Tag Archive for: litigation

The One Word to Keep Negotiation Going

How do you react when your negotiating opponent says something completely outlandish? Some negotiators walk out. Some blow up, screaming invective. Some stoop to insult. In short, they do everything but negotiate.

Keep negotiating
You can’t reach a negotiated settlement if you’re not negotiating. Sometimes you must react to the nonsense you have just been offered. But how to respond when you are actually biting your tongue?

Wow.

There it is. The single word that keeps you non-committal.

The Perfect Rejoinder
The injured person has spent 20 minutes weepily telling a tale of woe. You may believe the person has problems, but they are unrelated to the cause of action under discussion. Your respectful response: wow.Opposing counsel has just literally laid on the table proof that your side has concealed evidence for more than a year and lied about it in discovery responses. You know you need to round up your team and figure out what has been going on. Your dispassionate response: wow.

Defendant insists that their personnel were nowhere near the alleged incident at the critical time. You have just uncovered video footage that shows this is false, but you are not quite ready to disclose this. Your calm response: wow.

Wow Works Wonders
A startling, emotional, or angry statement could tempt you to respond in kind. But ratcheting up the emotion index can interfere with the parties’ ability to keep things in perspective. While others around you are heating up, staying cool as you observe the dynamic keeps you in control. Wow.

3 Logic Skills to Favorably Settle Your Case

Most of the cases I mediate are fact-dependent. The law is settled; it is up to the parties to correctly apply the law to these facts. Yet, lawyers sometimes show up with little understanding of what the relevant law is. When the applicability of statutes and regulations is cloudy, case law provides interpretation. Reconsider how these three logic skills apply to that case you know just needs to be settled before parties spend any more time or money.

Analogize /Extrapolate/Distinguish
Every individual is different; hence, every case is unique in some ways. Legal analysis involves  researching legal precedents to see the similarities to and differences from the facts of this dispute.

If case law favors your position, fashion your arguments to show why the precedent is an analogy for the facts of the present case. Instead of understanding this basic legal skill, I see advocates argue against their client’s interest that there are differences.

To create an analogy, one must extrapolate, i.e., show how the court deciding this case should apply the reasoning of the previously decided case to different facts to rule in favor of the client. This argument requires thoughtful preparation and creativity.

An attorney who argues that a precedent is so different that it has little bearing on the present dispute is distinguishing that precedent. This is an analysis of degrees of difference.

If you dig deep enough, you can probably find cases that could suggest opposite results for your case. Don’t ignore the unfavorable ones. The skillful practitioner will show why the favorable cases are analogous to the one being negotiated and the unfavorable ones should be distinguished.

Remember, you can direct your mediation statement solely to the mediator, and it will remain confidential. Whether in a court memo, a mediation statement, or a demand letter, a reasoned presentation is more persuasive than a bombastic declaration.

How the Inflation Reduction Act Does- and Doesn’t- Affect Your Injury Settlement

The Inflation Reduction Act of 2022 is packed with provisions about tax calculation and collection and climate change. It’s also got provisions worthy of the attention of anyone handling injury cases. Some of these provisions have been widely, but not fully, publicized.

Medical Insurance Premiums
Remember those three ways to evaluate future medical expenses? People who get their health insurance through health exchanges like Covered California were scheduled to see a major rise in premium expense at the end of this year. The Department of Health and Human Services projected that three million people would lose their health insurance coverage. The Inflation Reduction Act continues the subsidies that make premiums under the Affordable Care Act actually affordable through 2025.

2025?, you may say. That’s not very long when computing a person’s lifetime medical expense. True, but it is also true that once a public benefit is entrenched, Congress would find it very difficult to take it away. Skilled negotiators know how to fashion settlements which anticipate these events.

Downward Pressure on Medication Expense
Drug companies’ profits are soaring. One reason is that when Part D coverage became law, the compromise was a ban on Medicare being able to negotiate drug prices with drug companies. This contrasts with the way the Veterans Administration manages their drug costs. Medicare accounts for one-third of all prescription spending in the United States.

While there has been a lot of publicity about the new law granting Medicare negotiation power for the first time, the benefit is more meager than at first glance. First, it doesn’t start until 2026, and even then it’s not a blanket change. It applies to 10 drugs in 2026, 15 in 2027, 30 in 2028 and 40 in 2029 and after. The affected medications are to be chosen from the 100 most expensive pharmaceuticals (50 from Part D, 50 from Part B). What’s more, the drugs subject to price negotiation cannot include conventional drugs that have been approved for marketing for nine years, biotech products with marketing approval for13 years, or “orphan” drugs — those with exclusive FDA approval to treat certain rare conditions. This brings most drugs close to the end of the life of their patent, after which lower-cost generics will become available.

Those of us who have been evaluating future medical expenses for a while have learned not to rely on prescription costs decreasing because the injured person’s current medications are going off-patent. Drug companies are always innovating. Just when it seems like the availability of a generic will reduce ongoing prescription expense, the injured person gains access to a new, better drug with a high price tag.

