ADR in the Circuit Court for Baltimore City T H E M E D I A T I O N A N D S E T T L E M E N T C O N F E R E N C E P R O G R A M S Issue 6 April 2014 Mediation Survey Set to Begin Our Circuit Court s website reports the goal of the Circuit Court for Baltimore City to provide meaningful access to the justice system by the timely, efficient, and fair processing of all cases. The Civil Division, specifically, intends to process cases efficiently and provide an orderly forum for the prompt resolution of disputes. We are eager to learn how our Alternative Dispute Resolution (ADR) programs assist in these efforts and can be improved to help serve Maryland citizens in civil cases. A Maryland judicial research project is now underway, with Salisbury University, that will help us address whether and how our courts have met parties needs for dispute resolution. Mediators, parties, and counsel will be surveyed and encouraged to provide thoughtful survey responses. This Court will not have access to survey responses, although participation and rates of response will be monitored for mediators, parties and attorneys. If and when you are invited to participate, your survey responses are vital to the research effort. I am both anxious and very grateful for your cooperation. Please let me or ADR Program Director Ronna Jablow know if you have any questions or concerns. Hon. Pamela J. White ADR Supervisory Judge Inside this issue: MEDIATION UPDATE 1 PRETRIAL SETTLEMENT CONFERENCE PROGRAM UPDATE DAUNTING DISPUTES: TIPS FOR MEDIATING SMALL-DOLLAR PERSONAL INJURY DISPUTES MEDICARE REIMBURSEMENT IN PERSONAL INJURY SETTLEMENTS RESPONDING TO CLAIMS OF LIMITED AUTHORITY IN COURT-ORDERED SETTLEMENT CONFERENCES UPCOMING ADR EVENTS 6 2 3 4 5 Mediation Update Thank you to all of our mediators who have completed the Mediator Background Survey as part of the Maryland ADR Statewide Research Project. As a reminder for those who have not yet completed the short mediator survey, it is available online at http:// mediatorbackground.questionpro.com and should take no more than five minutes of your time. We are looking forward to the new evaluation forms that will soon be sent to the Court s mediators. The evaluations, which will be completed by all participants in mediation, including the attorneys and parties, will provide a wealth of feedback which we will use to improve the quality of our program. Immediately after a mediation session, the mediator will complete a Mediation Report that will replace the current ADR Datasheet. Additionally, mediators will distribute evaluation forms to the participants and return all completed forms to the Mediation Office. Contact us: Please consider contributing an ADR related article or announcement for our next issue. Ronna.Jablow@mdcourts.gov Phone: 410.396.7374 (...Continued on Page 2...)
Mediation Update (cont.) On the last page of the Newsletter, we have listed some upcoming advanced mediation education opportunities. For instructors of mediation programs, we have established the following guidelines for continuing education credit: Presenters get credit for instruction at the advanced training and should complete one other mediation advanced training, of any length, such as a webinar, (tele)conference, seminar, or workshop. Repeat presentations will not be credited. Thank you for all the work that you do for the Court. If you have any concerns or questions, or just want to share an interesting mediation experience, please feel free to contact Ronna Jablow at 410.396.7374 or ronna.jablow@mdcourts.gov.) Pretrial Settlement Conference Program Update THE PRETRIAL SETTLEMENT CONFERENCE PROGRAM HAS MADE IMPROVEMENTS OVER THE LAST 18 MONTHS AND SETTLEMENT RATES ARE ON THE RISE. The Pretrial Settlement Conference Program has made improvements over the last 18 months and settlement rates are on the rise. More importantly, however, settlement discussions are more substantive and meaningful even if the dispute does not settle at the pretrial conference. Most attorneys who regularly practice in this Court realize that pretrial settlement conferences present a serious and potentially beneficial opportunity to discuss and consider settlement options. More changes are on the way and will be announced in future editions of this newsletter and elsewhere. One recent change concerns Settlement Orders that are completed and executed at pretrial conferences. Orders need to be clearly written and follow the pre-printed language in the form document. Here are the important changes: 1. Print the case name and case number clearly. 