Mediation can and does resolve personal injury claims. However, these disputes differ from other disputes in several respects: (1) the claimant typically is inexperienced in resolving personal injury disputes; (2) the negotiations usually only involve “distributive issues”— i.e., the distribution of funds from one party to the other; and (3) the issue being mediated is largely subjective.
The claimant’s inexperience derives from the fact that, unless an accident-prone person, this is likely to be the only lawsuit he has ever been called upon to evaluate. Compare this to the insurance representative for whom this dispute is one of hundreds or thousands he has handled. The mediator has the challenge of bringing some balance to this playing field of uneven negotiation and evaluation experience.
The distributive nature of personal injury disputes distinguishes it from commercial and family disputes involving multiple issues. For example, in construction cases, the parties typically assert numerous claims and counterclaims, and in divorce cases, financial issues, property division, custody, visitation rights and a myriad of details have to be decided. In these types of multi-issue cases, there is an opportunity for give-and-take and tradeoffs in the negotiations. How does the mediator facilitate give-and-take when the claim involves only how much the defendant will pay and how much the claimant will accept?
Making the process more challenging is the subjective nature of the personal injury dispute. While the claimant’s medical costs and lost wages can be calculated with some degree of mathematical certainty, the largest component of many personal injury claims is pain and suffering, which is usually left to the enlightened conscience of the jury and is therefore very difficult to evaluate objectively in mediation. What is the value of a lifetime of low back pain? What is fair compensation to a claimant who walked around for two years with a surgical device left in an internal organ after surgery? The mediator is challenged with assisting the parties in finding objective criteria that will help determine the answer to such questions.
How does the mediator do this? What follows are some guidelines I have developed for mediating personal injury cases based on my experience as a mediator. Underlying these guidelines is the premise that a successful personal injury mediator must be a student of human nature. And that is a course of study that no one ever completes.
1. Establish communication and rapport with the claimant as soon as possible.
No matter how reassuring the mediator’s opening remarks are, the average personal injury claimant is going to feel uncomfortable at first. The claimant cannot help noticing that everyone else in the opening session of the mediation has been through this process before. Many claimants sit silently through the entire opening mediation session. Often it is not until the first caucus with the claimant and his or her attorney that the mediator will hear the claimant say anything at all.
The first opportunity the mediator has to establish communication with the claimant is in the private caucus. I typically meet with the claimant’s side first and make a point of inquiring about his injuries and how he is feeling. Even more than indicating the mediator’s concern and willingness to listen, these questions give the claimant a chance to begin to participate in and become more comfortable with the mediation process. Only then can the mediator begin to evaluate the claimant as a witness. How articulate is he? Does he appear to be truthful? Is he exaggerating or minimizing his injuries? Is there a psychological component to the claimant’s complaints of pain? How would he do in front of a jury?
The initial caucus with the claimant is crucial in remedying to a degree the imbalance between the mediation experience of the claimant and the defense. There the mediator has the opportunity to commence the process of building the claimant’s trust and confidence in mediation and making him a participant in the process. Later in the mediation there will be ample opportunity for the mediator to relate to the claimant the contentions of the defense and to ask open-ended questions that will make the claimant reflect on the strengths and weaknesses of his case.
2. Identify the parties’ interests.
Although distributive issues make up a large part of the personal injury mediation, there may be other interests at play and it is up to the mediator to identify them. These interests may be personal (internal) or social (external).
Examples of personal interests, which may be unconscious, include the desire to obtain an admission of fault or an apology from the other party; the need to express feelings of being partially at fault in bringing about the injury; the desire to find someone to blame for unrelated unpleasant events in the claimant’s life; or the desire to obtain financial gain as a result of the fault of the other party.
Examples of social interests, which are often shared by others, include the desire to improve job-site safety procedures or product safety through an improved design or adequate warnings; the desire to have an employee dismissed in the interest of preventing injury to others; or the desire to have a young driver attend driver training school. By encouraging the parties to focus on their interests and discuss the options for satisfying them, the mediator can steer the parties away from positional bargaining, which is so typical of personal injury litigation.
Negotiations can test how important the parties’ expressed interests really are. Take the claimant who expresses concern about the need for future surgery and says the settlement must provide funds to cover these expenses, yet rejects an offer by the insurance company to earmark, for a limited period of time (e.g., two years), settlement funds equal to the estimated cost of future medical treatment. Under this arrangement, if the claimant does not have the surgery during the agreed time period, the funds would revert to the insurance company. In my experience very few claimants accept this type of proposal, even though it would satisfy an expressed concern about the need for future medical treatment. The mediator’s role is to help identify where there is room for negotiation. In this example, the insurance company could counter with an offer to make the contingent fund for future treatment available to the claimant without a time limit, or it could offer to pay a lesser amount as part of a lump sum settlement.
