It seems like common sense. It would seem that if the defense is interested in trying to settle your case, that they are going to do everything possible to minimize the amount that they're going to pay to you.
Knowing how insurance companies and defense attorneys negotiate, you assume that if they make an initial offer, and you rejected it, that they will be willing to increase their offer in an attempt to resolve your case.
In medical malpractice lawsuits here in New York, the defense will rarely make an offer to settle until the trial. There are some cases where negotiation happens in the weeks leading up to jury selection. In other cases, the lawyers for both sides will try and have a mediation at some point prior to trial.
A mediation is an unofficial attempt to have a private settlement conference with the judge who has no interest in the outcome. If the efforts to mediate a settlement are unsuccessful, then the case proceeds to trial.
Negotiation is a combination of art and science. It is a combination of personalities and knowing what the other side wants. Successful negotiation requires a give and take and an understanding that you will not get all that you want and neither will the other side.
It involves recognizing that although there's certain strong points in your case, you may also have weaknesses that you need to truly understand. It means strategizing and forecasting what a jury is likely to do with the same set of facts. Negotiating a case is similar to playing chess. Each side can make certain moves and each sides' actions have a direct consequence and resulting action.
Getting back to the initial question raised in the title, if the defense has made an offer to settle and you reject it, will they automatically increase their offer to try and settle?
There are some cases that the defense wants to settle desperately. There may be significant risk and exposure if they proceed forward to trial. There are other cases that are questionable and could result in a defense verdict if taken to trial. However, the defense may make a business decision to try and settle for a specific amount of money knowing there is still a risk they could lose.
If the attorneys have a relationship of having worked together before,and they respect eachother, there is a real possibility that they will have a frank and honest discussion about what each side wants and needs. An initial offer by the defense which is promptly rejected by the plaintiff may result in a simple conversation that asks “Where is the insurance carrier going? Where do they need to be? How far are they willing to go?”
“What's your bottom line? Where do you need to be in order to settle this case? If I get you "X" dollars, will that settle the case?”
What happens if the attorneys do not have a good working relationship and do not know what to expect of each other?
Then you will see lots of posturing.
You will see hidden and subtle moves that could be a fake-out or an ambush. When you do not know your adversary and have not worked with him before, that may require you to have the Judge intervene in settlement discussions. This way you work through someone who is impartial and can filter out all the posturing.
Sometimes a defense attorney will turn around and say "This is our only offer. You can take it or leave it." Other times a defense attorney may say "Here's our initial offer. We have a little wiggle room, but not much."
In yet other negotiations the defense attorney will come back with an initial offer that is rejected and then we will have multiple rounds of give-and-take, further negotiation resulting in an increased offer as well as a reduced demand.
Contrary to what you see in movies and on television, settling a case with an adversary who is well-prepared and knowledgeable about all the details of your case typically does not happen overnight.
When the court directs all parties to appear for a settlement conference in court and tells the defense to have a representative from the insurance company present, all parties recognize that the judge is serious about trying to resolve their case and is willing to spend the time and effort to make it happen.
On those settlement days, I will always have my client present in court so that if and when the defense makes an offer to settle, I can immediately discuss it with my client who is waiting outside the courtroom.
Then I can have a discussion that explores the risks and alternatives available as well as provide my professional opinion about whether to accept or reject the defense's settlement offer.
Recently, I had a medical malpractice case that was scheduled for settlement conference with a judge in Queens County. The defense attorneys and representatives from the insurance companies were also told to appear. I told my client he needed to join me in court on that date. His response was “Do I really have to go to court and sit and wait around for hours?”
The answer was
“Absolutely. This is an opportunity for the judge to put pressure on the defense and the doctor's insurance company. Now is the best opportunity for you to get a substantial offer. I need you in court so that I can discuss with you any offer that comes in and then we can discuss the different possibilities. If you are not in court with me, that means I have to ask the court to postpone this conference and then have us return back in two months. That would be a true waste of time.”
In that medical malpractice case in Queens, my client did in fact join me in court where he spent the entire afternoon waiting for me outside the courtroom. All attorneys were told to be in court at 2 PM. Our case was there along with many others that the judge was prepared to see during the course of the entire afternoon. After two hours of waiting for our case to be called, the attorneys in our case were ushered in to the judge along with the insurance company representatives.