2. Indicate whether the settlement is full or partial (a settlement is not full if there are any parties that have not (a) signed the settlement order or (b) been previously dismissed from the case). 3. Indicate who will pay open costs. 4. The pre-printed language on the Order is not to be altered however, language such as subject to the terms and conditions of the parties or something similar may be added. 5. Print the names of all parties and attorneys below their signatures (parties are to sign the Order). To all of the practitioners who assist us in pretrial conferences, thank you for your cooperation and your continued assistance. Please contact Jeff Trueman (410-396-7374 or jeff.trueman@mdcourts.gov) if you have any ideas about how to improve the program. Page 2
Daunting Disputes: Tips for Mediating Small-Dollar Personal Injury Disputes Jeff Trueman, Esq. Small-dollar personal injury disputes can be difficult to settle. The smaller the amount in dispute, the more attached parties can be to their positions, which makes compromise all the more laborious. Here are a few tips that might bring about some movement between the parties: * The neutral can present contrary points of view or reality checks to the parties which challenge the legal theories or expectations of each side without evaluating the merits of the case. Hypothetical questions can be effective in this regard. For example, is the plaintiff over-valuing their injuries? Did the plaintiff get an award of some sort already, e.g., a worker s compensation award or personal injury protection (PIP)? Is the defendant putting too much stock in assumption of risk or contributory negligence? * The plaintiff may not understand how an institution or insurance company evaluates a case. The neutral has to explain this in plain language while justifying the plaintiff s understandable feelings of aggravation and, in some cases, need for retribution. Even so, the plaintiff may not be willing to settle the case immediately. After some reflection, and maybe a slightly better offer from the other side, the case may settle. * As the neutral, ask each side to give you something to make the other side move in other words, ask them to articulate their strong points and their opponent s weaknesses. In these types of disputes, the facts, not the law, drive the discussions and will ultimately influence a judge or jury. Thus, ask for the strongest facts not opinions that will have the greatest effect on why each side should move. Remember, real progress is not measured by how far each side moves from where they started, but how far they move toward a number that has a good chance of settling the dispute. * Zero-offers from the defense may present an opportunity to try a technique called bracketing. Granted, some zero offers are truly that nothing, no matter what, will be offered by the defense. But sometimes, zero offers are intended to send a signal to the plaintiff that a demand is unreasonable. If that s the case, ask the defense if they would consider making a small offer if the other side makes a significant drop. * Both parties need to understand why it s important to consider settlement over litigation. Finality and reduction of risk are important factors that need to be highlighted since most people have little experience with litigation and may not fully appreciate the risks involved or the limitations of the process. For example, the rules of evidence can preclude certain facts from consideration; what s true in real life may not be true in court. Furthermore, no one can predict how members of a jury will respond to the court, the lawyers, or the parties. Under normal circumstances, people don t address, much less persuade complete strangers. People tend to filter information according to their own sense of right and wrong and it is exceedingly difficult, if not impossible, to move someone outside of their zone of pre-existing values and understanding. Do the parties truly feel it is in their best interest to empower someone whose values and opinions are unknown with the authority to impose a solution? REAL PROGRESS IS NOT MEASURED BY HOW FAR EACH SIDE MOVES FROM WHERE THEY STARTED, BUT HOW FAR THEY MOVE TOWARD A NUMBER THAT HAS A GOOD CHANCE OF SETTLING THE DISPUTE. (...Continued on Page 6...) Page 3
