MEDIATING THE MEDICAL NEGLIGENCE CASE

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1 MEDIATING THE MEDICAL NEGLIGENCE CASE Presented by: John Simpson, Lubbock SPLAWN AND SIMPSON This Paper is Dedicated to DAVID R. COBB State Bar of Texas 10TH ANNUAL ADVANCED MEDICAL MALPRACTICE COURSE March 13-14, 2003 Santa Fe CHAPTER 16

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3 John Simpson, III Born: Tifton, Georgia February 9, 1949 Married: Carolyn Byrd Simpson Children: Corey Byrd Simpson Mary Kendall Simpson Education: Texas Tech University School of Law, JD, 1974 Texas Tech University, BBA, 1971 Bellaire High School, Houston, Texas, 1967 Professional: Admitted to Practice, State Bar of Texas, 1974; United States District Court for the Northern and Western Districts of Texas; United States Court of Appeals, 5th Circuit; United States Court of Claims, District of Columbia Board of Legal Specialization, State Bar of Texas Board Certified, Civil Trial Law, 1981 Board Certified, Personal Injury Trial Law, 1981 Texas Bar Foundation, Life Fellow Litigation Section Council, State Bar of Texas (Chair ) American Board of Trial Advocates (Panhandle/South Plains Chapter President, 1995) Texas Trial Lawyers Association Lubbock County Bar Association, President Lubbock County Young Lawyers Association, President, Community Service: Marian Moss Enterprises, Board of Directors , President 1996 First United Methodist Church, Lubbock, Chairman, Administrative Board Citizens Juvenile Advisory Committee, Board of Directors, Chairman ; 1996 The Lubbock Club, Board of Directors Rotary Cerebral Palsy Center, TTUHSC, Chairman, Advisory Council 1994 Rotary Club of Lubbock, Board of Directors , President South Plains Children's Shelter, Board of Directors Hillcrest Country Club, Board of Directors, President Honors and Awards: Omicron Delta Kappa, Texas Tech University Who's Who in American Colleges and Universities, 1970 Outstanding Young Lawyer, Lubbock County Bar Association, 1980 Kappa Alpha Order, Texas Tech University Kappa Alpha Order Educational Foundation, Board of Trustees Phi Alpha Delta, Texas Tech University School of Law

4 Publications: Discovery Update Litigation Update Institute, State Bar of Texas, San Antonio (2002) Automobile Litigation Update 17 th Annual Litigation Update Institute, State Bar of Texas, San Antonio (2001) It s the Year 2000 and Mediation is Here to Stay, 19 The Advocate, No. 1, p.3 (Spring 2000) Automobile Litigation Update 15 th Annual Litigation Update Institute, State Bar of Texas, San Antonio (1999) Automobile Litigation Update 14 th Annual Litigation Update Institute, State Bar of Texas, Austin (1998) Automobile Litigation 13 th Annual Litigation Update Institute, State Bar of Texas, Austin (1997) Automobile Litigation Update " 12th Annual Litigation Update Institute, State Bar of Texas, Austin (1996) Negotiation: Timing and Tactics Preparing, Trying, and Settling Auto Collision Cases Institute, State Bar of Texas, Dallas and Houston (1996) "Automobile Litigation Update " 11th Annual Litigation Update Institute, State Bar of Texas, San Antonio (1995) "Personal Injury - Supreme Court Review ," 1994 Spring Seminar for Legal Assistants, West Texas Association of Legal Assistants (1994) "Extra-Contractual Claims/Bad Faith," South Plains Claims Association (1993) "Common Litigation Pitfalls, The Plaintiff's Perspective," Texas Association of Defense Counsel (1993) "Professionalism In Personal Injury Practice," All In a Day's Work - IV Seminar, Lubbock County Bar Association (1993) Jury Selection, Plaintiff Perspective, All You Wanted to Know Seminar, Lubbock County Bar Association (1992) "So Your Client Wants to Settle," All In a Day's Work - II Seminar, Lubbock County Bar Association (1991) "Impairment Income Benefits," State Bar of Texas (1991) "Impairment Income Benefits Under the New Workers' Compensation Act," 23 Trial Lawyers Forum, No. 4, p. 27 (1990) "Pattern Jury Charges, Volume 2," State Bar of Texas (1989) "Multiple Specific Injury Recovery," 7 Texas Personal Injury Law Reporter, No. 1, p. 1 (1989) "Trial De Novo," 22 Trial Lawyers Forum, No. 2, p. 39, (1988) "The Lump Sum Rule," 22 Trial Lawyers Forum, No. 3, p. 27 (1988) "Proof of Compensable Injuries," 22 Trial Lawyers Forum, No. 4, p. 49 (1988) "Specific Injuries Revisited," 22 Trial Lawyers Forum, No. 1, p. 27 (1987) "Mary Carter and Other Tools of Settlement," State Bar of Texas, Evaluating and Settling Insurance Claims Institute (1987)

