The Art of the Deal: Tips for Successful Mediation in Pennsylvania Workers’ Compensation Cases
by Lori O. Strauss, Esq.*
In 2006, an amendment to the Pennsylvania Workers’ Compensation Act created a mandatory mediation system. This followed an overall trend in the legal profession to attempt to resolve conflicts through alternative dispute resolution, thereby eliminating the uncertainty of the outcome determined by a judge. In many cases, mediation holds down legal costs, including expert fees and attorney’s fees.
The mandatory mediation system requires that the judge establish a mediation date at the first hearing of each case. The parties cannot control the assignment of the mediator. Some judges are excellent mediators who have embraced the concept that they can play an effective, helpful role in a process that bears no resemblance to litigation.
In addition to mandatory mediation, the parties can agree to a voluntary mediation, thereby ensuring the choice of the mediator and the time of the mediation in the litigation process. Nothing precludes the parties from attending both a voluntary and mandatory mediation, although it is rare that parties will attend both mediations. In some situations, the mandatory mediation is held too early in the process or the parties cannot reach a resolution. So, the judge will agree to conduct a second mediation in a voluntary mediation setting. This allows the same judge to serve as the mandatory mediator and follow up in the second voluntary mediation setting.
The following are tips and strategies to ensure successful mediations:
- Submit an Informative, Confidential Mediation Memorandum – Each party must provide the mediator with a Confidential Mediation Memorandum that succinctly educates the mediator about the nature of the case, the key issues, and both the strengths and weaknesses of the case. The memorandum should also discuss the average weekly wage and compensation rate; the amount of any back-due benefits that may be owed; the overall case value; and the status of negotiations. Some mediators look favorably upon at least one offer being made prior to the mandatory or voluntary mediation. This information, along with authority, should also be included in the memorandum.
- Outstanding Medical Bills – Especially in a Claim Petition setting, the amount of all outstanding medical bills, and the respective providers associated with those bills, should be requested by the defense attorney and provided by claimant’s counsel. In order to reach a full Compromise and Release, medicals are often paid. If the amount of those medicals is exceedingly high, it can break the deal. If the parties are aware of the amount of the outstanding bills, the claimant’s attorney can sometimes contact the doctor(s) to negotiate down the bills. Often, it is one provider, in particular, who has an extremely high balance of outstanding bills, and the claimant’s attorney can serve as an important negotiator with the doctor’s office to negotiate the bills down. Do not blindly agree to pay any and all outstanding medicals without knowing what they are. Similarly, there should be discussion as to whether there are any outstanding out-of-pocket expenses alleged by the claimant.
- Projected Cost of Future Medical – In a case where benefits are already being paid, it is especially helpful for the defense attorney to know the amount that was paid in medicals for the past three years with a breakdown year by year. Assuming that medical payments have decreased, that fact can be utilized in valuing the case in terms of projected costs of future medical and the amount of the overall settlement.
- Medicare Set-Aside Issues – The parties must be aware of whether a Medicare set-aside is required. If it is necessary to have a set-aside, assuming the evidence supports a termination of benefits, an indemnity-only settlement can be agreed upon, and the parties can then go to decision on a Termination Petition.
- Participation of Employer’s Representative – It is helpful to have the employer’s representative attend the mediation, either in person or by phone. Most judges look very favorably upon the participation of an employer’s representative. The mediation is a great opportunity for the employer to express to the mediator some of his/her feelings and concerns. The claimant is always present and has that opportunity. Some of the most successful mediations are those attended by the employer’s representative. This attendance indicates to the claimant and the mediating judge how important the case is to the employer. I personally encourage clients to be part of the process and to attend the mediation.
- Third-Party Case – Be aware as to whether there is a third-party action, and try to have a handle on the strength of that third-party action. As part of the negotiations, you can choose to waive all or part of a lien. It is much easier to include this as part of the overall negotiation if the same attorney represents the claimant in the third-party case and the workers’ compensation case.
- Other Benefits – Be aware of whether the claimant has received other benefits, such as unemployment compensation benefits; short-term/long-term disability benefits; sickness and accident benefits, etc. A credit is asserted with respect to unemployment compensation benefits, and to the extent that the employer funded the short-term disability/long-term disability benefits, a credit is taken with respect to those benefits. This information should be utilized as part of the negotiation process.
Mediations represent a useful tool in saving the insured time and money. It can lead to an end to the uncertainty of litigation, and it is an excellent form of dispute resolution. In the words of Abraham Lincoln, “A good settlement is better than a good lawsuit.” Mediation should result in both parties feeling that they have some control over their own destiny.
*Lori, a shareholder in our Philadelphia, Pennsylvania office, can be reached at 215.575.2734 or firstname.lastname@example.org.
Defense Digest, Vol 21, No. 4, December 2015
Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2015 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact email@example.com.