Tag Archive for: Workers Compensation Settlement

Don’t Get Hangry

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Hungry negotiators are bad negotiators. The term “hangry” arose because hunger actually makes people angry, hence “hangry.”

If the mediator provides you with a sandwich menu to order food, it’s not just a courtesy. Nourishment keeps people focused on the mediation instead of their tummies. Take advantage of that menu to keep up your blood sugar. If you are released for lunch while the mediator is caucusing in the other room, go get some lunch. Don’t be shy about brown-bagging or bringing snacks for everyone on your team to save time and money.

For some reason, negotiators seem loath to take meal breaks. On one occasion, the injured worker let everyone know he was hangry. He became visibly agitated and wanted to terminate the mediation early, even though negotiations were progressing. Now I bring nutrition bars to mediations to mitigate the problem. But why have a problem at all? Go ahead and eat.

3 Reasons Why I Talk to the Injured Worker

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TRUST, CATHARSIS, COMPREHENSIVE RESOLUTION

 

Near the start of every mediation, once each side is in their own caucus room, I spend time talking directly with the injured worker. There are at least three reasons to do so.

1. I want to build trust in the mediation process.

The injured worker needs to feel part of and emotionally invested in the mediation process.  The injured worker is probably unfamiliar with the mediation process and may be apprehensive. The parties may distrust each other. Empathy is one of the traits of a good mediator.  I assure the injured worker that nothing will happen that the injured worker does not agree to. When the injured worker trusts the mediator and the mediation process to be fair, the likelihood of settlement increases.

2. Catharsis is part of the settlement process.
The mediation may be the closest the Injured Worker will get to a day in court.  Telling the story is a prerequisite to accepting settlement.  I want to make sure the Injured Worker gets the chance to tell the story in a neutral setting. Letting out emotions is good, and crying not uncommon.  Occasionally an attorney will intercede and take the place of the client to tell the story from the client’s viewpoint.  This is a mistake.
3. Sometimes the Injured Worker’s concerns are not being addressed.
At one mediation, when it looked like the attorneys had wrapped up all the issues, the Injured Worker asked me, “When will I be able to go back to work?”  A return to work was not part of the attorneys’ deal, and I had to rewind the process to make sure the Injured Worker’s concerns were addressed.  When the Injured Worker feels able to speak directly to the mediator, this type of omission– which could lead to problems for all participants later– is less likely to occur.

I participated in many workers compensation mediations before I became a mediator.  I never saw a mediator take the time to talk to the injured worker. Instead, I saw mediators create a barrier between themselves and the injured workers that made settlement more difficult. I work hard to make sure no communication barriers exist.

Why An Injured Worker Is Like Aaron Burr

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Hamilton, the ground-breaking musical about colonial forefathers, is finally coming to Los Angeles in August. But maybe you’ve been experiencing a version of that story. Like Aaron Burr, injured workers want to be in the room where it happens [sorry if you encounter an ad at this link]. Instead, they are frequently shut out of discussions and proceedings about their claim.
 
Ignorance breeds resentment
Go to any WCAB location and you will see a waiting room full of injured workers. Many more injured workers with claims on the calendar are not in attendance. Settlement discussions may occur in courtrooms, cafeterias and even hallways. Injured workers are usually not included in these discussions.

No injured worker should waste time traveling to a Board when nothing will happen. On the other hand, injured workers want to sit in on their attorney’s negotiations. If the injured worker is already at the Board, shutting out that person can foster mistrust.

The Best Place for Settlement Discussions
Mediation provides a forum for the injured worker to listen and participate. Including the injured worker conveys respect and can avoid a problem later.

Likewise, the presence of a representative from the employer’s side shows a seriousness of purpose. That representative will get a better picture of the negotiation by being in the room where it happens.

Regardless of which side an attorney represents, counsel will want to prepare the client for mediation. That includes a preview of how mediation works. Counsel may want to coach clients to be temperate in their comments. In joint session or when the mediator is present, client or counsel can ask for time for a private discussion with each other at any point.
Multiple Rooms
Typically there are at least two rooms where it happens, because each side is in its own caucus. As mediator, I shuttle between the rooms to speak with lawyers and their clients. Sometimes I speak only with the attorneys (often in the hall), and attorneys can request to speak privately with the mediator or with the mediator and opposing counsel. When counsel returns to caucus, the client can provide immediate feedback—assuming the client is in the room where it happens.

Mediator Proposals

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I see cases– sometimes years later– where the parties were oh-so-close to settling when negotiations broke down. Nobody would compromise their bargaining position to give that last inch, and they didn’t have a mediator to help them bridge the gap.
A Secret Response To An Offer Nobody Made
A “mediator’s proposal” works like this. I come up with a figure, sometimes with conditions such as CMS approval, which I believe will settle the case. Neither party has made this settlement offer, but, based on the negotiations which have occurred so far, it is a figure I believe all parties can accept.The mediator’s proposal depends on confidentiality. Parties are in separate rooms at this point. These separate sessions are called “caucuses.” I have always communicated my mediator’s proposals aloud in the caucus room, but some mediators write the proposal on two pieces of paper (one for each side) and sometimes put them in envelopes to be opened once the mediator has left the caucus.

