The Pandemic (Legal) Effect: Why Settling Cases is the Welcome ‘New Normal’
It is to everyone's advantage to embrace this trend and settle for a fair number without the old-fashioned ritual dance. Plus: six things you must know when resolving cases during a pandemic.
The pandemic has vividly illustrated what happens when an inflection point reaches the courts and has changed how we look at resolving cases. Instead of the usual steady tidal action of cases going to court and eventually settling during pre-trial conferences or on the eve of trial, cases now get stuck at the proverbial courthouse steps.
For the past 14 months, the courts have been closed or operating at significantly reduced capacity. Due to a reduction in judges, court personnel, and jury trial limitations resulting from COVID-19 protocols, personal injury settlement in courts has slowed considerably. As the courts reopen for trials, there are so few trials that they are the exception and not the norm. For example, in Bronx Supreme Court, one of the busiest courts in New York City, only two civil cases are being tried. These cases are summary trials where no jurors are deciding, but instead are on a statement of facts before a judge.
There have been mixed results for settling cases during the pandemic. Anecdotal evidence suggests that some insurance companies are not upset or uncomfortable with the prospect of fewer cases settling, as it allows them to delay paying claims and using the money for reserve purposes. Because new cases filed in New York were down 24% from 2019, increasing caseloads for adjusters are not driving settlements.
There is a commonly held misperception that defense attorneys do not want to settle cases, since every settled case represents lost billing and reduces open cases for a firm. There has been some truth to that notion over the years as plaintiff's attorneys have long accused defense attorneys of not relating their interest in resolving cases to insurers.
At Pillinger Miller Tarallo, faced with stalled courts, a reduction in judges and court personnel, we have taken a leadership role in the industry as resolution experts. This past year, we resolved almost 1,300 cases – which represents an increase of 38% from 2019. We resolved nearly 500 through mediation and arbitration. Our results are even more impressive when compared to a 44% decrease in settled civil cases within New York City trial courts.
This year, we will continue our efforts and continue to focus on early resolution for clients. With the slowdown, rather than sitting back and waiting for things to reopen, we've taken the bull by the horns and scheduled countless nonstop mediation days with various carriers and clients, and we have had tremendous success.
It is to everyone's advantage to embrace this new normal and settle for a fair number without the old-fashioned ritual dance. Why wait years for a case with costs mounting for insurers and litigants, both plaintiff and defendant, frustrated with the seemingly interminable delays? At PMT, we combine an aggressive but fair resolution of cases as quickly as a case is ready to be settled. We ensure an accurate value on the case by utilizing our roundtable case value evaluation from the defense and insurance perspective. We put together a mastermind meeting every day of five to seven senior partners with a combined 200 years of experience.
The assigned attorney presents all details of the case and all of the case's subjective information, which typically causes cases to be unrealistically valued. The roundtable produces a valuation number result that is astonishingly 95% accurate. Our system works because plaintiffs know our number is fair, and there is no fluff. Insurance companies know our number is based on years of experience within our industry by settling cases from the simplest to the most complex and catastrophic. Carriers come to us asking us to resolve cases early in the process.
One example of this with my firm is designated counsel for a construction labor law program in New York written by a large multi-national insurance carrier. Liability can be absolute under New York's Labor Law, and injuries can be catastrophic, with multi-million dollar monetary damages the norm. With our carrier, we run a monthly program of mediating these cases, and we approach plaintiffs' attorneys as soon as we can evaluate the case. In one particular case, with significant injuries and a lifetime loss of earnings of millions, we were able to mediate the matter before depositions and lengthy discovery. Because all parties saw the advantage of early resolution, we settled within 18 months of commencement of the case for a fair number acceptable to both sides.
I stand by six things you must know when resolving cases during a pandemic.
1. Insurance carriers crave settlements: Experience teaches there is a long way between the initial demand by a plaintiff and the ultimate resolution. Like a ritual dance, there is a process to a successful resolution. Insurers are always looking for low-hanging fruit, that is, cases that can be resolved before their defense costs mount.
2. Cavalry coming? Not a chance: With the reduction in judges, court personnel, and long delays, a judge will not be able to devote much time to attempt to settle your cases. If a judge ever had time in the past trying to resolve cases, those days are long gone given the court's current state.
3. DIY (do it yourself): If you want a case settled, you must do it yourself and push to get it done because no one will try to get it settled other than you. The emphasis is on individual attorneys, both plaintiffs, and defendants, to move their cases. It is incumbent on everyone to resolve cases now that the courts will be operating with backlogs and reduced access.
4. Too early to settle? Never: Insurance companies live and die by dispositions, so they are often eager to resolve the case as soon as it makes sense. A realistic demand makes insurance companies want to move a case early. They know this will save them expenses and defense costs. Therefore it is often the most opportune time to settle the case early in its lifespan.
5. Too late to settle? Never: You may have a case sitting and gathering dust for a while, and these are precisely the kind of cases that insurance companies try to settle the hardest. Injuries can lead to more surgeries, and defense costs can escalate. The adjuster and the company want to get these cases closed. No one wants to hear, "this is the oldest case on my docket." There's always an opportunity to reach out to defense counsel or the adjuster for unresolved cases and attempt to move the case. Although both plaintiffs and defense attorneys sometimes dawdle settling cases, old cases are not like fine wine – they do not get better with age. Nor should a plaintiff or defense attorney desire a jury of six ordinary citizens to render the ultimate decision fully knowing how unpredictable juries can be.
6. Case closed: Clients and insurance companies love closed cases. If you want to gain the thanks of your clients and insurance companies, settle cases. They will appreciate the effort. If you settle one case, more will come your way, and if you want to make a friend in this business, settle your cases. Your clients will thank you for it.
Having settled thousands of cases throughout my career, I believe more than ever we are all in the resolution business. It is our most important job. Since the courts cannot resolve cases like before, we must work together to settle cases and reduce court backlogs. We must embrace the "new normal" of aggressively settling cases. The phrase "case closed" is music to everyone's ears.
Jeffrey T. Miller is a managing partner at Pillinger Miller Tarallo LLP (www.pmtlawfirm.com), a full-service civil litigation defense firm which has 10 locations throughout the Northeast in N.Y., Pa., N.J. and Ct. Mr. Miller oversees the firm’s litigation department. He can be reached at firstname.lastname@example.org.