5 TABLE OF CONTENTS I....1 II...1 III....2 IV....2 V...3 Keys to a Successful Mediation...4 Keys to a Lousy Mediation...5 Mediation Survey...6 i

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7 MEDIATING THE MEDICAL NEGLIGENCE CASE Any practitioner who ever anticipates having to handle any type of litigated matter must become familiar with the rules and principles of mediation if he or she is to effectively represent his client in the year 2003 and beyond. Because of the remarkable success that the court system has had with mediation, arbitration and alternative dispute resolution programs, mediation has become and will continue to be an integral part of the civil justice system in this country. I. The authority for referral of cases to alternative dispute resolution and/or mediation is found in the TEXAS CIVIL PRACTICE AND REMEDIES CODE at section , et seq. It is the policy of our court system to encourage the peaceable resolution of disputes and the early settlement of pending litigation. Many jurisdictions have local rules which require that all cases be submitted to ADR or mediation prior to certification as ready for trial. Today we see many more court-ordered mediations than three years ago. Generally speaking, courts of competent jurisdiction have the authority by local rule to refer all cases to alternative dispute resolution or mediation. Section , TEXAS CIVIL PRACTICE AND REMEDIES CODE, authorizes an objection which can be filed by any party within ten days of the referral. Such objection needs to be brought to the attention of the court for appropriate hearing if necessary and any litigant seriously wishing to avoid the mediation process should secure such a hearing and get a ruling on the objection to mediation. There is authority for the proposition that parties who do not submit to alternative dispute resolution when ordered to do so, may face sanctions pursuant to Rule 215, TEXAS RULES OF CIVIL PROCEDURE. All matters revolving around the mediation process including, but not limited to the mediation conference and the negotiations therein, are subject to strict rules of confidentiality. TEXAS CIVIL PRACTICE AND REMEDIES CODE section The parties to a civil suit can be compelled to participate in alternative dispute resolution despite their objections. Decker, et ux vs. Lindsay, 824 S.W.2d 247 (Tex. App. Houston (1 st District) 1992); Hur vs. City of Mesquite, 893 S.W. 2d 227 (Tex. App.-Am. 1995, writ denied). Although parties can be compelled to attend a mediation conference, they cannot be forced to make demands or offers or to settle the case. Decker, et ux vs. Lindsay, supra. A court ordering parties to mediation can set a reasonable fee for the services of an impartial third-party mediator and can tax such fee as cost of court in the suit. TEXAS CIVIL PRACTICE AND REMEDIES CODE section (a) and (b). The courts hold that mediation may be beneficial even if the parties believe it will not resolve the lawsuit. A court 1 cannot force the litigants in a disputed matter to settle their case, but the court can compel them to sit down and talk with each other. The court can empower the mediator with certain authority over the parties but a mediator is not authorized to impose his or her judgment on any of the issues that are in dispute between the parties. TEXAS CIVIL PRACTICE AND REMEDIES CODE section (b). Many mediations end in a settlement and the settlement agreement is reduced to writing. The agreement is usually referred to as a mediation agreement. A court cannot act on a mediation agreement without an appropriate pleading or motion to do so. Martin vs. Black, 909 S.W.2d 192 (Tex. App. Houston (14 th District) 1995, writ filed); Stevens vs. Snyder, 874 S.W.2d 241 (Tex. App. Dallas 1994, writ denied). Matters and material discussed or revealed in a mediation is confidential and not subject to disclosure. TCPRC The section does not use the word privileged. See In Re Learjet Inc. 59 S.W. 3d 842 (Tex. App.-TX org. proceeding). In order for a mediation agreement to be enforceable, it must be in writing as authorized by TEXAS RULES OF CIVIL PROCEDURE, Rule 11. A party has a right to revoke consent to a settlement agreement where the settlement agreement has not been signed or filed as part of the record. Rizk vs. Millard, 810 S.W.2d 318 (Tex. Civ. App. (Houston 14 th District) 1991). The obvious conclusion is that for a mediated settlement agreement to be enforceable as a contract, it must be in writing as authorized by TEXAS RULES OF CIVIL PROCEDURE, Rule 11, and TEXAS CIVIL PRACTICE AND REMEDIES CODE section (a). Hardman vs. Dault, 199 WL (Tex. App. San Antonio 1999); Padilla vs. LaFrance, 907 S.W. 2d 454 (Tex. 1995); In Re Arms, 860 S.W. 2d 590 (Tex. App.-Am. 1993, no writ). II. Just as there are many cases which are very compatible with the mediation process, there are many cases which simply are not compatible with alternative dispute resolution principles and attempts to mediate such cases end up being futile and leaving the parties more frustrated that they were before the mediation process was scheduled. Generally speaking, cases involving claimed damages which are or can be liquidated are more susceptible to the mediation process than those cases which involve claims of vague, intangible, unliquidated damages. In other words, automobile collision cases are more susceptible and compatible with the mediation process than cases involving the partition of a large tract of undeveloped real estate with producing minerals. Case preparation and development must be complete to the point that the lawyers for each side understand the law and the facts of the case before any thoughts of mediation are reasonably entertained.