In seeking to uncover the interests of the parties, the mediator may find motives at work that mediation may be unable to address. Take the case of the claimant who felt sick for a few days after he swallowed a foreign object in restaurant food. The claimant was seeking a large sum, out of proportion to the facts of the case. The mediator was able to show the claimant that his real complaint— which was that the manager of the restaurant, at which he dined every night and considered his home away from home, did not show more concern for him and did not seem to care that he had decided never to eat there again --could not be satisfied by the negotiations with the insurance company. Thereafter, the claimant agreed to a settlement.
3. Identify the decision-maker.
It is important to identify the decision-maker since it is the decision-maker to whom issues and arguments should principally be addressed. Although mediation is a process that gives the decision-making power to the parties, as between a party and his attorney, it is not always the party who is the decision-maker. Furthermore, because of the complex nature of family relationships, it may be other members of the family who are the actual decision-makers.
The mediator can often tell who is the real decision-maker by observing behavior during the private caucuses. It may also be helpful to observe who is doing the “venting” during the course of the mediation. It may be the decision-maker who reacts most emotionally. Of course, attorneys—in seeking to appear to be zealous representatives of their client’s interests—often engage in theatrics, such as fuming and threatening to go to trial, while pronouncing that the other side is not negotiating in good faith. But sometimes these emotional responses are more than theatrics. For example, the attorney who almost walks out of the mediation after the opening session may be the real decision-maker.
Once the decision-maker is identified, the mediator should frame the issues and questions in a manner that will be convincing to that person. If the decision-maker is not a lawyer, the mediator should avoid legal jargon and legal arguments. In instances when there is more than one decision-maker on a side, or a disagreement between the attorney and the client as to the proper settlement value of the case, they may look to the mediator for strong advice and direction.
When there is more than one family member present, the mediator should talk to each of them and try to find out why each is present. Do they have anything to gain by the outcome of the mediation? How have the claimant’s injuries affected them? Do they feel responsible in some way for the injury? Are family dynamics having an impact on the injured claimant’s ability to make a decision?
Family members who push for an unreasonably high settlement may have their own agenda or interests that differ from that of the claimant. They may be seeking to assuage their own guilt over something that they did or failed to do. Subconsciously, they may feel that the higher the final settlement, the more responsibility the defendant has accepted for the claimant’s ills and the less they are responsible.
4. When the only interests are financial, increase the “pie” of issues.
It is easier to negotiate when there are several issues in dispute than when there is only one because of the opportunity to bargain and trade. What does the mediator do to facilitate settlement when it becomes apparent that there is only one issue to be negotiated and that issue is financial? How does the mediator prevent the parties from engaging in positional bargaining, which merely perpetuates the claimant’s desire to get as large a settlement as possible and the defendant’s desire to pay as little as possible? The answer is to expand the number of issues the parties have to negotiate.
In the typical personal injury claim the claimant may be entitled to recover past and future medical expenditures, past and future lost wages (known as special damages), and damages for pain and suffering. Often there is also a spousal claim for loss of consortium. To move the parties away from positional bargaining the mediator may find it useful to negotiate each of these damage components separately.
Take the claimant with a claim for $134,000, comprised of $14,000 in medical expenses, $2,000 in future medical expenses for physical therapy, $18,000 in lost wages, and $100,000 in pain and suffering. Suppose the defendant’s opening offer is $30,000. If presented as a lump sum, the claimant’s attorney is likely to reject it as insufficient to cover even special damages. The reaction to the offer might be different if it were presented as $3,000 for the unpaid portion of the medical expenses (assuming the rest has been covered by some form of insurance), $1,000 for future physical therapy, $14,000 for lost wages (based on the argument that the settlement is not taxable), and $14,000 for pain and suffering. After a few rounds of caucuses, the parties should be able to reach agreement on the past and future medical expenses and lost wages, and to narrow considerably the pain and suffering component.
Once the parties have reached agreement on individual components of the claim, they have the sense that progress is being made, that the mediation is working, and that there is a willingness by the other side to listen and be reasonable. As the parties agree on more and more components, there are fewer issues to disagree about. For example, once there is agreement on the loss of consortium issue, no more need be said about how the claimant’s spouse was affected by the injury.
Even the element of pain and suffering can be divided into components. The mediator might suggest different levels of compensation for the pain suffered in the accident itself, the time spent in the hospital, the time in physical therapy before the claimant returned to work, and the expected duration of future pain or disability.
In many mediations, the technique of increasing the pie of issues facilitates progress and cooperation in negotiations and enables the mediator to steer the parties away from their natural tendency to engage in positional bargaining. |
