Millie is 90 years old, but still lives independently. She is even able to drive her own car. In her entire life, she has never had an accident while driving. One afternoon while in town to shop at the grocery store, suddenly she is t-boned by a vehicle driven by a teenager on a cellphone. Millie is critically injured and taken to a hospital where it is determined she suffered a fractured hip which requires extensive surgery. Millie goes to rehab but learns that she now must reside in an assisted living facility and will never be independent again.
The teenager who was driving the vehicle had an insurance policy with a monetary limit which paid a maximum of $500,000 per accident. She is cited and convicted of inattentive driving.
Christine Bremer Muggli , Loyola 1978, is the chief shareholder of Bremer & Trollop Law Offices, S.C., Wausau, where she practices primarily in the areas of personal injury, accidents, product liability, and worker’s compensation.
Millie has medical expenses in excess of $150,000. Her daughter wishes to seek compensation for the injuries to her mother, and comes to you for legal help. Her mother is very frail and emotionally distraught. She worries that her mother may not withstand the rigors of a lawsuit. Millie’s daughter has not however, been able to deal with repeated contact by an insurance adjuster asking for information and a statement from her mother. The adjuster is claiming that Millie is partially at fault as it was an intersection collision and Millie did not exercise proper lookout. Worse yet, not all of Millie's medical bills are being paid by her Medicare coverage and her supplemental policy. The bills are being placed into collection.
Millie’s daughter needs help and needs to know what to do.
To Sue or Not to Sue?
Millie is elderly and does not want a lawsuit filed. “I am not that kind of person,” she says. The teenager's insurer does not want the expense of defending such a case.
How can this matter be brought to resolution for both sides?
In such a case, it seems early mediation would serve all of the parties in the most efficient manner. The question is, will all the parties agree to come to the table to attempt early resolution? Must a lawsuit be filed to flush out all of the facts and issues involved?
While alternative dispute resolution (ADR) is often deemed as the most cost-efficient method of resolving disputes, it certainly does not work in every case. It is clear however, that in the realm of personal injury litigation where liability is not hotly disputed, damages are extensive, and policy limits may not be sufficient to adequately compensate the injured party, it would be the best way to quickly come to resolution, especially under the circumstances of Millie's case.
In the case of Millie, we know it will be difficult for a catastrophically injured 90-year-old woman to withstand the rigors of litigation. A prompt and fair settlement would be in her best interests. Moreover, it may also be in the best interests of the insurer of the teenager who contributed to the loss. The insurer’s interest is obviously in avoiding extra contractual damages or exposing their insured to a personal risk.
Assumptions and Strategies
To determine whether pre-suit mediation would likely be successful, each side must flush out certain assumptions, and a strategy must be employed by each side to make certain that the purpose for the pre-suit mediation meets respective needs. The greatest risk to a successful pre-suit mediation could be a lack of shared expectations. For example, Millie and her daughter might assume that if the insurer agrees to pre-suit mediation, it means automatically that the policy limits will be offered. The insurer on the other hand, may incorrectly assume that Millie’s attorney is willing to give a discount off the policy limits, or that the insured will be shielded from contributing to the settlement.
The parties should also question if a strategic advantage is forfeited by agreeing to pre-suit mediation. Strategies, tactics, theories and facts may be revealed that will weaken the hand if pre-suit mediation fails. Obviously, judgment comes into play. In current civil litigation, discovery is almost limitless and there can be few examples where there is information that is not known by all parties after a thorough vetting of the facts. This is true especially in personal injury matters where courts are very reluctant to allow the plaintiffs to fail to reveal any information concerning their physical backgrounds. As such, it is likely that revealing information pre-suit is generally more likely to move a person to settlement.
An additional concern for Millie in this case: Could she survive litigation? What would be the emotional toll on her? Would she get an advantage with regard to estate planning if she were able to settle more quickly, with more control over the settlement process? How do issues of Medicare liens come into play under the circumstances? Will there need to be a Medicare Set-aside Agreement?
For the defendant, the cost effectiveness of pre-suit litigation is certainly something that comes into play. In addition, the avoidance of an excess verdict over and above policy limits is something that is always a consideration.