8 Mediations involving cases which have little or no case development in terms of discovery or investigation are generally not compatible with the mediation process, especially where claims for large damages are sought by the plaintiff and liability is not clearly established. III. Pre-suit or early-suit medical negligence mediations can be successful but the criteria for such success is very specific and limited. Only those cases where liability is certain and the plaintiff s damages are clearly defined are practical for an early-mediation. In any case, where the plaintiff s claims of damage are hundreds and hundreds of thousands of dollars, the mediation is usually an exercise in futility because rarely will a defendant mediate such a case as opposed to simply contacting plaintiff s counsel directly to discuss settlement. The medical cases that do settle at mediation are cases that are well developed and fully discovered according to the Discovery Rules in the TEXAS RULES OF CIVIL PROCEDURE or the FEDERAL RULES OF CIVIL PROCEDURE. In most important cases, it is critical that all expert witnesses concerning liability and/or damages be disclosed prior to the mediation and that reasonable efforts be made to reduce their testimony or their opinions to discoverable form. Most successful mediations occur in instances where a firm trial setting is pending or there is a realistic expectation of a trial setting. IV. Preparation. It is critical that any attorney who plans to conduct a meaningful mediation know the law of his case and/or the facts of his case. Those advocates who succeed in mediation are always well prepared on the issues of fact and the issues of law so that they can discuss with the mediator and the other party in detail on all disputed issues. It is also important that the client generally understand the law and the facts of their case. If the client does not have an appreciation for the fact background or case fact development or for the law of the case, then that client s expectations with regard to the mediation will be unrealistic and this will lead to great frustration for the client. It is critically important in the preparation stage of the mediation that each lawyer have a clear understanding of his or her authority with regard to negotiations. Realistic goals concerning settlement should be formed and agreed upon well in advance of the mediation between the client and counsel. Exchange of Documents. Documentary evidence is the key to success in the courtroom in any civil suit. It is vitally important that all important documents be exchanged between the parties prior to the mediation conference. It is not a good idea to hold back an important piece of evidence in the form of documentation regarding liability or damages. The 2 revelation of such information in a medical negligence causes insecurity on the part of the other party, creates a lack of confidence in their own lawyer, and causes the opposing party to adopt a very defensive position which probably dooms any prospects of reasonable negotiations. It is absolutely critical that any and all expert reports be exchanged in advance of the mediation conference. This is especially true in medical negligence litigation or where the plaintiff s claims involve very, very significant damage claims. Review Prior Settlement Discussions. Many times the parties discuss settlement prior to the convening of a formal mediation conference. It is important that confusion be avoided with regard to a party s settlement position in the case and therefore great pains should be used to review the litigator s file to determine if in fact any settlement demands and/or settlement offers have been exchanged. Define Expectations. Assuming that the litigator is completely familiar with the law of his case and/or the facts of the case, it is important for the litigator to openly discuss with the client or carrier, the client s expectations about the case prior to the mediation conference. The expectations of the client and of the lawyer and carrier should be based upon a firm foundation that is reasonable under the facts of a given case and the law of the case. The Defined Expectation Rule is important in court-ordered mediations because the parties have some belief that the mediation process will be unsuccessful under any circumstances and is doomed from beginning. Although the court cannot force parties to settle their case, the court can compel parties to attend the mediation and it is important that all aspects of the case be discussed with the client prior to the mediation and that there be no confusion between the litigator and the client with regard to the client s expectations. Negotiations. The litigator and his client must be aware of all important issues of fact and law. The litigator must have a complete understanding of the factual and legal basis for the claims of damages and/or defenses against damages. If there are subrogation issues in a given case, these subrogation issues need to be clearly defined as between the litigator, his client and the owner of the subrogation interest. In order to be effective at a mediation, a litigator must be able to articulate his belief in the full value of his or her case. He or she must be able to articulate a reasonable expectation with regard to a jury verdict and integrate such an expectation with the facts of the case and the law of the case. All parties must take a realistic approach in assessing liability. Making such an assessment, the litigator for either side must be alert to all available causes of action, all available defenses, all pending pleas at bar and the practical effect of any prior rulings with regard to procedure and discovery in the case. Because of the large body of law that has developed by