Medicare Reimbursement in Personal Injury Settlements Jason Rubinstein, Civil ADR Extern THE U.S SUPREME COURT HAS HELD THAT THE MEDICAID AGENCY HAS THE RIGHT TO BE REIMBURSED FOR EXPENSES IT PAID TO THE INJURED PARTY, PENDING SETTLEMENT NEGOTIATIONS. Medicare liens are heavily involved in personal injury settlements and they can play a vital role at the negotiation table. The U.S Supreme Court has held that the Medicaid Agency has the right to be reimbursed for expenses it paid to the injured party, pending settlement negotiations. See U.S Supreme Court Restricts Medicaid s Right to Put a Lien Against Personal Injury Settlement, (April 2013), available at http://koldin.com/blog/u-ssupreme-court-restricts-medicaids-right-to-put-a-lien-against-personal-injury-settlement/. Medicare-eligible recipients of personal injury settlements risk losing their settlement awards to satisfy existing Medicare liens and to pay for future Medicare expenses that would otherwise be covered by their provider. For instance, if the Medicare provider does not feel that that the allocation of funds from the settlement is sufficient to cover the future costs of the medical injury, it may refuse to pay for services related to the worker s compensation injury. Uncertainty in the cost of Medicare liens poses a massive burden on the attorney and the client in reaching a sufficient settlement that assures all parties are adequately compensated. The Medicare Secondary Payer (MSP) statute grants the Center for Medicare and Medicaid Services (CMS) the right to recoup its conditional payments from an attorney, State agency, or private insurer that has received a third party payment. See Norma S. Schmidt, The King Kong Contingent: Should the Medicare Secondary Payer Statute Reach to Future Medical Expenses in Personal Injury Settlements? 68 U. Pitt. L. Rev. 469-482 (2006). However, the MSP does not require Medicare to adjust its lien according to the intended allocation of a settlement award. The statute has also failed to enforce timely reporting as to amounts owed to the Medicare provider, prior to settlement negotiations. While the Medicaid recipient has an opportunity to contest the lien amount by producing evidence that the total lien exceeds the amount recoverable for medical expenses, this process can be burdensome and does not ensure a reduction in the lien. As of January 2013, Congress has enacted the Strengthening Medicare and Repaying Taxpayers, or SMART Act to remedy the administrative delays that impede settlements in personal injury cases. Since many claims involving Medicare cannot settle because parties are unable to determine their respective obligations to reimburse the federal government, this Act attempts to correct the problem by creating a requirement for the federal government to provide the amount due within 65 days after a request from the settling parties. This should enable attorneys to determine the amount owed in Medicare liens, prior to the settlement. However, this Act will also impose deadlines attorneys must comply with for reporting settlement amounts and for disputing Medicare reimbursement claims. Attorneys should familiarize themselves with the stipulations of this Act in order to optimize their settlements. By providing the attorney with the Medicare conditional payments before settlement, this law signifies an important step forward in reaching productive and successful settlement negotiations. The interim rule designated to implement the Act is currently receiving comments. See How to Handle Medicare Liens on Personal Injury Cases, (January 2013), available at http://www.saintlouislegal.com/medicare-liens-how-to-handle-in-2013-and-beyond/. More information about the Act can be found at: http://www.saintlouislegal.com/medicareliens-how-to-handle-in-2013-and-beyond/. A self-study course is also available at http:// www.mylawcle.com/product/getting-smart-with-the-smart-act/. Page 4
Responding to Claims of Limited Authority in Court- Ordered Settlement Conferences Matthew Kuspa, Civil ADR Extern In Maryland, each circuit court has authority to require the parties and their attorneys to participate in a non-fee-for-service settlement conference. Md. Rule 17-202. A common stumbling block which impedes progress in Court-ordered settlement conferences arises when a party engages in a tactic known as limited authority. Limited authority problems arise when negotiators, acting as representatives of ultimate decisionmakers, attend settlement conferences without the ability to pay up to the full amount of the claim (or the related insurance policy). Don Peters, Just Say No: Minimizing Limited Authority Negotiating in Court-Mandated Mediation, 8 Pepp. Disp. Resol. L.J. 273 (2008). Negotiators can use the tactic of limited authority to influence, delay, and prevent agreements. Id. In