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Is Trial Always Your Best Option?
When to Consider Mediation
By Steven Siemers, Ret. WCJ
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Steven Siemers is a mediator,
arbitrator and special master in workers’ compensation cases
throughout California.
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You’ve got a post January 1,
2003 date of injury, a rating that’s somewhere between a high
life pension and 100% and a Medicare Set-Aside estimate in the six
figures. What’s your next step? Typically, a demand letter
is sent followed by the filing of a Declaration of Readiness. Then
the attorneys show up to the Mandatory Settlement Conference, exchange
proposals that roughly approximate each attorney’s best-case
scenario followed by a reflexive, umbrage tinged rejection. The attorneys
fill out the five-pager and set the case for trial. You wait for
the trial date, try the case and cross your fingers. The injured
worker is asking what’s going to happen, and nobody really
knows, not even the judge.
What if you could spend a day or some
portion of a day negotiating a structured settlement, with the assistance
of your own structure expert, and generate a payout that is in excess
of what the applicant would receive with a 100% finding, but that
costs the defense less up front than the lower life pension finding?
Why wouldn’t you at least want to give the client the opportunity
to consider such an option?
Today, in a case of this nature, how do you go about determining
the actual range of the evidence? How do you know if a settlement
proposal is even within the range of acceptability? Have the Ogilvie
numbers been run? Has the present value of the Labor Code §4659(c)
cost of living adjustment figures been calculated? Has a Medicare
Set-Aside been procured? Has a settlement discussion taken place
that considers all of these factors and the plethora of possible
outcomes that allow both parties to make an educated decision about
settlement by comparing the likely risks of litigation?
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What if you could spend a day
or some portion of a day negotiating a structured settlement, with
the assistance of your own structure expert, and generate a payout
that is in excess of what the applicant would receive with a 100%
finding, but that costs the defense less up front?
See companion
article by Steve Chapman: Structured
Settlements and Mediation |
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As these questions suggest, it’s
a lot tougher nowadays to engage in meaningful and productive settlement
negotiations. Like seemingly everything else in California workers’ compensation
these days, anything that any party wants to accomplish takes more
work and more time. These questions also explain why many more stakeholders
in workers’ compensation are concluding that mediation is the
approach that will most likely lead to productive negotiations, and
thus to a resolution that will be more beneficial to both parties
than a Findings & Award.
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Many
more stakeholders in workers’ compensation are concluding
that mediation is the approach that will most likely lead to productive
negotiations and be more beneficial to both parties than a Findings & Award.
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Before proceeding to trial, every
party deserves to be provided with a settlement option. Counsel,
whether representing an injured worker, an insurance company, a self-insured
employer or a lien claimant, should strive to solicit a settlement
proposal in order to provide the client with an alternative to trial.
Depending of course on the desirability of the option, every client
should have the opportunity to carefully compare the risks of trial
to a settlement proposal on the table. A settlement option provides
the opportunity to make a choice. While the client may choose to
go to trial, the opportunity to consider settlement options may be
the most important benefit that an attorney can provide.
In most workers’ compensation cases in California, case value
is not great and generating settlement proposals is relatively straightforward.
However, in cases of significant injury and disability, especially
in light of the development of the law since 2004, while potential
exposure may be great, predicting litigation outcomes is a challenge
to say the least.
As a result, in high exposure, complex cases where
the risks are high, the formulation of serious settlement proposals
in these cases is very difficult, but extremely important. As a result
settlement negotiations that have any chance of success will require
more attention than will generally result from a telephone conversation
or some back and forth banter at the Board.
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While the client may choose to
go to trial, the opportunity to consider settlement options may be
the most important benefit that an attorney can provide.
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Attorneys
in every other legal specialty use mediation regularly to carefully
explore settlement prior to trial, and with overwhelming success.
The reasons are as follows:
- All counsel and their clients are in one place at one time,
properly prepared to negotiate in good faith.
- The confidentiality of the proceeding allows the parties to
negotiate more openly than may otherwise be appropriate.
- The parties prefer to formulate their own compromise resolution
rather than turning the dispute over to a judge or jury to resolve
without their input or control.
- A mediator is present to facilitate the negotiation process
by:
- Helping to formulate an appropriate opening settlement proposal
and working with the parties to formulate responding to proposals
in ways that will lead toward settlement,
- Assessing the strength of each party’s case in a private
caucus,
- Making sure that negotiations do not abort prematurely,
- Providing assistance with addressing client control or attorney
control problems,
- Mediation concludes in settlement the vast majority of the
time.
Now in California workers’ compensation cases, attorneys are
beginning to utilize the mediation process to accomplish the same
results.
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Attorneys in every other legal
specialty use mediation regularly to carefully explore settlement
prior to trial, and with overwhelming success.