9 way of ART. 4590i, correct assessment of liability, defensive issues and the admissibility of expert testimony is critical to success or failure at trial or mediation. No experienced litigator in Texas can or should ignore the venue of the case. In order to effectively negotiate a case on behalf of a client, a lawyer must be familiar with a verdict history in the venue in question. Since probable results vary greatly from county to county, it is critical that the practitioners know and understand all of the venue issues in a given case. There are as many different negotiating styles and theories as there are lawyers, judges, mediators, claims representatives and clients. Those who are successful in negotiations share one common characteristic and that is that they negotiate with confidence. Confidence comes from the proposition that they know that their case is fully developed, they understand all the issues in their case, and they have a good feeling about how a jury will view their case and their evidence. Unreasonably high demands and unreasonably low offers always indicate that a party is negotiating without much confidence in the above factors and such lack of confidence is generally a very high hurdle to over-come and resolve a case through settlement. The Mediation Impasse. Impasses in negotiations obviously can occur early or late in mediation conference and sometimes impasses develop at the mid-point. Most early mediation impasses result because one party or the other refuses to accept the proposition that they will not prevail completely at the time of trial. Without such a realization, that party perceives no advantage to resolving the case through settlement and is prepared to spend his or her time and money litigating the case because he or she has no fear that the case will end up in a negative verdict. Mediation impasses that arise in the middle of the conference or at the last hour usually involve issues primarily of economics. By mediating for several hours, the parties have already conceded to the proposition that they may not prevail at the time of trial and are willing to compromise with regard to their demands and/or defenses. In such cases, when the parties become restricted in their ideas about the case, it is important and critical that the litigator look to the leadership of the mediator to move the settlement process forward. Parties in medical negligence cases should insist on a mediator with experience in legal medicine and the trial of medical cases if they want to have a chance to resolve the case at mediation. Statistically we know that many, many cases that are not resolved at mediation ultimately do settle. Often times after the adjournment of a mediation and a report to the court that the mediation was unsuccessful, further discovery and/or reflection on all of the issues causes one party or the other to rethink their position and create a desire re-engage for the purposes of discussing settlement. Ideas concerning reconvening are often 3 viewed by a party as dealing from a position of weakness and therefore are reluctant to contact the other side even though they have a legitimate interest in settling the case. This is the perfect opportunity for the parties to use the mediator in a secondary fashion. Most mediators are quite receptive to the idea of being approached by one party or the other concerning settlement of a case even though a previous settlement conference or mediation conference was unsuccessful. Experienced litigators who are genuinely interested in representing the best interest of their client have no hesitation whatsoever in contacting the mediator in a case to call on the mediator s skills and experience to re-engage the parties for serious settlement discussions. V. It is critical that any settlement agreement reached by the parties be reduced to writing. This written agreement should be drafted in terms of a Rule 11 Agreement pursuant to the TEXAS RULES OF CIVIL PROCEDURE and a Rule 13 Agreement or Pleading pursuant to the FEDERAL RULES OF CIVIL PROCEDURE. There should be no contingencies in any mediation agreement. Settlement agreements or mediation agreements that contain the words subject to are probably subject to serious challenge if a suit is brought or a pleading is brought to enforce such an agreement. Written mediation agreements also tend to protect the interest of the lawyers and the integrity of the process. Many times clients on both sides of the docket want to retract their consent to settle a given case after 2 or 3 days of reflection. With proper mediation conference preparation and a realistic discussion about client expectations in advance of the settlement conference, such a decision to change one s mind is rare. But nevertheless the written mediation agreement will allow the parties and the court to be secure in the fact that the litigation is finally concluded saving the parties and the court further expense and delay. Subrogation has become a major issue of late. Medical liens, whether perfected or not, must be addressed in the mediation agreement. Plaintiff s counsel and his staff must make identification of liens a top priority in preparation for the mediation. The best policy is to know the exact amount of the lien, any offsets or discounts available, applicability of attorneys fees under the Common Fund Doctrine and the name and address of the person with authority to negotiate the lien.