Other Part D Limits
The Inflation Reduction Act limits out-of-pocket spending by Part D enrollees to $2,000 per year. Premium increases are limited to 6% a year from 2023 through 2030. These limits provide better insurance coverage, but due to the collateral source (civil) and primary payer (WC) rules, won’t change case evaluation without meaningful price reduction. On the other hand, the limitation on how much the injured person will actually have to pay can encourage greater negotiation flexibility.Stay Vigilant
Depending on how the political winds blow, these changes might be just the first step toward changing how Americans pay for healthcare. Or it may take decades before more important changes occur. News reports typically ignore the effect of such laws on dispute negotiations, so you will have to read between the lines and stay alert. Working with a skilled, experienced mediator can help you navigate these shoals.

Focus on the Future

A 2013 market study indicated that 21% of the U.S. population read science fiction. Science fiction films are even more popular.

If we’re so fascinated with speculation about the future, why do we look to the past instead of the future when we negotiate?

Instead of planning for a life without conflict, negotiating parties tend to dwell on issues of the past. For example, fixating on how much money has already been spent (called “sunk costs”) instead of on how much will be saved by settling now, can get in the way of an objective case evaluation.

Litigation creates anxiety. We know that parties are relieved once their disputes are resolved. Redirecting negotiators’ attention to a future without the ongoing investment of time, money and stress can spur settlement. That is true for how your team discusses their position and also how you present your position to your negotiating opponent.

A future without conflict is a better future. Mediation can help you get there. And that’s not science fiction.

New Law Opens Narrow Window For Increased Survivor Damages

We are all aware that COVID restrictions disrupted the ability of civil litigants to get a speedy trial. In some cases, the plaintiff died waiting for trial. Though the action survived, upon the death of the plaintiff, non-economic damages were no longer recoverable. The California legislature addressed this issue by amending California Code of Civil Procedure (CCP) 337.34 to add:

. . . in an action or proceeding by a decedent’s personal representative or successor in interest on the decedent’s cause of action, the damages recoverable may include damages for pain, suffering, or disfigurement if the action or proceeding was granted a preference pursuant to Section 36 before January 1, 2022, or was filed on or after January 1, 2022, and before January 1, 2026.

Preference Cases
CCP 36 allows three groups of litigants with a substantial interest in the case to move the court to try the case within 120 days:
— A party over 70 years whose health is such that a preference is necessary to prevent prejudicing the party’s interest in the litigation
— A party under 14 years of age
— A party in any other case who requests the court to exercise discretion to serve the interests of justiceParties or their representatives who had successfully moved for a preference before 2022 can seek damages for a decedent’s pain, suffering, or disfigurement. Conversely, parties in those pending cases who did not qualify or did not move for a preference will be denied the ability to recover non-economic damages.

For example, if a 69-year-old plaintiff who had filed a case in 2021 dies in 2022 before getting to trial, the representative cannot seek general damages on behalf of the decedent, even if they moved for preference in 2022.

Cases Filed 2022-2025
The new law is temporary. It defines a four-year window. Notably, the law also requires a plaintiff who recovers damages pursuant to the new law between January 1, 2022 and July 31, 2024 to submit a report to the Judicial Council detailing the particulars of the judgment or court-approved settlement. In turn, the Judicial Council will report the results to the legislature on or before January 2025. The legislature can then consider whether to make these provisions permanent.

Settlement Considerations
The value of cases which qualify for this expanded damages rule has increased. In some cases, the added value will dwarf the economic damages. Parties must consider the added exposure to defendants in evaluating cases for settlement. Additionally, in cases where settlement does not require court approval, there may be some value to creating settlements which will not be reported to the Judicial Council.

What is the Truth?

Many lawyers and claims professionals say that the litigation process is a search for truth. They will swear allegiance to a jury’s ability to ferret out the truth from conflicting evidence. And yet, more than 90% of all cases settle. The truth can be more slippery than you think.

Individual Lens
Each of us receives data through our own lens based on our experience and attitudes. Why We’re Wrong About Nearly Everything: A Theory of Human Understanding by Bobby Duffy provides multiple examples of people ignoring the facts in front of them. For example, a study reported in Behavioural Public Policy saw subjects looking at the exact same data about the effectiveness of gun control, but interpreting them to favor their own pre-conceived views.

Lawyers know it is impossible to ferret out every possible micro-experience in a potential juror’s background. They depend on the collective knowledge of the group to arrive at a favorable result.

Socrates Said There is No Absolute Truth
All of us filter the information we receive through our own mental and sometimes physical viewpoint. Several witnesses to an event may tell different stories about what occurred. What is more probably true than not? Are you sure?

This conundrum really breaks down when fact-finders are asked to decide between expert opinions. I often tell mediating parties about a case I was involved in which ended with a large verdict in favor of the plaintiff. The pivotal issue was causation. Did they really think the defendant’s act caused plaintiff’s damages? It didn’t matter. The jurors’ collective response was summarized by one representative statement: “She was just so sick.”

