So much a truism in 2011 that it has become a cliché, it’s plain we live in a 24/7, never unplugged world. Our phones are smart, our computers are now our TVs and our TVs are now TIVO’d. Facebook and Twitter give us instant feedback and commentary on both the momentous and the mundane. Lines between work and non-work life have been blurred and smudged to the point where these co-existing spheres are integrated rather than balanced. Everyone wants everything and wants it done faster, better and haven’t you gotten this done yet?!?
Resolving claims isn’t immune from these pressures. “Proactive resolution” has become more than merely a corporate buzzword as claims loads and demands for greater efficiency in claims handling increase while employee numbers remain constant or decrease. To handle rising claims volumes, claims representatives must understand how to achieve a realistic value allowing claims to be settled and resolved, often in a timeframe that doesn’t allow for extensive discovery to occur in the litigation process.
Simultaneously, injured claimants are barraged with advertisements, advising them to never talk directly to an insurance company representative and to always head straight to a plaintiff attorney once any substantial injury occurs to them or a loved one.
In the face of these competing dichotomies, how can mediation help? Mediation, when done effectively, can facilitate proactive resolution.
First, it provides the insurance professional a way to do what is necessary to realistically evaluate a claim. One way that insurance representatives may begin to assess claims is to determine if there are similar types of claims in the venue involving similar types of injuries. Adjusters also assess claims values based on the collective experience of their organization. While helpful, these tools merely allow a “generic” assessment of what a potential value might be. To move from generic value to a value relative to a specific injured party, additional information has to be developed. In mediation, plaintiff’s counsel and a claimant will be more likely, particularly given the confidentiality that governs the process, to offer this information. The mediation joint caucus may be the first and only time that the injured party can speak directly to the claims professional present to resolve the matter.
In the plaintiff’s caucus room, mediation can resolve the “unlevel playing field” concerns claimants and their counsel may have. In that scenario, insurance companies are viewed as having all the money and all the time and leveraging one against the other to drive down the value of the claim and gain an advantage over a claimant, whose immediate need for settlement monies may be acute. By the same token, both insurers and claimants use the ploy of “I’ll never make a demand this low/an offer this high again in this case.” With the aid of the neutral facilitator, claimants can test whether the offers/demands being made are case specific or more generic, and determine what obstacles have to be overcome to get to a realistic liability payout.
Another benefit to all the parties in the caucus and their counsel is the ability of the neutral to ask questions being raised by the other side of the table to test the liability and damages positions of each side. “The folks in the other room are curious about why Ms. Smith believes she would get two years of front pay when she hasn’t sought work in her old field and has returned to graduate school to finish her degree.” “Ms. Jones has information that a female co-worker also complained about how Mr. Smith talked to women in this workplace. “ It can be instructive and useful for the non-advocates in the case to hear this type of conversation between counsel and the neutral because it allows the advocate to discuss issues that affect the ultimate case value without having to appear to retreat from an advocate’s stance.
Where a mediation conference undertaken in aid of “proactive resolution” doesn’t always yield a settlement result immediately, it often ends with a mediated agreement between the claimant and the insurance representative outlining what additional information is needed, and when and how that information can be obtained. Once that information is secured, it is typical for case values to fall in line and for the parties to find a mutually acceptable value that will settle the case.
