relevant, non-legal issues, such as moral, economic, social and political factors.

Diligence
Prior Rule 3-110 defined “competence” as including diligence. Now a separate Rule 1.3 prohibits a lawyer from “intentionally, repeatedly, recklessly or with gross negligence” failing to act with reasonable diligence.

New Rule 3.2 says “a lawyer shall not use means that have no substantial purpose other than to delay or prolong the proceeding or to cause needless expense.” Now an ethical rule may apply to needless court appearances and continuances and improperly postponed treatment.

Truthfulness
New Rule 4.1 prohibits lawyers from knowingly making a false statement of material fact or law to a third person, i.e., someone who is not a client, such as an opposing party or witness. A lawyer cannot knowingly incorporate or affirm the truth of someone else’s false statement. A nondisclosure is the equivalent of a lie if the lawyer makes a partially true but misleading material statement or omission. On the other hand, the Comment to the Rule clarifies that there is no affirmative duty to inform an opponent of relevant facts. Representations about case value are not statements of fact or law.California Business and Professions Code sec. 6068(d) requires lawyers to represent clients with methods which are “consistent with truth.” A lawyer who intentionally deceives the court or any party can be charged with a misdemeanor. This statute remains in effect.Everybody Who Acts For the Firm
Prior Rule 3-110 included within the duty of competence a duty to properly supervise lawyers and non-attorneys or agents. New rules 5.1, 5.2, and 5.3 expand on that and provide for vicarious liability for a breach. A subordinate lawyer has an independent duty to follow the rules, but is not responsible for following instructions when there is an arguable question of professional duty.

 

Humility Leads to Mediation Success

Here’s an oxymoron for you: the humble litigator. Like jumbo shrimp and military intelligence, it may seem ridiculous to pair humility with any litigator. But for anyone trying to settle a claim, a little humility can help get you to the finish line.

Most of the time that dispute will eventually settle without court intervention. The parties want to resolve the issue with the smallest expenditure of time and money. Incivility, bias, prejudice and anger are inconsistent with humility and get in the way of settlement.

Acting with humility does not admit fault. The most successful litigators are courteous and respectful.

I’m The One Who’s Right
Of course you are.

Then why is the other side fighting so hard to say the opposite? Of course they’re completely wrong, but maybe, just maybe, you could pretend they have a reasonable point of view. Or—here’s a shocking concept—try to see their point of view.

 

Students learning to debate (or get through law school) may be asked to argue a position with which they disagree. While preparing for mediation, try to outline the other side’s position and think about all the reasons supporting that position. This is an excellent way to marshal your own arguments.  It is also an exercise in empathy.

You Want Me To Do What??
Think about forgiveness. When you feel wronged, your desire for vindication may make negotiation difficult. Forgiveness must be internal and not necessarily verbalized.

Forgiveness is about moving on, doing the best thing for you and those you represent, not for the benefit of the offender. Forgiveness keeps you in control of your emotions rather than surrendering control to the volatility of others. Forgiveness does not validate the other side’s behavior or minimize the damage it has caused. It doesn’t mean you were not wronged or that the parties will have a good future relationship.

Conversely, a well-phrased apology has helped settle many a case. For example, I watched one litigator, without any prompting and without admitting fault, express sorrow that the injured worker had experienced a lengthy delay in getting treatment. That may not be right for your case; for his, it was. Don’t forget that everything said in mediation is confidential and cannot be used for evidence in any forum.

Good People, Strong Emotions

You’re a good person, right? Yet, difficult situations can spark rage and other extreme emotions in the best of people who then behave without humility.

In mediation you can state your position in the strongest terms in a private session with the mediator. The mediator can then skillfully communicate those emotions to move parties to settlement.

A bit of humility can improve your effectiveness in formulating and reacting to those communications.

Documenting the Mediated Agreement

Almost all of my mediations end with agreement to a Compromise and Release. Parties often bring a partially completed Compromise & Release form, DWC-CA form 10214(c), to the mediation. That’s great. But when considerations prevent execution of a final agreement at the mediation, a Memorandum of Understanding, known as an M.O.U., can be invaluable.

What Is It
After working hard to come to terms, you don’t want to let the passage of time blur people’s memories or minimize their commitment. Participants should not leave the mediation without a record of their agreements.

A Memorandum of Understanding memorializes the skeleton terms agreed upon at the mediation. Parties sign off at the mediation. The M.O.U. might specify a timeline or conditions.

