Pros and Cons of Mediation?

Marilyn1h
I don’t know how to start a new discussion so will add to this topic.

My LTD insurer asked for a mediation instead of the scheduled discovery. When we got there they gave a low ball offer of the decided value of my claim. Approximately 6%. I was ready to compromise but there was none at all on their part. The negotiations failed once the mediator got both bottom offers. He said we were too far apart to ever agree. We had only negotiated for 2.25 hours perhaps. With only 2 offers going back and forth. I felt the mediation was really rushed. I don’t understand why the insurance company wanted to go to mediation if they weren’t prepared to compromise. Was it just a cheap discovery for them? We now have to book a discovery and a court date so could be another 2 years before trial. I am confused. Would have liked to have the whole thing behind me. I don’t want to go to trial but I am prepared to go. One reason given for their low ball offer was that I just went to WCB Tribunal and they feel I will win (only 9% of tribunal cases are overturned). This does not make sense because they had a condition on their offer that would have them be paid back if I was awarded WCB. Are they just trying to waste my time and money as I have to pay half of the mediation?

This happened to me in a home insurance claim with Judicial mediation. A complete waste of time, money and effort.

I feel that it is very likely they were wasting your money and time as well as early discovery prior to the scheduled examinations.

Insurers often use motions, delay tactics to drag it out so you may run out of money, energy and might even die. An insurer legal costs are a tax write off. My advice is to push to examine the Insurer (they hate that) and set a trial date (they hate that even more)

You get to choose who to examine from the Insurer so you and your lawyer should not let a professional rep from the Insurer be examined–go for the case manager or other low level employee (they hate that)

On the bright side-since they wanted mediation it means they likely think they will not win against you–if they thought your claim was baseless they would run you into court!

We thought that since they wanted the mediation then they wanted to deal too but didn’t seem to be the case. I went in willing to compromise as my lawyer suggested and I did compromise…I just wanted it over but I was shocked at their stance. So, they really lose nothing if their legal payments and probably associated expenses are tax write offs. I would really love to go to court but it is a really big gamble…5050 and I could get stuck with a huge bill. But the way I see it is this…everything is in the insurers favor, their policies, the legislation, everything. If we don’t get our cases to court than they are not a matter of public record and the employers have no clue that their employees are truly not covered, that there is no safety net. Individuals buying LTD insurance don’t know it is pretty much worthless. By the time we get to court all the judge can award is retro payments and then we are cut off again. The most in Atlantic Canada for damages is in the vicinity of $15,000. If we do win, there is not much left after cost.The insurance companies have the money and lots of it to gamble with us little guys in court. And, I understand that most of these trial judges are past defense lawyers. And there is so much more to consider. How the heck are we supposed to win? How do we get the word out in public? There are no stats saying these clients settled for this low ball amount because they couldn’t risk court over such a small gain, so settled and then not allowed to disclose facts. If this isn’t made public and backed up with stats then the legislation will never change. What a crazy system this is. Sorry for the rant.

Your Insurer likely was also using the mediation to lowball you so that you would be more receptive to another lowball offer.

6 cents on the dollar might lead you to be more willing to accept 20 cents on the dollar in the future. Not sure why your claim is 50/50 chance?

In Manitoba a lot of disability claims are filed against Insurers in our simplified process and then put forth before a judge more quickly to decide the question of disability to get the retro payments to the claimant faster-may be by an application to the court. Not sure if this is an option in the Atlantic provinces.

The best provinces for aggravated awards is BC and Ontario. I too live in a province where seeking aggravated/punitive damages is very low. Even if they are awarded, Insurers often appeal and appeal courts reduce the award.

That said anytime an Insured who is wrongly denied their claim lawyers up and fights back is a win for all. About 90% give up…and from the 10% who fight back–only a small amount actually make it into court. The 10% who stand up/lawyer up are where the hope for change happens. Good for you to go down this difficult path.

The 50/50 chance would be in court where I would either win or lose? Problem is going to court is the chance that I may have to pay a portion of the insurer’s legal fees. I don’t have that kind of money. I guess that is why so few cases makes it to court. You are right, every win is a win for us all.