The Search for Truth is an Obstacle to Settlement
More often than not, parties never get to a judgment which establishes the “truth.” They do settle, but not before spending time and money beyond a point when they knew enough to settle.

Mediation helps parties see beyond a search for an absolute truth to evaluate all the relevant factors and settle sooner.

New Restrictions on Confidentiality in Settlement Agreements

Effective January 1, 2022, amended California Code of Civil Procedure §1001 expands restrictions on confidentiality clauses in settlement agreements.

Previous law barred such clauses in agreements settling filed civil or administrative actions alleging sexual assault or sexual harassment. Only the identity of the claimant and the amount of the settlement could be protected.

The new provisions expand the prohibition to include

1) acts of workplace harassment or discrimination not based on sex, and

2) acts of harassment or discrimination not based on sex by the owner of a housing accommodation.

3 REASONS HONEST WITNESSES TELL FALSE STORIES

Many cases turn on the recollection of “percipient” or “occurrence” witnesses. These are people who used their senses to see or hear relevant evidence. Less commonly, they might have smelled, touched,   or tasted something. Percipient witnesses contrast with expert witnesses, who are usually engaged in anticipation of or during litigation. Expert witnesses rely on evidence which has been submitted to them so they can render an opinion based on their education and experience. They need to record what they relied on, but don’t have a recollection of the events of the case as they occurred.
Honesty Isn’t the Issue
In his 2021 book Why The Innocent Plead Guilty And The Guilty Go Free/ And Other Paradoxes Of Our Broken Legal System, federal district judge Jed S. Rakoff explains why eyewitness testimony in criminal cases is unreliable. Those same reasons apply to percipient witnesses in civil cases.

1)The witness’s own level of stress at the time of the incident affects and can impair their recollection.

2)The inherent human tendency over time is to add embellishments to enhance the completeness of the recollection or simply to accord with preexisting biases.

3) There is a wide range among people’s ability to retrieve memories of events that lasted only a short time.

It’s An Old Story
In the celebrated 1950 film Rashomon, multiple percipient witnesses tell wildly different versions of the same event. Today, the well-known unreliability of eyewitnesses is sometimes called the Rashomon Effect.

What to Do?
A witness may really believe the story that witness is telling—and that story could hurt your case a lot. It’s hard to predict how the trier of fact will view conflicting evidence. Witness unreliability is one reason why going to trial is such a gamble. Recognizing this paradigm should prompt you to choose mediation  to settle sooner rather than later.

50 SHADES OF NEGOTIATION GREY

No, this post doesn’t qualify as erotica. It’s about the ability to see nuance. Most cases are not black-and-white, no-doubt-about-it, situations. Rather, there are shades of grey. If this were an open-and-shut case, chances are that claim would not be in dispute.
It’s Part of Empathy
Being able to see all the facets of an issue enhances your ability to negotiate a settlement. You can best meet your opponent’s arguments if you take the time to put yourself in that person’s shoes long enough to figure out what those arguments are. Then you can best meet them.

While it is appropriate to research all the facts and law that help predict an outcome,  when researchers choose to dismiss negative findings, they will not be able to constructively negotiate. Only interpreting findings as favorable, a mindset known as confirmation bias, prolongs conflict.

When initial research reveals negative information, the impulse may be to just keep digging. This attitude manifests itself in the actions of litigators who, for example, keep designating treaters and experts in the hope that somebody will back up their position. An analogy might be to a company which continually engages in research and development, but never actually brings a product to market. That’s not what success looks like.

Grey Is Stressful
Uncertainty generates stress. Parties in mediation sometimes tell me how relieved they are that the dispute is over, even when they got a result they see as unfavorable.

Settlement isn’t about who’s right and who’s wrong. It’s about showing everyone that concluding the dispute is in their own self-interest. Mediation is the place to do that.

SETTLEMENT AND THE BOTTOM LINE

The offer on the table was a good one, but the attorney thought there was hope for something better. Then I took the attorney through the “what if’s.”

Expenses Matter
How much will it cost to bring this case to trial? What about experts’ fees? I asked the attorney to create two financial statements, one that showed the net financial result now versus the likely result after more litigation. Viewed in the most favorable light, more litigation produced the same financial benefit in the end. And if the result was not so favorable, prolonging the stress and financial outlay would have a negative financial result.

Attorney’s Fees
It costs money to run a law office. In a contingent fee practice, there is a lot of outgo before the reward comes in. When an attorney’s resources are at capacity, the choice is to turn away business or expand staff and space, thereby increasing the cost of running the office.

I asked the lawyer what his hourly fee would be if he kept litigating. “I’m on contingency. It’s the same.” “No,” I explained, “when your fee is contingent, the longer you work, the lower your hourly rate.”

For what appeared to be an ego-driven motive, not only was this attorney determined to keep fighting the client’s case for no foreseeable financial benefit, he was undermining his own financial stake in the matter.

Part of my job as mediator is helping parties, adjusters, and their lawyers see the full range of issues and possible results.