Preparation for Mediation
The downside for both parties is that all work with regard to Millie’s claim would have to be done promptly and without the benefit of formal discovery rules or subpoena powers. Medical records would need to be ordered, doctors’ reports would need to be obtained, all special damages would need to be itemized, and a full investigation conducted into the facts of the accident. To obtain all of this information without the benefit of the formal discovery process is difficult, but not impossible.
Expert engineers can give accident reconstruction reports pre-suit if the facts are clear from the police investigation. Reports of damage witnesses can also be obtained. Treating doctors will usually provide a final medical report, as can other experts as necessary. In the case of Millie, a geriatric specialist could opine on the effects of catastrophic injuries to a person in their 90s, as well as the loss of independence, the shortened life expectancy and other co-morbidities. Such reports can certainly be obtained and provided pre-suit, as in the course of litigation.
Choose Your Mediator
A final, but crucial issue that must be resolved is who will be chosen as mediator. Generally, the plaintiff will allow the defense to pick the mediator. However, both sides must agree on a mediator with experience who will move quickly on the matter and do the work so that a meaningful mediation can take place. If the mediator knows that both sides are motivated to settle the matter, it can be just as successful as with suit. Sharing of mediation statements and reports is crucial to the success.
Consider the following a checklist for the parties in order to move forward with successful pre-suit mediation:
For the injured party:
- Consider drafting and sharing a complaint if you are the plaintiff. This proposed complaint should provide a detailed statement of all potential claims. Include it in your mediation materials.
- Obtain full factual investigation and provide witness statements to the defense. This way, you are demonstrating that the facts are clearly developed and there is no need for further discovery.
- Provide engineering reports if necessary. In the case of Millie, it may be necessary to show that she did not violate any rules and had used adequate lookout before the incident occurred.
- Provide final reports of treating physicians. Make certain full and complete medical records are provided to the insurer, and reports of doctors giving final opinions if possible. This may include at least five years of prior medical history.
- Provide a full and complete itemization of special damages. This should include complete copies of medical bills and estimates of future expenses, all documented so that there is no question with regard to veracity of the numbers.
- Make certain to have subrogation liens itemized and complete, especially with regard to Medicare. It will be necessary to have a Conditional Payment Letter from Medicare at mediation. This will show what Medicare has paid to date on bills related to the treatment for injuries from the accident. A certification from the treating physician that end of healing for the motor vehicle accident injuries has occurred and that there is no future treatment involved, may be necessary to avoid the need for a Medicare Set-aside. On the other hand, if you have an opinion that there will be future treatment necessary, it would be important to have the estimates of future treatment clearly spelled out by the treating doctors and their billing offices.
For the insurance carrier:
- Share the response to the alleged claims that will be asserted. The insurer should indicate that it will seek to show that had she taken evasive action after exercising proper lookout, the incident would have been avoided.
- The insurer should also make certain the injured party is fully aware of the theories that will be utilized to try to diminish damages.
- Expert engineering reports or medical reports should be shared.
When to Use Pre-suit Mediation
Pre-suit mediation can be an excellent method of resolving disputes, as long as both parties come to the table with reasonable expectations, having done the hard work to make certain all issues are flushed out and evidence of losses is clearly provided.
To the extent protracted and expensive litigation and the uncertain result can be avoided, the parties will mutually benefit.
Millie's life will likely never return to normal but she has peace with the resolution of her claim. The teenager involved has likely learned an important lesson about using a cellphone while driving.
Both sides have been well served by diligent and practical advocacy effectively utilizing pre-suit mediation.
More About the Author
Bremer Muggli is the past president of the Wisconsin Association for Justice and currently chair of the Justice Fund. She was a delegate to the Democratic National Convention in 2008, 2012, and 2016, and also served as a member of the Electoral College in 2008 and 2012. In 2010, she was awarded the Robert L. Habush Trial Lawyer of the Year by the Wisconsin Association for Justice. She also serves on the board of the State Bar of Wisconsin Litigation Section.