I made my brief presentation to the judge. The defense attorneys made their brief presentation. The judge then asked to speak to me privately. The judge came right out and asked me privately what I needed to settle this case. He asked me what my bottom-line number was. I had been before this judge many times. He was well-respected in the courthouse. He was an excellent negotiator. I had total confidence in this judge and his ability not to reveal my bottom-line number. He then asked to speak to the defense attorneys and their insurance company representatives.
I went out into the courtroom and told the defense attorneys it was their turn. 10 minutes later, the defense attorneys came out and told me to return back in to the judge.
He told me the reasons why the defense thought my client was not being straight. The defense made a big deal about some of my client's testimony that they believe contradicted things that were in the record. Despite that, the judge got them to offer a substantial amount of money in the six-figure range. I politely told the judge that their initial offer was inadequate and that my client would not accept that.
In fact, I told the judge that my client was waiting outside the courtroom and was present here in the courthouse specifically because we were serious about trying to resolve this case today. He told me he thought he could get the defense to come up with some more money. He then asked me if I would take "X" amount of dollars to settle this case.
The amount he just suggested was considerably higher than my bottom line number. I told him that if he was able to get that amount of money, then my client had indicated he would accept such a settlement offer. The judge then asked me to tell the defense attorneys to come in again.
I returned back into the courtroom and told my adversaries to go back in and speak to the judge.
I had not yet had the opportunity to speak to my client. He was waiting anxiously in the hallway. There were still many attorneys sitting in the courtroom waiting for the judge to call their particular case.
Five minutes later, the defense came back into the courtroom and told me to go in and speak to the judge with all attorneys and the insurance company representatives together.
The judge now wants to know whether we will accept that amount. I thank the judge and the defense attorneys but tell them I need to speak briefly with my client before giving my final answer.
At that point I go into the courtroom and into the hallway to find my client sitting on a bench eagerly awaiting news. I tell him the good news. I explained to him the sequence of events that just transpired as I explained above.
I detail the dance that we have done just now and the defense's initial offer. I explained to him the defense's reluctance to offer up any money initially because of their belief that he had been less than truthful about certain facts in the case. Nevertheless, I explain that their clients were still responsible for the harms and injuries they caused. That's why, I explained, they recognized the need to settle this case prior to trial. That's why they were willing to negotiate and sit down during the settlement conference and make a very substantial settlement offer.
As is common, the injured victim will often ask if there is any chance we can get more. That is our goal. That is the purpose of settlement discussions. Our goal is to get as much compensation for you as possible. The defense attorney's agenda is just the opposite. His goal is to minimize and reduce the amount that they have to pay out.
I explained very clearly that based upon the judge's discussions with the defense and with the insurance company representatives, this will be their final offer. There would be no chance that they would be willing to offer another dollar. The only way to get more money would be to go to trial and take a verdict.
My client then asked if that was risky. I explained in detail that even though we had a good case supported by medical experts, there was still the possibility that we could lose the case at trial. The jury might determine, for many different reasons, that the doctor and the hospital were not responsible and did not violate the basic standards of medical care.
Alternatively, the jury could come back and decide 'yes' the doctor and/or the hospital did violate good medical care but that the violation of the basic standards of medical care did not cause your injury.
Another alternative is that the jury could find that the doctor and the hospital did not treat you appropriately, and that the wrongdoing did in fact cause you some injury. However, the amount that the jury might award you could be less then what the defense is now offering. On the other hand, the jury could actually award you more. If that were to occur, there is a very good likelihood that the defense would appeal that verdict which could then take 1-2 years to resolve.
After having this lengthy discussion with my client outside the courtroom, it was clear that he was not eager to proceed forward with a lengthy trial and the uncertainty of what a jury would ultimately do. He knew that those contradictions the defense talked about would be highlighted throughout the entire trial. He also knew that his credibility could be affected and the jury might not appreciate some of those contradictions.
Despite the fact that the defense argued that my client was being less than truthful, they still offered him a substantial six-figure settlement that in my opinion, was a healthy and significant offer. As a result of our discussions, my client was able to make an educated decision about what was appropriate for him in this case.
I promptly returned back to the judge to report the fact that my client agreed to settle this case for the amount that was offered.
It was only with the judge's assistance were we able to get the defense to increase their initial offer to a number that was totally appropriate and acceptable to my client.
To learn even more, I encourage you to watch the video below...