Why Mediation? 5 Personal Injury Case Studies

by NAM (National Arbitration and Mediation)
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NAM (National Arbitration and Mediation)

The perspectives of plaintiffs and defendants in personal injury cases are inherently different – both sides have an interest in resolving their disputes quickly, while attempting to get the best possible results for their clients. Having worked many years on both sides of the equation, I have suffered through less-than-satisfying experiences, with trials delivering disappointing results. These sub-par outcomes are often the result of the many risks and uncertainties that a personal injury trial can entail (including a potential increase in expenses, time and effort – yielding little reward for either side of the case). In other words, settling these types of cases promptly through early mediation can prove to be more economical, and provide mutually beneficial solutions that appeal to all parties in a lawsuit. Following are five examples to help you identify cases which may lend themselves to mediation at an early stage, and to avoid having to gamble with unpredictable results at trial.

CASE #1

Plaintiff has severe injuries, and there is plenty of insurance coverage, but the current case law makes a liability finding against the defendant unlikely.

Real-life example: Davis v. South Nassau Communities Hospital, decided by the New York Court of Appeals in 2015.

The facts: Patient goes to an emergency room with abdominal pain. She is given narcotics and other drugs for the pain. She was released by the doctors employed at the hospital and allowed to drive home. Twenty minutes after her release, she crossed over her lane and strikes another car in a head-on collision, seriously injuring the other driver. At the time, the existing New York law stated that hospitals and doctors owed no duty to the general public when deciding to warn the patient not to drive a vehicle under these circumstances.

The lower courts dismissed the case, but New York’s highest court felt differently and that the facts dictated a change in New York’s law. I can just imagine the defense counsel and the claims people saying, “No pay from the get-go.” While it may be unusual to see changes in the existing law, the point is that these facts had the power to force a different result.

The key here is that the hospital did have some opportunity to control or attempt to prevent the injury through adequate warning of the patient. Now, after the Davis ruling, hospitals and doctors in New York have been declared to owe a duty to innocent parties. This law did not exist at the time this case was decided, so blind reliance on “these claims aren’t allowed in New York” was ill-founded. Judges may try to do the “right thing” when the facts compel it.

“Severe injury with shaky liability” claims have high volatility – and are potentially explosive, but not very likely to blow up in the face of the defense. Defense attorneys spend lots of time and money defending these claims, often without the proper perspective about the downside risk to their clients. Plaintiffs’ attorneys may spend lots of time and money prosecuting these claims, but – more often than not – a dismissal or a disappointing verdict is the only thing obtained for their clients.

To avoid this, both sides in any claim should consider “end-game” possibilities early on, and before determining to proceed on a “take-no-prisoners” pursuit of justice. Step back and look at the facts; where there is great sympathy for the injured party of a claim, it is wiser to settle the case reasonably rather than to rely on precedent and technical arguments to shield you from a bad result. The potential downside can be great, and an experienced mediator can help you recognize important factual distinctions.

Why Mediation?

It makes good sense to put these types of lawsuits into mediation soon after the plaintiff’s deposition – which is usually when the key facts of the claim are established. On the other hand, if the key facts are still in dispute after a plaintiff’s deposition, it may be desirable to wait until after the Note of Issue is filed before mediating – especially if there is too much uncertainty remaining after plaintiff’s deposition. Usually, after the Note of Issue is filed, everybody has a pretty good idea of what the lawsuit is about, and what might happen going forward.

In these “shaky liability” claims, plaintiffs’ attorneys are reasonable in their representation when obtaining settlement for a modest percentage of the value of the injuries, because both the client and the lawyer get “bird-in-hand” compensation relatively early, when there might well be none later on. On the other hand, a defendant might rather pay a reasonable percentage of the value of the provable (and possibly sympathetic) injuries in order to save future defense costs and mitigate the risk of the case becoming stronger. Remember, the more severe the injuries, the higher the likelihood of a case being appealed, no matter which side wins motions or verdicts at the trial court level.

