SETTLEMENT OF PERSONAL INJURY CLAIMS USING ALTERNATE DISPUTE RESOLUTION PROCEDURES

Alternate Dispute Resolution (ADR) is a term used to describe several methods of resolving cases prior to trial. ADR has risen to prominence in the past two decades for all types of legal disputes including personal injury claims. This article will discuss voluntary ADR procedures, which are usually non-binding though the parties can and sometimes do agree otherwise.

The type of ADR being discussed should be distinguished from mandatory arbitration agreements which are being increasingly used for potential consumer claims. The federal courts have approved the use of arbitration agreements by manufacturers and other institutional businesses which often insert such agreements in the text of consumer sales agreements. These type of agreements allow businesses to avoid jury trials and class action claims, though they must still contend with claims in arbitration.

The reason for the popularity of voluntary ADR is, in a word, efficiency. The courts are quite slow in getting most cases to trial, and ADR allows the parties to more promptly resolve the claim. Trials are also expensive, requiring enormous amounts of preparation time by both parties to comply with rigid rules of evidence and to prepare for a thorough jury presentation. Juries are also unpredictable, and both parties may feel more assured having their dispute resolved by a third party neutral with expertise regarding the claim in question.

Many courts have ADR programs in which the parties are ordered to participate. This can be a productive activity, though, in my experience, it is not as effective as private mediation. One reason for this is that parties who are ordered to mediation may not really want to be there, and they may think they have a strong case and will ultimately win. If that is their mind-set, they will be reluctant to offer much in negotiation. One positive feature of court ordered mediation is that it may be inexpensive as compared to private mediation.

It is usually a promising development for a personal injury claimant when the defense agrees to participate in private ADR. The defense is not required to settle any given case, and, if the case can be successfully defended, defendants often try to do so. By agreeing to participate in ADR, the defense is acknowledging that it is prepared to make a payment. The key question of course is the amount of that payment.

The most popular form of ADR in the personal injury context is non-binding mediation. This is a procedure where a third party neutral is hired by the parties to evaluate the case and persuade the parties to settle. This procedure usually takes a full day, perhaps more. The parties typically meet at the mediator's office and start with an informal overview of their respective positions. The mediator will ask general questions to gain familiarity with the issues in the case. The parties are then broken up into separate conference rooms for the remainder of the session, hopefully with offers and counter-offers being traded back and forth. I have settled many cases in this manner.

I have noticed a dis-spiriting trend of late where defendants agree to mediation then make no realistic offers to settle the case. In my opinion, this may be done for strategic purposes to demoralize the plaintiff, or to gain a more thorough understanding of the plaintiff's case. To avoid this scenario, I require a pre-mediation offer of settlement to assure myself that it will be a good faith negotiation.

Other ADR procedures include arbitration, either binding or non-binding. This is essentially a mini-trial of the case which is presented to an arbitrator or panel of arbitrators. The rules of evidence are typically relaxed somewhat, to streamline the proceeding. In my experience this is rarely done voluntarily in personal injury litigation.

Other ADR procedures are also available, such as case evaluation by a third party neutral and others. Litigants should keep an open mind when considering these options. The sooner a case is resolved the better for all concerned. While resort to the courts remains an option, the wheels of justice turn slowly.

Copyright 2004 by Schulten Ward & Turner LLP. All rights reserved. For more information contact the author, dlt@swtlaw.com or call 404.688.6800.

DISCLAIMER: THIS ARTICLE IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. FOR SPECIFIC ADVICE ABOUT YOUR LEGAL SITUATION, CONTACT COUNSEL OF YOUR CHOOSING.