Perhaps, they will give another offer and are just postering. I don’t know. They want to hear from WCB first but they have until January 31st to decide. I sure hope I get the WCB instead but the chances at Tribunal or so slim…9% are overturned. They may just decide to go to court, though I know they don’t like court cause it exposes them.

I guess everything will be decided by their averages and algorhythms I guess. I am just so angry that it is all so secret and so terribly wrong.

I will be slow to go back to any other mediations if suggested by the insurer. That just cost me a lot of money for nothing.

http://www.pensacoladisabilitylaw.com/2011/lump-sum-disability-settlement-calculator/

Link to a settlement calculator-American but still gives a good estimate

Thank you. I have used this calculator before and then at the start at mediation both my lawyer and the other side had their present day values ready…both the same too. I thought I was off to a good start seeing they both agreed on that, but not the case eh.

Insurers love to waste your money and wear you down. If you can make them believe you are crazy enough to take them all the way…it will settle. If over powered–crazy always keeps them off guard.

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They sure do. I can do crazy!

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Good for you Marilyn, don’t give in or give up. Insurance in house lawyers are known to play high roll hands and only after they exhaust all the alternatives of paying next to nothing, they will cave in.
I am in a similar situation, although I have not had a mediation yet but awaiting one. I will certainly not entertain anything less than 50 to 70 cents on the dollar of Present Value. 6 % is a joke, like said above they want to wear you down, discourage you and get you to a position where if they offer you anything slightly higher then you might be more accepting to the new offer.
Good luck and hang in there

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Thank you. Good luck to you as well. I think our lawyers should be negotiating on the phone first and then sit down for some real talks. It would be much cheaper.

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As someone who has done hundreds of these mediations (and 4 in the last 2 weeks), I can attest that results can be all over the place. It is hard to generalize from once case to the next because the issues are different. I cannot speak to your situation, but sometimes what seems like a lowball offer is actually in the zone of being reasonable because of other factors that affect the risk profile of your case. For example, if there is a change that you could win WSIB, then I would expect the insurance to want to lowball in your situation because if you won the WSIB, then they would owe you nothing.

If they believe that you have a good chance of winning WSIB, then it would make sense they would only be willing to pay a small percentage of the overall value. What benefit is there for them to pay a large amount, only to have you win your WSIB? In that case they will have overpaid and the lawyer and claim rep will get in trouble. We had this issue come up in a case this year and the insurance eventually conceded that they risk of my client winning WSIB was low so, they were willing to pay a much higher amount.

In a case like this you need legal advice on the actual chances of success on the WSIB and that risk profile will dictate what is a good or lowball offer. Sometimes, the best thing to do is to wait for the outcome of the WSIB appeal then you will know one way or the other. If you settle the LTD case first, both you and the insurance co are are taking a risk.

Discuss it with your lawyer. It is common to try a mediation because you can never know for sure before you get there what the other sides position will be.

I agree the negotiations leading up to the mediation can be useful, but often this is impractical because it is hard to get the other lawyer and the claims rep to focus on the case. Also, the context of a mediation will cause them to make better offers than you can ever get in a back and forth over the phone, for many reasons that I won’t go into now.

I will end by saying there is a power you take back by walking away from a mediation and I wish more of my clients would do this. They will now know that you are not willing to jump at the first offer and this sets you up going forward as negotiations will continue leading up to the discovery and afterwards.


David Brannen

Disability Lawyer with Resolute Legal

_The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliabile manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team._strong text

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Thank you for your response David. Your explanation makes sense to me as to why they would low ball me while WCB is undecided. I am thinking we went to mediation at their request instead of the scheduled discovery because it made more sense to them cost wise. Perhaps, they just could not cancel discovery so asked for a mediation instead.

You are right that it felt good to walk away from them at mediation on one hand, but on the other hand it was also very discouraging and frustrating. I can wait now for the WCB decision because it is not far off. Hopefully, I will win it but I am not too optimistic about that outcome. The insurer will have to negotiate higher from this point if WCB does not come through I suppose so, in hindsight, I guess I won a little that day.