The additional expense and delay of appeals are costly to everyone, so why not see if all uncertainties can be resolved early on with a reasonable settlement that everybody can live with? If both sides take the cost of litigation, delay and uncertainty into account, it should be possible, through mediation, to achieve a mutually beneficial settlement agreement, without having to wait for years.

CASE #2

Severe injuries to a faultless plaintiff, with one defendant — primarily at fault but with little ability to pay, and a commercial defendant with a questionable role in causing the accident, but with “deep pockets”.

Hypothetical example: The key to managing the risk in cases like these is to recognize that a jury will likely be made aware that the one primarily responsible cannot possibly pay the verdict.

The jury’s quandary: The innocent plaintiff is truly a victim, but the primary wrongdoer will be unable to adequately compensate her. It is easy for a claims adjuster representing the commercial defendant to look at this case mathematically (e.g. evaluate that the other defendant is 90-100% liable and so conclude that the commercial defendant is only 0-10% liable). However, the trial, which is years away, will likely go very differently.

The plaintiff’s attorney knows where the money is and will tailor the case to target the commercial defendant. The proof will focus on anything and everything about the commercial defendant who will be cast as uncaring, dangerous, neglectful and/or irresponsible. The trial strategy will be to emphasize the emotional aspects of the case. The only one talking about proximate cause will be counsel for the commercial defendant.

Why Mediation?

Is the jury really going to come back with 0-10% compensation from the commercial defendant for the plaintiff under these circumstances? Maybe, but a mediator can help focus on the risks and the most likely results in the claim, in order to reach a reasonable compromise. There is little benefit to wait for trial and hope for a nuisance settlement. Many experienced plaintiffs’ attorneys will try a case like this rather than recommend settlement.

CASE #3

Lesser injuries with good liability sought against a large number of defendants.

Hypothetical example: A sheet-metal worker, through the negligence of an unknown actor on a jobsite, is caused to fall off a ladder. He receives a large laceration in his leg, receiving many stitches, resulting in an unattractive scar. He returns to work after six weeks. His only continuing claims are that the scar is itchy and is unsightly when he wears shorts. He is a 26-year-old, otherwise healthy young man. In cases with this degree of injury, the plaintiff would be glad to get a reasonable settlement and is likely entitled to one. However, the defendant’s contractors and sub-contractors are all busy in discovery (each attempting to prove that its workers were not at fault) in a protracted litigation over who will pay what part of any settlement.

The total defense cost expended by each party ends up dwarfing the money that is eventually paid to the plaintiff to resolve the claim. The aggregate expenditure of defense costs for all the defendants combined has grown significantly. The plaintiff eventually settles for close to what the case is worth, but he and his client would have taken less at a much earlier date to avoid this litigation tangle.

In order to greatly reduce expense in this type of scenario, it is recommended that defendants and insurers recognize the true cost to defend at the onset of a case – this can greatly reduce expense by resolving all claims and cross-claims early on.

Why Mediation?

The key to savings is to ask: “How do I end up paying the least amount of money, both in defense costs and in settlement?” All too often, defendants say “it’s not my case to settle”, closing their minds to the money saved that early resolution would bring. Defense attorneys and defense claims people often assign these “not-so-serious injury/multiple defendant” cases to the bottom of the pile because they have other, more serious cases to work on. To avoid wasting resources, it is likely more beneficial for defendants to cooperate in mediation and end the legal spend.

CASE #4

The severe injury/clear liability case with emotional appeal to the Court and to the jury.

Real-life example: A 75-year-old widowed grandmother, living independently, was run over by a right-turning truck while she was walking on a crosswalk. She subsequently spent a year in hospitals and rehab. She was unable live at home because her current home could not accommodate her wheelchair. She had also been raising her 12-year-old grandson before the accident and was unable to see him on a daily basis. The lawsuit was just starting. How would she live? Would she be forced to go on Medicaid?

