Advising clients about settlement before the mediation

Here are the primary facts I believe the client should be advised about when considering settlement of their case:

  • Any case can be lost because juries are unpredictable. There is no way of knowing what group of people you will get from the blind selection process. You can get a good group or a bad group. You cannot "select" a jury. There are only three excuses allowed.
  • While plaintiff’s generally win about 60% of the cases brought, they lose over 85% of all medical malpractice cases.Trial is always a gamble.
  • Even of the plaintiff wins the case there is the risk that the verdict will be less then the offer made. The jury may bring in an award which they are proud of and feel is very generous when in fact it is less then what would have been received if settlement had been made.
  • The jury cannot be told what the offers were.
  • The jury cannot be told that attorneys fees and costs must be deducted from the recovery
  • The jury cannot be told what the insurance limits are.
  • The client must balance the risk of loss or the risk of a verdict for less then the offer against the possibility of a larger verdict being awarded.
  • If the trial proceeds there will be more costs advanced and this will impact the net recovery
  • Large verdicts are almost always appealed. The appeal process can take years. If the court finds error, it will order a new trial to take place. That means asking for a new trial date, waiting for it to arrive and going through a whole new trial all over again. During this process we are not getting the use of the money or the benefit of investment.

  • Settlements mean immediate money without possibility of appeal.
  • I give the clients the following information as to how we go about evaluating a case for possible settlement:

    • There are only two primary questions in evaluating a case for settlement:
    1. WHAT ARE THE CHANCES OF WINNING THE CASE?
    2. HOW MUCH MONEY IS A JURY LIKELY TO AWARD WHERE THIS CASE IS GOING TO TRIAL?

    The other issues impacting settlement are:

    • What are the insurance limits and
    • What degree of contributory negligence exists, if any

    I like the client to realize that the evaluation doesn’t depend upon how badly the person is actually hurt or how clear the negligence.The question is what the jury will do in this particular case. People with serious damages can get less then other people with less serious damages. Clear fault cases can be lost. There are no guarantees. A trial is a battle of impression and not logic. The insurance company will evaluate the case by deciding the odds of winning against the range of likely verdict. They will then decide on a settlement range which is discounted from the verdict range. This depends in part upon how clear the fault is, how serious the injuries, the amount of economic loss, the skill of the lawyers, the past verdicts in this area for these injuries. It also depends to a great extent upon their evaluation as to what impression the plaintiff and defendant will make to the jury. If the plaintiff makes demands that are too far over their settlement range, negotiation is terminated. You cannot just ask for a huge amount of money and see what happens. You have to evaluate the case and determine the range of the low and high verdict which is then discounted for settlement purposes. The demand will always be more than the minimum we will take for settlement, but cannot be some arbitrary high number. We have a minumum and demand in mind when we begin the negotiation.

    Our clients sign an agreement that they understand we will not agree to confidentiality imposed on us by the defendant as condition of settlement. They are reminded of our policy and understand that if the client wants to keep the matter confidental, we have no objection, but will not agree to have that imposed on us by a defendant as a condition of settlement.

    I advise the client that inmy view the mediator is not our ally. The mediator’s role is to settle the case. He or she is not working for us and therefore I do not want the client talking about the case to the mediator without my approval.

    I always provide the client with information about annuities and make it clear that we will not be able to accept an annuity offer at the mediation since we need time to evaluate it. Therefore, we will only consider cash offers at the mediation, but with the right to consider an annuity, if it is a reasonable choice, before final acceptance.

    I explainthe need for court approval if a minor or incompetent is involved. I also explain the significance of liens by labor and industry or other liens as well as subrogation claims. If there are multiple parties such as parents and childrenwe cover the conflict of interest issue and evaluate the need for separate representation as well as the need forpotential reasonable hearings or hearings to divide the settlement by the court.

    I want them to know aboutthe need for client approvalbefore distribution can be made as well as the delay between the settlement and receipt of the money. I make clear that we are not qualified to give tax advice or investment advicebut will assist them in locating someonequalified to do so.

    I record in our office case management software the advice given to the client and provide a written letter as well to avoid misunderstandings. There are probably other steps that should be taken in preparation for settlement, but these are the main points we cover in our office.

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