TEN TIPS WHEN MEDIATING CATASTROPHIC INJURY CASES
-by Joseph J. Sullivan, C.S., Sullivan Mediations
It is quite common that tort and accident benefits claims be mediated at the same time in catastrophic injury cases. These are cases where the plaintiff’s injuries are so severe that they meet the definition of catastrophic injury within the meaning of the Insurance Regulation.
If there is a dispute in the accident benefits claim, I recommend that the accident benefits claim and the tort claim move along at the same pace so that settlement discussions can be more effective.
Technically, a plaintiff is entitled to claim all of his or her damages against the at fault motorist and then assign his or her accident benefits rights to the tort defendant insurer. These assignments are not welcome very often by a tort insurer because it keeps the file open and it requires the tort insurer to pursue the accident benefits insurer for benefits after the time of trial or settlement.
1. Barriers to mediated settlements can occur where a plaintiff wishes to mediate with the tort defendant, yet the accident benefits dispute has not been brought along in as timely a manner and the accident benefits insurer is not prepared to take a hard look at its file to bring a resolution.
In catastrophic cases therefore, it is wise to bring both the tort and accident benefits cases along at the same pace so that they are ready for settlement discussions (at mediation at the same time).
2. At such mediations identify what has been paid to date under each accident benefits category.
3. Are certain benefits still being paid on an ongoing basis and if so, at what rate (often referred to as a burn rate).
4. Is it likely medical/rehabilitation or attendant care accident benefit categories will exhaust their $1 million caps under the Statutory Accident Benefits Schedule?
5. Do the parties need structured settlement quotations to assess the accident benefits insurers maximum future exposure? If so, these should be obtained with 30 days of a private mediation so they are current.
6. Is there an issue that the plaintiff will claim future medical or other services at “market” rates rather than the lower accident benefits rates permitted under the Statutory Accident Benefits Schedule? This discrepancy can be significant and should be identified early on so the tort defendant has an opportunity to assess its exposure.
7. Is there an issue of past interest exposures under the Statutory Accident Benefits Schedule? These can be extensive and should be calculated well in advance.
8. If the plaintiff’s medical and legal disbursements are significant, then it is wise to tip off the defence as quickly as possible.
9. Typically, tort defendants will meet with their legal counsel four to eight weeks prior to a mediation in order to obtain settlement authority. Late breaking developments such as new medical reports, unexpectedly large disbursement claims and new economic loss reports can be problematic.
Similarly, if a tort defendant has some ground breaking evidence, it is wise to turn it over to the plaintiff so that counsel can review the evidence rather than having it dropped as a bomb in the middle of mediation.
10. Precise terms of settlement should be developed if consensus is achieved at mediation. Tort cases often settle on a “once and for all” basis for all claims in the Statement of Claim arising out of a particular accident. Typically, all litigation is dismissed without costs and Full and Final Releases are signed.
Sometimes, however, there might be special terms that need to be considered in a Minutes of Settlement that include the following:
• Is the settlement subject to court approval?
• Is the settlement subject to Family Law Act claimants approving (if they are not present at the mediation)?
• Is the settlement subject to a mental capacity assessment if there is any doubt that the plaintiff understands the settlement?
In terms of accident benefits cases – is the settlement a full and final release of all past, present and future claims whether submitted, approved or incurred to date?
Prior to mediation it is important to identify any treatment expenses that a medical provider may have incurred, but has not been paid (for example, the physiotherapy treatment plan that be half way exhausted).
Such treatment providers should have statements prepared as to what might be owing. A barrier at mediation occurs when these inquiries are not made until late in the day because the treatment providers may not be able to provide last minute statement of expenses. I recommend that plaintiff lawyers contact their law clerks back at the office and the treatment providers early in a mediation so that everyone has a heads up that inquiries might be made.
Sometimes insurance adjusters may not be aware of the progress of a medical providers invoicing through the insurers billing system. The treatment provider is always aware of what expenses are outstanding.
Prudent plaintiff’s counsel will also explain the nature of a full and final settlement of an accident benefits claim and that if there are any other expenses that the plaintiff wants paid, these should be identified early on (avoid the shoebox full of receipts the plaintiff may have at home that he or she presumes may also be paid in addition to the settlement).
Many times in larger cases, weekly income benefits are continuing to be paid at the time of a private mediation (as well as attendant care monthly payments). It is important to identify the precise settlement terms as to when these regular payments will be stopped if there is a full and final cash out of all past, present and future claims.
Finally, a usual term in an accident benefit settlement is that any litigation or arbitrations will be dismissed without costs.
As a mediator, I like to see that both parties are “on the same page” on the morning of the mediation and the fewer the surprises the better.
Both plaintiffs and insurers need to be prepared by their counsel for the management of client expectations. Insurers must be careful to have their reserves set accurately and plaintiffs need to be made aware of any defence evidence that could harm that case.
