Keeping Your Workers' Comp Client Informed on Mediation
Reading the title of this article might lead one to conclude that whatever is discussed is of little importance since everyone likes to believe they know the mediation process inside and out and that they have wonderful relationships with their clients.
January 31, 2020 at 12:49 PM
8 minute read
Reading the title of this article might lead one to conclude that whatever is discussed is of little importance since everyone likes to believe they know the mediation process inside and out and that they have wonderful relationships with their clients. It is those very people who may benefit from reading it. Since mediation is so informal and can become mundane to the practitioner, there may be a perception that preparation and client communication are less important prior to a mediation than a hearing on the merits of the claim. I submit that the exact opposite is true. This is the one time where attorney and client will spend perhaps hours together, discussing everything from the nuances of the case to their children's baseball practices. One should not take for granted that the client has any idea what is going on or is any less intimidated by the process. Equally important is not passing up the opportunity to make the best possible impression in the most revealing forum.
The attorney who is better prepared and, in turn, has gone over the mediation process with the client in detail will get the most out of the mediation, even if the case does not settle. The bond that is created with a client by communicating empathy and concern through one's communication, preparation and presentation is invaluable to the final outcome of either mediation or litigation. Preparation is not limited to a command of the numbers and facts of a particular case. Perhaps more important is the insight the client receives from the attorney into the idiosyncracies of the judge, the opposing attorney and the employer or insurer.
For example explaining the difference between negotiating with an insurance company, as opposed to a self-insured entity, might help the injured worker understand why the self-insured's initial proposal is $1,300 plus no admission of liability. While the practitioner might take that initial salvo for granted and understand where it comes from and what the ultimate goal might be, the claimant is simply crushed and personally offended. It is difficult from that moment for the injured worker to be in any frame of mind to proceed in a constructive manner. Whereas, had the client been well versed in what might have been expected and understood that a self-insured employer has feelings and take things personally, too, the ridiculous initial proposal would have no negative impact on the final outcome. Perhaps if the client realizes that a district manager has a bottom line and a budget, and that a workers' compensation settlement means no new forklift or additional helper, it might ease the tension.
While it might seem obvious, agreeing with your client on a bottom-line settlement figure before the mediation begins is essential. Again, not ever having been involved in a process like this before, a client who hears a salient fact or explanation for the first time during a mediation from opposing counsel or the judge can quickly become very apprehensive and untrusting. The last thing you want is your own client perceiving you as the adversary, which can happen if the client feels sandbagged.
Even something as simple as offering your client the history of mediation in workers' compensation can prove invaluable. While the "mandatory mediation" has been around since Act 147 of 2006, no one knew it would be successful. Prior to 2006, the bureau's mediation program was voluntary and it was thought to be successful precisely for that reason. Now, mediations have become a bit of a cottage industry. Litigation has been reduced dramatically and parties are generally more satisfied with the outcomes. However, who can recall when most mandatory mediations in 2006 and 2007 were not even scheduled due to the judge declaring them "futile" based on the unwillingness of the employer to provide authority. When a client becomes aware of this history, it opens a window to that person into the often illogical and habitual ways of an insurance company. If the client knows that insurance companies once routinely rejected mediations out of hand for no reason, it makes the failure to settle for a reasonable number more palatable.
Providing your clients insight into the habits and mediation styles of each judge is also a good way to prepare them. Since each judge has his very unique style of mediation, it is important to know what to expect from your judge and then pass that along to the client. If you are new to the practice or have not mediated in front of a particular judge, then find out from someone who knows.
Some judges are very direct and apply as much pressure to one party or both to make settlement appear to be the only reasonable option. They will also discern which party has the weaker position and concentrate the pressure there, irrespective of the fundamentals of the case. This style works the best when one party or the other is being unreasonable. However, a client can become utterly devastated if they are the target of the judge's pressure.
In contrast to the forceful method, some judges literally take almost no role in the mediation and let the parties use the time to negotiate between themselves. While this may seem counterproductive, you would be surprised how simply having a forum and the time to discuss settlement will sometimes lead to the best result. This method does not work at all with unreasonable parties, unfortunately. Again, if your client knows to expect nothing from the mediating judge by way of convincing or twisting the screws on the other party, they will not be disappointed should the case not settle. If you have not informed them ahead of time, they will conclude that they completely wasted their time and you allowed it to happen.
Of course, most mediators take a thoughtful, logical approach to mediation, insisting on having the mediation disclosure memorandum ahead of time, in order to be familiar with the facts of the case, and are perhaps the most effective at making your client feel the importance of the process. These mediators will consider the prospect of success on the merits of any pending petitions, the nature and severity of the injury, the pre-injury occupation and the average weekly wage and compensation rate. This style of mediation affords the greatest opportunity for those attorneys most prepared in arriving at the best possible result. It also demands that your client is completely conversant with principles that are sometimes very complex to the lay person. This style rewards an accurate presentation of the actual value of a case in terms of the amount of time the injured workers can reasonably be expected to remain on workers' compensation and the dollar value associated with that period of time, as opposed to an arbitrary appeal to the "number of years" for which a case settles.
Since a termination of benefits is very difficult for an employer to achieve, a carrier should be forced to consider that it is likely to be liable to pay compensation benefits for 500 weeks once the injured worker either returns to work or is modified to temporary partial disability through an impairment rating evaluation (IRE). Therefore, it is important to familiarize yourself and your client with what was once commonly referred to as the "commutation formula." Granted, you may have to dust off your high school algebra book, but every demand can and should be reflected in terms of the algebraic commutation formula: (AWW – RWW)* 2/3 *500 = X. "AWW" represents the claimant's pre-injury average weekly wage. "RWW" equals the agreed-upon residual weekly wage that is needed to ascertain the settlement value. (Try putting in the vocational counselor's assessment for added effect). Finally, X is the actual settlement, which is the number you are "solving for" or which you are trying to justify. While you may think you have better ways to represent your client, educating them on the actual value of their cases will reap tremendous dividends.
An informed client is a happy client. Recall that while you may have done this thousands of times, your client has never done it. Err on the side of explaining every conceivable nuance of the mediation process. You and your client will both have a much more fulfilling and hopefully lucrative experience.
Christian Petrucci of the Law Offices of Christian Petrucci, concentrates his practice in the areas of workers' compensation and Social Security disability. He also counsels injured workers in matters involving employment discrimination and unemployment compensation benefits.
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