Too often, the defense doesn’t concern itself with settling serious injury cases until discovery is complete. These cases are typically defended just like any other case, except that the severity of the injuries, justifies an aggressive and expensive defense, with multiple experts being retained. One would assume that the defendant would want to save on legal costs by settling early.

The plaintiffs’ attorneys acknowledged that this was a “good” case and were not terribly worried about getting paid. They understood the importance of keeping their client happy in order to reduce the likelihood that she would replace them with other counsel to represent her. They also knew the time value of money, and the value of their own time. Many plaintiff’s attorneys are realistic and will try to resolve these cases early on, if given the opportunity.

Why Mediation?

Plaintiff’s attorneys get paid by the result, not by the hour. They often get frustrated by needless stone-walling and obstruction. When, defendants’ attorneys and claims people proactively recognize the needs of the severely injured client, negotiation at early mediation is often fruitful.

In this real-life example, the case was settled within a year of being filed. The plaintiff was able to buy a home to accommodate her wheelchair. Her new home also provided ample living space for her grandson and her extended family to live with her, thus increasing the amount of quality time she spent with them on a daily basis. Although extremely limited by her injuries, she began receiving home care, and enjoying an increased quality of living. Everyone who worked on this case was happy to see the right result obtained without further concern and without further uncertainty.

CASE #5

The severe injury case where one defendant is a possible cause of the accident, but won’t settle, and a second defendant is also a possible, but lesser, cause of the accident.

Hypothetical example: A pedestrian who is late for work, starts to cross a busy street, walks in front of a commercial vehicle which is illegally double-parked. The pedestrian continues forward without looking carefully and is struck by a passing municipal bus. The injuries are severe.

The claims adjuster for the commercial vehicle may say that this accident is the pedestrian’s fault or the bus operator’s fault or both, and not worry about the claim. Either the bus driver should have seen the pedestrian or the pedestrian should have seen the bus. But the problem for both plaintiff and the commercial vehicle defendant is that the municipality which owns the bus is not going to settle this case. When the jury is confronted with the severe injury and the inescapable fact that the commercial vehicle was illegally parked, the result is unpredictable.

Why Mediation?

If the commercial vehicle’s claim adjuster recognizes the risk, mediation can yield a predictable result for the commercial vehicle defendant. The plaintiff’s attorney has a similar predicament: The jury could find that his client is 100% at fault for not looking. He doesn’t want to put the case before a jury if he can avoid it. In this situation, the plaintiff discounts the value of the case and settles with the commercial vehicle defendant to guarantee that there will be some recovery of compensation, attorney’s fees and reimbursement of expenses. The plaintiff can choose to take a gamble at trial, seeking an award against the municipality. If the case against the municipality is lost, the plaintiff’s attorney has already managed the risk through the prior mediated settlement with the commercial vehicle, so there is some compensation received, regardless of the outcome of the trial against the municipality.

CONCLUSION

There is always risk in these types of claims, some of which might not be so obvious. The logical assumptions about outcome may be disproven by the real-world results. The key to successfully handle personal injury lawsuits is to understand that they are oftentimes unpredictable. Things may happen at trial that aren’t what you would typically expect, or what you think should happen according to your own sense of justice. How many times have defendants relied on a plaintiff’s criminal or medical history, only to learn that the Court is completely disallowing or restricting the evidence which will be presented to the jury? Unpleasant surprises can be avoided by putting these types of claims into mediation sooner rather than later.

When confronted with unfamiliar fact scenarios, consider early resolution through mediation as a viable option. At the very least, mediation may reveal that the other side has a completely different opinion of the value of the claim. Even better, the mediation process can help determine whether you have accurately perceived the extent of the risk of an adverse result, particularly in a high damages exposure case. It is often advantageous to find out early, while there is time to mitigate the risk. The best results often come from avoiding unnecessary risk, and by considering the best way to resolve claims as soon as possible. When navigating in the “win / lose” world of personal injury litigation, mediation is the tool of choice to help you to obtain optimal results and to keep negative outcomes on the horizon.

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