My lawyer did not try to pressure me into taking the settlement and said he would definitely take my case to court. His feeling too is that we need to get more cases to court but, of course, advises of the risk and potential cost to me should I lose. What a crazy system we have for our most vulnerable against the most powerful.

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It shocked me but I won my WCB case.The Tribunal ruled in my favor noting quite a few reasons they were allowing it. Such a relief. I have already received retroactive pay but need to discuss regular beneifts going forward. I had a heart attack since receiving the news I won my case. I am not sure what happens next with WCB as I have yet to meet with them as I recover. I have a Discovery Hearing set with the work LTD insurance coming up but I guess that will be cancelled. I am not sure what happens next. I am hoping my lawyer will get enough out of LTD to pay themselves. I wish someone, WCB or LTD, would take ownership for causing this heart attack. I am not overweight, eat healthy, do not smoke, not an excessive drinker, mind you there is some family genetics. I feel it was all stress related. It just makes me mad that they can get away with so much.

You will need to review this with your lawyer for your LTD case. Normally LTD gets to directly offset any Workers compensation payments, so if the workers compensation payment is equal to or more than the LTD, then the LTD wouldn’t owe anything.


David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.

Thank you, David. I am pretty sure WCB and LTD would pretty much be the same. WCB is 85% of net and non taxable and LTD is 70% of gross. Just doesn’t seem right that LTD get away with no penalty for treating clients so badly. On the positive side I now have a voice against LTD that I can lend to anyone who needs it or wants to hear it.

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70% taxable that is.

Why would my contingency fee lawyer continue to fight LTD after WCB is ordered to cover? Do lawyers still seek settlement knowing LTD is a 100% offset to WCB? It would mean paying taxes on a settlement I will never get a dime for, in fact, I will have to pay taxes on it. However the lawyer will get his fees and disbursement costs. I know it seems unfair to the lawyer but wouldn’t that agreement end with no cost to client? That is the impression I got from my lawyer when we went to mediation and LTD made a low ball offer because WCB was still on the table. We are now discussing options like reinstatement of LTD but I only have 2 years of that coverage left, for all the good that is. I don’t want to lose my voice for a meaningless ltd coverage. I think I would be better off to pay the lawyer for his fees to date and withdraw my case. He said once in motion you have to go through with the claim to Discovery and/or trial, but my agreement seems to say otherwise. I don’t feel good about this. Any advice would be appreciated. I talked with my lawyer on the phone and sent a message to him addressing all my concerns

I put this in the wrong category initially so this much of this topic is in another space…sorry.

I can’t really answer your specific questions without knowing a lot more facts…that you should not air out on a public forum, but I can say with100% certainty you get to decide what happens with your case. The law societies (which regulate lawyers) are very strict on this. Lawyers work for clients, not the other way around. For example, in Ontario it is mandatory for contingency fee agreements to include a line that says the client makes all major case decisions, not the lawyer. Not all provinces require that to be written in the agreement, but whether its written or not, that is what the law says.

Your lawyers may have very good reasons for recommending the course of action they are recommending; however, at the end of the day all lawyers have a professional and ethical obligation to put the client’s interests above their own.

I have personally lost lots of money having to discontinue cases when it was in my client’s interest to do so. I have also made lots money representing clients in successful cases. This is the nature of contingency fee work. There are always going to be financial losses (from the lawyers perspective).

I am making the above statements in general and am not judging your lawyers, in any way, as they may very well be acting in professional and ethical manner. You should have another sit down with them and discuss your concerns about possible tax liability if there is a retroactive payment of which you don’t see any of it because of the offsets. That scenario is not necessarily going to happen. Your lawyers may be looking to limit your liability for any costs, etc as the insurance company will not always agree to a person dismiss a lawsuit without paying their legal costs. In other cases the insurance companies will agree to dismiss a case without costs. You need to get your lawyers to explain this very clearly to you so you have a handle on what is going on.

You may or may not owe fees or expenses to your lawyer depending on the wording of the agreement you have with them. If it is a contingency agreement, then you should not owe any fees. You may or may not have an obligation to repay them for disbursements they have incurred.

Sorry to hear you have to deal with this stressful situation.


David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.