10 1. Dedicate adequate time to prepare 2. Know the facts of the case Know the law of the case 3. Know the medicine of the case Know the science of the case 4. Prepare your client (and/or carrier) Facts of case Law of case Medicine of case Science of case Your experts Your opponent s experts 5. Insurance issues Coverage; covered claims Permission to settle clauses Endorsement No Expectations of client or carrier Plaintiffs Defendants Carriers Discuss details and figures KEYS TO A SUCCESSFUL MEDIATION 7. Demands and Offers Stowers Doctrine Ethics opinion SBOT No. 179 (1958) Coverage limits 8. Subrogation 9. Negotiations prior to mediation loose lips sink ships 10. Offer your client a chance to say something at the joint session if it is positive. 4

11 KEYS TO A LOUSY MEDIATION 1. Fail to know your client s first name. 2. Quickly advise all parties in the joint session that you are a great trial lawyer and pass out your firm brochure which chronicles your last ten successful cases (none of which were in the subject venue). 3. Articulate to your opponent that he does not understand the facts or the law of the case so as to inspire lots of confidence in your opponent s client. 4. A. (Plfs.) Be sure to remind everybody, including the claims representative, that your Stower s Demand expires at 4:30 p.m. today! B. (Defs.) Announce to the Plaintiffs that their demand is outrageous and that until they make a reasonable demand, there will be no offers. 5. Be sure to say it s only money or it s always about the money in the opening session. 6. Bring a structured settlement person to the opening session and let them pass out a few cards for promotional purposes. 7. Bring your client and his new spouse to a mediation in a wrongful death case also attended by the parents of your client s deceased spouse whose care is the subject of the case. 8. Advise your opponent and the mediator that your client is very nervous, does not want to go to court and really wants to get this over. 9. Advise your opponent and the mediator that your doctor client is non compos mentis and will not be able to testify at trial. 10. Announce to the group in the joint session that there are only two people in the room that know what the case is worth (you and the mediator) and that your opponent is not one of them. 5

12 CONFIDENTIAL MEDIATION SURVEY Mediation date attorney client Court: Federal State Arbitration Suit not filed Mediation is: Court Ordered Not Court Ordered The defendant(s) insurance limits have been disclosed: Yes No The defendant(s) insurance limits are believed to be: The documented special damages are: Past medical Future medical Other Past earnings Future earnings Experts: Plaintiff disclosed deposed Defendant disclosed deposed Assessment of basic liability (10 = strongest): Assessment of causation (10 = strongest): Realistic, provable damages: less than $50K $500K to $1M $50K to $250K $1M to $2.5M $250K to $500K More than $2.5M My view of full value of this case is: less than $50K $500K to $1M $50K to $250K $1M to $2.5M $250K to $500K More than $2.5M If written permission for settlement is required of your client, do you have permission? My client has realistic expectations about the mediation: Yes No My representative(s) have realistic expectations about the mediation: Yes No My expectations for success at the mediation are: (10 = strongest): Plaintiff s last demand is $ ; withdrawn Yes No Defendant s last offer is $ ; withdrawn Yes No Attorney for Date: You are not required to respond to any or all of the above. Any response you do make will be regarded as highly confidential and will be viewed by the mediator only. 6

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