If It’s Complicated
Some settlements are complicated, requiring many addenda. Unanticipated issues may have arisen and been resolved at the mediation. Parties need to return to their offices to draft the final settlement document. The M.O.U. should specify the basic terms as well as deadlines for completion of the initial settlement document, exchange of revisions, and submission to the WCAB.
Conditional Agreements
Some agreements are conditional, usually upon CMS approval of a Medicare Set-Aside allocation. Attorneys may address this issue by doing everything but the walk-through, including signatures, pending approval. This leaves a potentially dangerous loophole when unforeseen events occur during the waiting period.Another way to document a conditional agreement is through an M.O.U. Unlike the agreement which sits in a file drawer, an M.O.U. can specifically address the condition, including what will happen if the condition cannot be fulfilled. For example, if CMS comes back with a higher amount, and the parties do not assent to that amount within a specified time, they can agree to return to mediation.

Getting to MOU

Mediation allows parties to address issues outside the jurisdiction and procedures of the WCAB and to fashion creative solutions.

If you have despaired of closing that troublesome,  decades-old claim, turn to mediation.

Take the bull by the horns, and the result may well be an M.O.U.

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?

3 Ways to Evaluate Future Medical Care

Evaluating future medical care is usually the most challenging component for parties trying to settle a workers compensation claim by Compromise & Release. If your crystal ball is in the shop for repairs, try one of these methods.

Medicare Set-Aside
You don’t need a Medicare Set-Aside for claims outside the review thresholds, but claims professionals often order one to get the medical expense analysis. If the report’s only use will be for internal purposes, there is no requirement to share it. If you disagree with a report, you can provide further information to the provider and request revision. Or you can order another report from a different provider. Applicant’s counsel can request the claim professional order an MSA.

Don’t forget that the Medicare Set-Aside amount does not include amounts for co-pays, deductibles, or non-Medicare-eligible expenses.

 

 

Historic Expenses
Don’t be shy about requesting a copy of the print-out of expenditures. Spending some time with the medical expense print-out can be revealing. Total the expenses for the last two or three years and divide by the number of months being reviewed to obtain the average monthly expenditure. You can include claim administration expenses to show what the employer has been spending or omit those expenses to better reflect the actual expenses likely to be incurred post-settlement.

Review the expenses to see if some items are atypical. Is there a major surgery which will not recur? Has the injured worker stopped taking expensive opioids? Omit those items from your calculation, but include the expense for substitute treatments or medications. Conversely, if credible medical reports indicate a future large expense, the evaluation can be increased.

Revisions are not usually a problem because it’s easy to omit a past surgery from the historic total or to change the time period under review. One-time future large expenses can be added as a lump sum.

Once you have determined the average monthly medical expense, your structured settlement broker can quickly calculate the present value of future lifetime care, including an inflation factor to account for rising prices. This figure can purchase monthly payments to be paid to the injured worker or a medical expense account. The broker’s services are free, but be sure to keep that broker in the loop for future settlement discussions.

 

 

Health Insurance Premiums
Many injured workers can get health insurance for their medical expenses after workers compensation coverage stops. Some may already have that insurance. Injured workers who lack health insurance should check with a health insurance agent or www.coveredca.gov to determine their access to an appropriate policy and the cost.

Once you know the premium amount, add in a generous inflation factor plus an allowance for any co-pays and deductibles. Again, your structured settlement broker can calculate a present value, and, voilá!, you have your medical expense evaluation.

 

 

No Claim Too Difficult
Every claim can be evaluated and settled. It’s only a question of how to calculate the settlement components. Whether the disagreement is about DOI, AWW, underpayments, overpayments, scope of the industrial injury, or the cost of future medical care, we can figure it out together in mediation.

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.

Plan How To Start Your Mediation

The way mediations start is important. A bad start can result in a lot of wasted time getting to the place you should have been at the beginning.

The First Move
The best way to start is to start. Don’t be afraid to make the first offer to settle. Setting a settlement floor or ceiling tells your negotiating opponent where you are. Silence can falsely communicate that you are in the same ballpark.

Even if your offers did not get a response before, making a new offer now re-defines the settlement ballpark. An offer made “in light of new information” (even if that is simply a reconsideration) is not bidding against yourself.

Start Very Big or Very Small
Think about how your negotiating opponent will react to your opening. Your initial offer should not be so ridiculous that your opponent will walk out. On the other hand, research tells us that an extreme number can lead to a final result closer to the speaker’s expectation than does a more moderate opener.

Pick the Tiny Issue
Seldom does a Workers Comp settlement turn on only one issue.  Plan to start with the issue where the parties have the smallest evaluation difference and continue on as the challenge size increases. You may have to skip and come back to the thorniest issues regardless of size. Isolating issues and knocking them down one by one is an effective way to reach agreement.