7/19/2017
The Roundabout

The Roundabout

Transportation professionals sound off on mediation strategies.

By Jim Foster

CLM’s Transportation Committee gathered together a cross-section of the sharpest minds in the transportation community to discuss matters that affect it. In its inaugural edition, The Roundabout’s moderator Jim Foster asks an environmental services risk manager, an insurance carrier chief claims officer, and an insurance defense attorney about the role of mediations in claims.

Jim Foster: Do you have an estimate of what percentage of mediations in transportation cases settle? Does it often take more than one mediation session? In your view, are mediations an effective tool to reduce risk, obtain certainty with a closed file, and avoid surprises at trial?

Caryn Siebert:Although it may sound odd, I’d say 98 percent of the transportation claims that we bring to mediation end up settling through that process. First, the fact that both sides agreed to mediate is indicative of their desires to resolve the matter. Second, if either attorney is having “client control” challenges, it’s often a helpful tool to utilize so that the client can obtain an assessment of the merits of both sides from an unbiased third party. This is a much better approach than entrusting a jury of inexperienced people who sometimes let emotions impact a decision.

Sean McDaniel: Mediations are a very effective tool to reduce risk in effectively resolving a claim. I would much rather decide the fate of my company than put it in the hands of 12 strangers. I would say 90 percent of my mediations involving transportation issues end up settling. It may take more than one mediation, but each session is time well spent since I usually learn something that better prepares me for the next development in the case.

Joe Pappalardo:Let’s face it, on average less than five percent of claims and lawsuits go to trial. Mediations are the gold standard and have been for some time. About 90 percent of my cases settle at the first mediation session. I seldom have a second. It usually happens when the other side is overwhelmed and needs some space or when there is a factual or legal issue that is hanging up one side or the other.

Foster:Do you think that the defense should apologize to the plaintiff and admit that the accident was their fault or say that they are sorry for the plaintiff’s injuries in a contested liability case? If so, should it be the defense counsel or the industry professional who apologizes?

McDaniel:A defendant should always apologize for the accident having occurred, regardless of fault. I would not admit fault, but rather simply apologize as a way of being empathetic. I find the apology is best received by a representative of the defendant company.

Siebert: We have an expression at my company that goes, “At Knight, we care.” Our claims professionals are encouraged to say that they are sorry to hear of the claimants’ injuries, damages, or losses, and that we wish to gather as much information as we can to make a fast, fair, and effective decision on the resolution value of their claim. That does not necessarily mean admitting fault, but rather establishing rapport and being empathetic to their situations.

Pappalardo: If liability is contested, then the apology needs to be phrased in terms of “We have our disagreements, but we promise to be compassionate and professional in this process. No one wants to see anyone get hurt or killed. The women and men of XYZ Company are all human beings who respect and value the other people on the road. We are so sorry this tragic event happened.”

Foster:Have any of you ever considered using the “empathic approach” immediately after a catastrophic accident? In other words, to meet with plaintiffs and their families in order to establish a rapport and attempt to settle cases pre-suit? Would a pre-suit mediation be effective in this circumstance?

McDaniel: We usually make an effort to meet with claimants and their families to show empathy and set the stage for mitigation of the claim. I find that having someone, the right person, from the local site making the contact works best. They often are both members of the same community, and it is better received as a simple gesture of empathy. This person should set the stage for further contact by insurance representatives, if they will allow it, and, hopefully, this will lead to a pre-suit mediation at the appropriate time.

Pappalardo: I have been involved in many empathic visits. Generally, I stay in the background and leave the interactions to a trained professional from the company who knows what to do. That often means hugging, holding hands, and crying together. I have seen this approach do great things either as a prelude to or at a pre-suit mediation. The approach has to be essentially free of argument; the company or insurer needs to be “all in” on resolving the case. If funeral or living expenses are advanced, then there can be no expectation of quid pro quo when it comes to the eventual settlement.

Siebert:Yes. As I mentioned earlier, building rapport is key. In addition, we like to meet with claimants and their families pre-suit to discuss the situation. For example, in a fatality situation, we may offer to pay for the funeral to alleviate the burden on the family right away and set the tone for future negotiations. We also try not to talk about settlement in terms of dollar amounts, but rather in terms of alleviating worries. Thus, by meeting early with the family or claimant, we can discuss setting funds aside to pay for college, paying off a home mortgage, or naming a street after the decedent—things of that nature. It translates differently than just responding to their requests for paying the policy limits, for example.

