Missed Opportunity: The Under Use of Presuit Mediation to Resolve Bodily Injury Claims
Have you ever heard the following: a stitch in time saves nine; time is money; no time like the present; the early bird catches the worm; and the sooner, the better? These are all time-worn phrases that are often used to address the issue of the relationship between time and money.
Many, if not most, people feel that it is generally better to spend time, effort, and money dealing with a challenge early on. In other words, the sooner an issue is dealt with, the less it usually costs. If left unaddressed, the challenge may get worse, take longer to deal with, and cost much more money than originally budgeted or anticipated.
If you believe that in many situations, time is indeed money, one must ask the question: Why are plaintiff attorneys and insurance carriers missing a fantastic opportunity to resolve bodily injury claims through the use of presuit and early mediations?
How Early Mediation Benefits All Parties
Earlier resolution of bodily injury claims could be a win-win for the injured party, plaintiff attorney, and the insurance carrier handling the claim. The injured party receives much-needed funds and reduces the stress that goes along with litigation and the claims process. Their attorney minimizes the cost that the plaintiff is ultimately responsible for under most injury claims contracts and earns their fee in a more timely manner. The insurance company resolves an injury claim that could cost substantially more if it is allowed to stay around for a significant time as an open claims file. Additionally, claims staff and resources are freed up to move on to other matters.
Insights from an Insurance Industry Veteran
In the mid-nineteen seventies, I began my career as a bodily injury claims adjuster in Jackson, Mississippi. Little did I know that I would move to Florida, secure a Florida Adjusters License, and maintain the license for over thirty-five years. I was employed as an adjuster negotiating and handling serious bodily injury claims for three different major insurance carriers. This meant that I had to go through the adjuster training programs for three different insurance companies. I negotiated injury claims and represented insurance companies throughout Florida at many mediations alongside defense attorneys.
The training programs at each of these carriers varied. However, one principle remained consistent across all three companies:
The longer a claim remained open, the more it cost the company to finally resolve.
Why Aren’t Insurance Carriers Prioritizing Mediation?
This belief in early claim resolution led many insurance companies to open field claims offices and emphasize claimant contact within 24 to 48 hours. The goal was to settle claims as quickly as possible before personal injury attorneys became involved. However, once an injured party retains an attorney, the process slows significantly.
The claim file remains open for at least six months, followed by the submission of a demand package from the injured party’s attorney. At this point, the adjuster often extends a relatively low offer, which usually results in the injured party’s attorney filing a lawsuit followed by discovery and possible trial. The claims file can stay open for years, costing the carrier and plaintiff attorney thousands of dollars and loss of valuable time.
The Case for Early Mediation
In my opinion, both the insurance carrier and the plaintiff attorney are missing a golden opportunity to settle the case for a fair amount. Why not mediate the case during the demand phase or before the expiration of the twenty days that the defendant has to respond to the suit?
It could be beneficial to both parties to agree to a mediation at this point before time and thousands of dollars are lost to the litigation process.
The Financial Impact of Mediation vs. Litigation
Many, if not a majority of, cases settle at mediation. Additionally, many of those cases that do not settle at mediation often settle shortly thereafter due to the foundation laid at the mediation.
Thousands of dollars normally spent on attorney fees, cost of discovery, cost of medical experts, cost of accident reconstruction, engineers, transporting witnesses, housing witnesses, claims people attending trial, and other costs could be saved or greatly reduced.
Mediations usually last a few hours, half a day, or a whole day, depending on the issues and complexities of the case that is being mediated. While there is no guarantee that a case will settle at mediation, it will probably increase the odds that the case will settle in the near future.
Remember, trial brings its own risk, and one side always loses.
A Smarter Path Forward
Mediation often leads to a positive result for both sides. Think about it—a few thousand dollars spent on mediation or tens of thousands spent on litigation, trial, and possible appeal?
To paraphrase a famous quote, a dollar saved is a dollar earned.
Mediation should not be an afterthought. It should be embraced as a proactive strategy for resolving bodily injury claims quickly and fairly. Cooperation through mediation is often the key to success.
Lawrence Gordon is President of Phoenix Mediation, LLC. He has been a Florida Supreme Court Certified Circuit Civil Mediator since 2010. He has been a Florida licensed adjuster for thirty-six (36) years. He is a former multi-term member of the Florida Bar Unauthorized Practice of Law Committee. He currently serves on the Florida Bar Fifteenth Judicial Circuit Grievance Committee “D.” He was the first non-lawyer to serve on the Board of Directors of the PBC Trial Lawyers Association (now known as the PBC Justice Association).