If both parties accept the proposal, we have a settlement. (Hurray!) If one party accepts, but the other does not, there is no settlement, and the refusing party never learns that the other side accepted. I only tell parties there is no settlement. If both sides refuse, I tell them there is no settlement, but, again, parties do not know if the other side accepted the mediator’s proposal.

There are many benefits of the mediator’s proposal. Principally, no one has forsaken their last offer to settle. If a mediator’s proposal does not succeed, the parties can continue negotiating from their last position.

Blame it on the mediator
The mediator’s proposal allows mediation participants to save face. “It wasn’t our idea; it was that darn mediator’s.” Sometimes attorneys hesitate to be completely forthright in their recommendations to their clients, particularly if they are the second or third attorney on the file.  The mediator’s proposal opens the door for a frank discussion while allowing the attorney to shift responsibility to the mediator for an idea the client may find distasteful.

Mediators don’t stick their necks out to come up with a proposal unless they are pretty sure it is going to be accepted.  These things don’t happen early in the mediation.  More likely, you will see a mediator’s proposal when it looks like parties are heading to an impasse. Because my mediator’s proposal is a reflection of the parties own negotiation to this point, it is generally accepted.

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.

How to Win With Throwaway Issues

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Some issues aren’t worth fighting over. Yet, parties and counsel frequently do take a stand when they might do better by taking a step back and just throwing that issue away.

It’s the Principle of the Thing

OK, you’re completely right on this issue—but what is the big picture? A fight over a $300 interpreter bill is counterproductive when you are trying to resolve a claim with a value of $600,000.

When mediation participants staunchly maintain, “It’s the principle,” they almost always mean, “It’s the money.” Particularly for the employer side, this is a business negotiation. Savvy negotiators know how to bargain away the little issues to get the optimum result.

Location, Location, Location

Perhaps the most common throwaway is where to convene the mediation. Southern California is a big place, and drives of several hours to get to a Board or mediation are not uncommon. Sometimes parties argue over where to hold the mediation. You can’t resolve the case if you can’t even agree where to get together to talk about it.

Usually, California workers compensation mediations are held in one of the attorney’s offices. Sometimes only the defense attorney’s office is large enough to accommodate the participants. But negotiations may be most fruitful at a location which does not intimidate the injured worker. Using the AA’s personal office and the reception area for caucuses (mediator sessions with only one side) may seem cramped, but if the injured worker is most comfortable there, that may be the best choice. If you are arguing over this issue, just give it up.

I Owe You One, Man

Negotiation is a give-and take process. Once someone has acquiesced on an issue, the other party usually feels somewhat beholden to give way on the next one. Minimally, your “generosity” with issues which are of little consequence to you can show how reasonable you are. These concessions help advance the mediation toward a successful conclusion.

Some negotiators invent issues to fight over just so they can have them in their back pocket to throw away. Throwing away your position on an issue can be the smartest way to negotiate to the best final resolution.

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.

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.

What You Forgot To Tell Your TPA

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Many self-insureds and carriers use Third Party Administrators as their front-line adjusters. A set of instructions or guidelines from the actual check-writer is supposed to regulate the TPA’s procedures. Anticipating every permutation of every possible situation is impossible, but every set of instructions should include guidance on when and how to use mediation.

Recently I had the opportunity to review a set of TPA instructions. The TPA was directed to “negotiate settlements of covered claims pursuant to the authority granted by” the contracting party. No further details were provided.  However, another section of the agreement spelled out in minute detail a procedure for mediation should a dispute arise between the TPA and its client. The client knew mediation was an important tool for resolving its own disputes, but provided no direction about how to use it to resolve covered claims.

The regional risk manager of one national account tried to get their local team of TPA workers compensation adjusters to try new dispute resolution techniques, but the adjusters refused. “If they want us to do that, they need to include it in their instructions.”

What Should TPA Instructions Say About Mediation?
“At appropriate milestones in the life of a claim, adjusters and attorneys should take active steps to initiate mediation and report on the results.

“These milestones include:

-Upcoming trial date
-IW has reached permanent & stationery status
-IW has reached age 61
-70% of indemnity reserve has been paid
-4 reserve changes within 2 years
-Case is more than 4 years old

“Additionally, claims handlers should attempt to close claims with mediation in:

-Death cases
-when the IW is acting in pro per

“Adjusters and attorneys are expected to participate in mediations with a good faith intention to negotiate and resolve pivotal issues.”