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Workers’ compensation attorneys agree to mediation for the
following reasons:
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You can’t get a demand or
offer from your opponent, |
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One party or both has client control
or attorney control problems, |
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The potential magnitude of the recovery
overwhelms and ultimately paralyzes one or both parties or
attorneys, |
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The value of the case is difficult
to figure out because of MSA issues, COLA calculation issues,
apportionment, Benson issues, Ogilvie issues, etc., |
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The case is so complex that you
can’t settle it over the telephone or yelling at the
opposition at the Board, |
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For whatever reason, a negotiated
settlement is believed to be in your client’s best interest
and it takes a proceeding specifically designed to settle the
case. |
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Workers’ compensation attorneys
agree to mediation for many reasons
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Mediation in workers’ compensation works as well as it does
in other areas of the law, but appropriate
preparation is essential to increasing the likelihood of success.
The following steps are very important in making sure that the
mediation day is what the parties expect it to be:
- Decision Makers: Arrange for ALL decision makers to be present
at the mediation. It is especially important for the defense,
unless there is virtual symbiosis between defense counsel and
the individual for the defendant with adequate settlement authority.
During the course of virtually every mediation the participants
develop a deeper appreciation for the complexity and risks in
the case as the mediation progresses. Those not participating
will almost never develop that appreciation. Thus, where defense
counsel is on the phone begging for authority, things often go
badly.
- Homework: Do your homework in advance of the mediation,
including:
a)
Where necessary prepare a Medicare Set-Aside
b) Where appropriate
do your COLA calculations
c) Where appropriate run Ogilvie numbers
d) Carefully and credibly
analyze the potential maximum and minimum exposures in the case.
- Make
a Demand Ahead of Time: Applicant’s counsel should either
make a demand or at minimum advise defense counsel as to how
the applicant see’s the
defense’s maximum exposure several weeks before the
mediation. This way when the defense prepares for the mediation
they will know in advance how the applicant sees the case
and can have an educated discussion regarding what authority
will be necessary in order to settle the case. Without this,
the defense is left to calculate their maximum exposure themselves,
and the defense calculations are almost always far less than
the applicant will compute. Clarifying this ahead of time
saves time during the mediation.
- Educate the Mediator in Advance:
Counsel should inform the mediator as to what is believed to
be the sticking points standing in the way of settlement. This
can be accomplished by writing a confidential mediation brief
or by making a telephone call.
- Prepare Your Client: It is very
helpful if the clients understand the purpose of mediation and
that compromise will be required during the course of the negotiation
if settlement is to be achieved. When the clients are fully educated
about the strengths and, especially, the weaknesses of their
respective cases, progress is more easily achieved during mediation.
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Appropriate preparation is essential
to increasing the likelihood of success
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Trial may turn out to be your best
option, or your only option, in a given case. However, in high exposure,
complex cases where the outcome is uncertain (currently most all
high exposure cases in California workers’ compensation), parties
have a clear interest, and I would contend an obligation, to exercise
due diligence in soliciting a settlement option, and mediation is
often the most productive way to do so.
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Steven Siemers is a mediator, arbitrator and special master in
workers’ compensation cases throughout California. Mr. Siemers
practiced workers' compensation law as an applicant’s attorney
for 14 years in both northern and southern California, as a specialist
in the field, certified by the State Bar of California Board of Legal
Specialization. He then sat as a Workers’ Compensation Judge
in San Francisco and Oakland for 5 years. During the period he served
two terms as the President of the Conference of Workers' Compensation
Judges. Thereafter, he served as the Chief Judge of the Division
of Workers’ Compensation for 2 ½ years. He then served
as the Alternative Dispute Resolution Director and Ombudsman for
the Basic Crafts Workers’ Compensation Program, the state’s
first multi-craft workers’ compensation carve-out under Labor
Code sections 3201.5 and 3201.7 for nearly 5 years. He currently
sits on the Executive Committee of the Workers’ Compensation
Section of the State Bar, and is a member of DWC Ethics Advisory
Committee. Mr. Siemers is a graduate of California State University,
Chico where he has earned Bachelors and Masters Degrees in Political
Science. He is also a graduate of the New College of California School
of Law, class of 1980. He has taught at the St. Mary’s College
Paralegal Program in the field of workers’ compensation, and
has written and lectured on the subject. Mr. Siemers has been trained
in alternative dispute resolution at the Harvard Law School Program
on Negotiation, at the Pepperdine School of Law Straus Institute
for Dispute Resolution, and at the Federal Mediation and Conciliation
Service.
Hon. Steven Siemers, Ret. WCJ
1939 Harrison Street, Suite 320
Oakland, CA 94612
Office: (510) 272-0300
Cell: (510) 316-7256
Fax:
(510) 836-3136
Admitted to State Bar: 1980;
State Bar No.: 96232 – Active
stevensiemers@comcast.net
www.compensationmediations.com
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