Maryland Circuit Courts, a Court may include in each scheduling order a requirement that individuals with authority to settle be present or readily available for consultation during the alternative dispute resolution proceeding. Md. Rule 2-504. This rule mirrors statutes in other jurisdictions which require attendance by fully authorized representatives. Peters, supra at 280. The Court of Special Appeals addressed the issue of a circuit court s authority to enforce a scheduling order against a party who fails to comply with the order in Station Maintenance Solutions, Inc. v. Two Farms, Inc., 209 Md. App. 464, 60 A.3d 72 (2013). In this case, Defendant s insurance company failed to send a senior officer or employee with binding settlement authority up to the full limits of its policy, as required by the Court s scheduling order. Id. at 469. The Court of Special Appeals found that under Maryland case law, the imposition of sanctions for violation of a scheduling order is generally appropriate. Id. at 476, citing Manzanov. S. Md. Hosp., 347 Md. 17, 29, 698 A.2d 531 (1997). The Court concluded that the circuit court lacked authority to impose sanctions against the Defendant for the failings of Defendant s insurance company, Mid Continent, because authority to sanction is grounded in the belief that a party will comply with the order in order to avoid imposition of a penalty against it. Id. at 488. Nonetheless, there were several courses of action, of varying degrees of severity, available to the circuit court to address Mid Continent's alleged violation of the scheduling order. Id. at 489. These included postponing the settlement conference, scheduling a hearing to afford the insurer the chance to explain the alleged violation, and, where the underlying scheduling order is valid, the circuit court could proceed under Maryland Rule 15 205 or 15 206 to sanction an insurer for constructive criminal or civil contempt for violation of the order. Id. IN MARYLAND CIRCUIT COURTS, A COURT MAY INCLUDE IN EACH SCHEDULING ORDER A REQUIREMENT THAT INDIVIDUALS WITH AUTHORITY TO SETTLE BE PRESENT OR READILY AVAILABLE FOR CONSULTATION DURING THE ALTERNATIVE DISPUTE RESOLUTION PROCEEDING. MD. RULE 2-504. This case illustrates the importance of Rule 2-504, which was created to expedite and control the orderly flow of civil litigation[.] Id. at 476, citing Tobin v. Marriott Hotels, 111 Md. App. 566, 572, 683 A.2d 784 (1996). It is important to the judicial process that parties comply with scheduling orders and attend the pretrial settlement conference. Attendance by fully authorized representatives, or their ready availability, helps ensure that the pretrial settlement conference is productive. Page 5
ADR in the Circuit Court for Baltimore City T H E M E D I A T I O N A N D S E T T L E M E N T C O N F E R E N C E P R O G R A M S Circuit Court for Baltimore City 111 North Calvert Street Courthouse East, Room 248 Baltimore, MD 21202 Phone: 410-396-7374 Fax: 410-396-7378 E-mail: ronna.jablow@mdcourts.gov jeff.trueman@mdcourts.gov Upcoming ADR Events MSBA ADR Spring Event: Powerful Non-Defensive Communication April 23, 2014, 9:00am - 5:00pm Hilton Baltimore BWI Hotel, Linthicum Heights, MD. https://www.msba.org/calendar/flyers/0414/adrspring042314a.pdf Managing Conflict and Removing Barriers to Collaborative Decision Making June 25th - 27th, 2014 Martin s Crosswinds, 7400 Greenway Center Drive, Greenbelt, MD http://www.natlctr4adr.org/events.html How We Think: Cognitive Barriers to Conflict Resolution 2014 May 21/September 12, 2014, 8:30am - 12:45pm Northern Virginia Mediation Service, Fairfax, VA. http://www.nvms.us/advanced-practice/how-we-think-cognitive-barriers-to-conflictresolution.html Mediating Complex and Multiparty Civil Cases July 25/September 19, 2014, 8:30am - 5:30pm Northern Virginia Mediation Service, Fairfax, VA http://www.nvms.us/advanced-practice/mediating-complex-and-multiparty-civilcases.html Mediating Small-Dollar Personal Injury Disputes (cont.) Despite all of the time and effort invested by the neutral, there may not be enough offered or a loss at trial may not be detrimental. The parties may want to have their day in court. Still, because so many cases settle before trial, the dynamic between the parties is fluid. Maybe a follow-up phone call can help bring the parties closer to resolution. What is your experience? We re always interested in what our readers have to say. Please contact us with any tips you would be willing to share. Civil ADR Office 410-396- 7473; fax 410-396-7378, email jeff.trueman@mdcourts.gov. Page 6