NEGOTIATION AND MEDIATION - PRACTICE AND PROCEDURE

Presented By:

Jeffrey E. Hickcox

Negotiation - Issues And Practice

Negotiation is an important part of everyday human interaction. Without even realizing it, we negotiate with our spouses and friends about which movie we will see, what purchases we will make, and where we will go on vacation. While we may be more compromising in these encounters than in the context of a claim, we still approach those friendly negotiations with some goal in mind. The whole purpose of negotiating is to satisfy the desires of the parties. Without a preferred outcome, there would be no need to have a discussion; you would simply do what the other person wanted. Obviously, that does not work very well in handling claims and seldom works in lasting personal relationships.

Communication

Effective negotiation requires effective communication. A skillful negotiator is as adept at listening to what her opponent is, or sometimes more importantly, is not, saying as she is in choosing her own words.

You will negotiate the settlement of a workers' compensation claim with the person next to you based upon the hypothetical problem in the handout. You may communicate only in writing and must not talk or gesture. The only information that can be conveyed to your adversary is an offer or demand.

Once the results of the other participants are recorded, ask yourself how you did. Was the result you achieved what you had hoped for going in? If your result was less than what you had hoped for, why did that happen? Were your expectations too low? What kinds of problems did this interaction pose for your? Would you have gotten a better result had you been able to communicate freely? Do you sometimes approach settlement negotiations in such an antiseptic manner?

Communication is both verbal and nonverbal. Since most of the settlement negotiations in which claims professionals are engaged take place over the telephone, nonverbal cues are harder to discern and often simply incapable of detection. Accordingly, it is extremely important to listen to what is and is not said by your opponent. Are the demands made by your opponent equivocal? Whenever you hear "do you think you could get me _____?" or "is this all there is?" or something similar, it's a pretty safe bet that the other side is willing to accept what you have offered already. Demands couched in terms of "we would like" or similar phrases generally mean that they are highly negotiable. These verbal cues are important and should not be missed if you are going to effectively negotiate a claim.

Nonverbal cues may be leaked over the telephone, particularly if you know well the person on the other end of the line. Listen for changes in his or her voice. Does he sound as confident today as when you last talked? Was there a less-than-articulate delivery of the demand? Did the other side make more small talk than usual? Were there any stutters, or pauses? Again, these are difficult to read over the phone, but can be quite apparent when the speaker is well known.

Preparing for Negotiation

Like most things in life, effective negotiation requires a goal and a plan. Think about it - without a goal, how much can you hope to achieve? Without a plan to reach that goal, you do not have much of a chance to accomplish anything that you will be proud of.

Before beginning any negotiation, you obviously need to be well acquainted with the facts of the case. If settlement is the issue, make a reasonable assessment of the value of the case based upon all the facts. Once you have established the value of the case, think about the needs of the claimant as well as your own that will play a role in the negotiation. Does the claimant need money? Has the employer instructed you to get this file closed? Do we have a defense? Once you have done this, set a target settlement amount as well as a maximum that you are willing to pay. Next, estimate what you think the claimant's "bottom line" may be. Now that you have set a goal, you need to execute a plan.

Whatever offers you communicate must be based upon some rational evaluation or they will not be considered persuasive by the claimant or counsel. What kind of factual or legal advantages do you have? Is there light duty presently or arguably potentially available from the employer?

What arguments will the claimant's attorney make in response to yours? Do you have a young claimant who counsel contends will remain on disability the rest of his life? Is the claimant too young to realistically expect that he will be content to sit at home and watch daytime TV the rest of his life? Is the claimant's life expectancy such that, when reduced to present value, the demand exceeds the value of the case?

Do you know some things about the claimant that perhaps the counsel does not? Particularly in claims that may go into litigation, decide in advance how much you want to divulge and at what point in the negotiations you want to divulge such information.

What kind of approach will you use? Will you be hard-nosed and uncompromising or will you be cooperative? Sometimes, a mix of the two is useful. It does not hurt to concede a point that you know you can not win. This has the psychological effect of making you appear to be reasonable. It also boosts your credibility when you tell the other side what you will not do.

Negotiation Exercise

For this exercise, pair yourself with the person whom you participated in the last exercise with. Unlike the previous exercise, you may use any form of communication you deem appropriate.

How well did you do as compared to the other participants? How could you have done better? What did you do well? What things could you improve upon?

Mediations at the State Board of Workers’

Compensation

The Board now conducts mediation on almost all issues that arise in workers' compensation cases. However, the most common are for change in physicians and settlements. The mediators employed by the Board are neutral parties. Anything said to a mediator in the course of the mediation is confidential and will not be disclosed to the other side unless the mediator is authorized to do so. Similarly, mediators can not be called to testify at hearings. There is no record of the mediation so that an ALJ subsequently hearing the case will only know that mediation took place and was not successful.

The Change in Physician

This process begins with one side filing a request for a change in physicians, which is met with an objection by the other. The parties must then each appear at the Board and bring the names of three physicians with whom they are agreeable. The employer is required to bring a copy of the panel of physicians as well. After a conference with all the parties, the mediator may separate the parties into private caucuses. More frequently in change of physician mediations, the parties have a discussion with the assistance of the mediator about changing doctors. If the parties are unable to reach an agreement, the matter will be referred to an ALJ who will rule on the request for a change in physicians. This is most often done without an evidentiary hearing although such a hearing may be requested.

The Settlement Mediation

So long as all parties are in agreement, the Board will conduct settlement mediation. Typically, the mediation begins with all parties meeting in the presence of the mediator. All participants have an opportunity to state their position in the case. This is typically a useful exchange of information. Oftentimes, this is the first time the claims professional has actually seen the claimant. Further, it insures that the claimant will hear what you want him to - things such as light duty work, knowledge of some outside activity, etc. After the parties have stated their position, the mediator will break the parties into private caucuses. Following this, the exchange of information between the parties is accomplished through the mediator. While the use of mediators is helpful, it does eliminate from the process nonverbal cues. However, either side can ask for a meeting with the other in the course of the process. Mediations are non-binding and the parties are not required to reach a settlement.