Foster:What information, documentation, or deposition testimony do you need before you are in a position to mediate a case? Is the timing of the mediation important to you?

Pappalardo: This often is a function of hard work in the first hours and days immediately following an accident. An organized, rapid response goes a long way in figuring out what happened in an accident. Access to the vehicles and electronics/diagnostics, scene investigation, witness interviews, and interaction with law enforcement is invaluable. You can only get so far investigating damages without partnering with opposing counsel. The highly qualified plaintiff’s lawyers know that it is in their and their clients’ interests to give you as much information as is needed to make a reasonable evaluation of the damages range. This can include a statement under oath and an interview with or early deposition of the claimant/plaintiff.

Siebert:Of course it varies, but more often than not you know during the first six-to-eight months of the life of the file how severe the damages are and the injuries involved. So the sooner you get to the mediation table, the better. It may prevent claimants from building up the value of the claim in their minds. Early mediation also improves the margin for the plaintiff’s attorney. If the matter can be resolved before paying tens of thousands of dollars on experts, reconstructionists, and exhibits, then all the better because counsel is still receiving the same contingency percentage but doesn’t have to lay out as much out-of-pocket money.

McDaniel: If you can establish some sort of leverage in the case, perhaps through a motion for summary judgment, and you have enough discovery on damages, then I don’t think there is anything wrong with broaching the topic of mediation. Timing is important, though, as you don’t want to show a sign of weakness or anxiety.

Foster: Do you find that plaintiffs’ demands are excessive? In those venues that allow opening statements, do you find that they are effective in reducing plaintiffs’ expectations at mediation? Does the use of a mediator help to bypass the filter of plaintiff’s attorneys and provide a mechanism to reduce plaintiffs’ expectations?

Siebert: I’ve rarely seen a demand that is not excessive, which is partially why my claims professionals and panel counsel are encouraged to actually make a proactive offer instead of waiting for a demand. Making the first offer actually enables the defense to express their apologies and say that, despite being sorry, we don’t intend to overpay for their injuries or that we don’t intend to pay for pre-existing injuries or degenerative conditions. You also seem more reasonable in the eyes of the mediator by positioning yourself as having already made an opening offer rather than sitting back and waiting for an unreasonable demand. I even like bringing a structured settlement broker to the table in the right situations as a way of saying, “We know we’ll be expending money today, but let’s be reasonable in achieving resolution.”

McDaniel: Plaintiffs’ demands are excessive 99 percent of the time. It is the nature of the negotiation process. Opening statements in an open session at mediation setting tend to bolster claimants’ expectations. It does, however, allow the opportunity for the defendant’s lawyer to look and speak directly to the plaintiff in an effort to temper expectations down to a level of reality. A good mediator will then use the facts in both cases to bypass the filter of the lawyers in an effort to get the plaintiff to be reasonable.

Pappalardo: Of course they are; it is inherent in the process. I am acquainted with several big-hitter plaintiffs’ lawyers who tell me that the problem is that their colleagues are too reticent and don’t ask for enough money. I’m not a big fan of opening statements unless I have a strong liability case or the plaintiffs are overdoing their damages. Then a little sternness—the sort they will see at trial—may be helpful. Generally, I ask mediators to make my points, which I carefully map out for them. That is what they are being paid to do, and that is why picking a superb mediator is so important. It is important to invest the time and money into a first-rate mediation statement with legal citations, references to key medical records, and liability arguments. A brief provides the mediator with a roadmap and the tools needed to be persuasive with the other side.

Meet the Panel

Caryn Siebert is vice president and chief claims officer at Knight Insurance. She received the 2017 CLM Litigation Management Professional of the Year Award.

Joseph Pappalardo is a partner with the Ohio and Michigan law firm Gallagher Sharp LLP. He concentrates his practice in transportation and is a frequent speaker and author on trucking and motor coach topics. He is also co-chair of CLM’s Transportation Committee.

Sean McDaniel is manager of claims for Waste Management. He holds both AIC and ARM designations and has worked in the risk management industry for over 27 years.



James A. Foster is a partner at Chicago-based Cassiday Schade LLP. He leads an emergency response team for catastrophic transportation accidents and serves as co-chair of CLM’s Transportation Committee.

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