The Art of Claim Resolution in the Time of Pandemic

Near the end of March 2020, when the world went into hiding, litigators in New Jersey, and presumably throughout the country, were faced with several questions as to how their practice was going to be affected by the Coronavirus.  I recall my last in-court hearing taking place before a Judge who anticipated it could be another year before she and I were back in the building.  When you handle dozens of cases at one time, one of the most important aspects of doing so is organization and control over their progression.  All that we could guarantee when the courts and law offices began closing their doors was that we were entering an unprecedented time.

One of the only constants that attorneys were assured of as they moved their offices from their bustling city spaces to their suburban living rooms was that negotiations on the resolutions of claims would always be there.  If someone is willing to open their wallets, there will always be a willing adversary ready to listen.  Considering all that is needed for person to person negotiations is a phone (suit and tie optional), talks on claim resolution can be considered the ultimate socially distanced phase of litigation.  But how would negotiations themselves be impacted by the monumental modifications to case procedure?

Initially, there were multiple trains of thought.  One theory was that Plaintiff’s attorneys would be heard from non-stop as they attempted to resolve their cases, knowing they faced potential multiple-year delays in getting a “real” court date.  Others thought there would be far fewer claims put into suit, as those potential delays could make filing and pursuing an actual lawsuit cost-prohibitive for plaintiff’s attorneys.  I also came across more than one person who believed that agreements on binding arbitration would become the new norm.

What I’ve seen take place over the past six months is tough to categorize, but there does appear to be some acceptable tenets of pandemic negotiations to consider.  First and foremost, if you are dealing with a claim of value in the high six or into seven-figures, not much has changed.  We’ve continued the investigative phases and remote discovery procedures, and the parties understand that if it takes several years to resolve the matter, that is what it will take.  Insurers are not going to receive many “discounts” on the cases that are perceived as high value.  In fact, the high-value claims are the types of cases I’ve been hearing least on from adverse counsel.  They understand they are going to have to wait to get their day in court, and at least for the cases with a potentially significant payday, they are willing to do so.

I also find there to be a difference in negotiations on smaller value claims depending on the case volume of the practice you are dealing with.  For those established firms with many attorneys and hundreds of clients, even soft-tissue injury cases remain business as usual for the most part.  Of course, if you can demonstrate a legitimate basis for resolution early (i.e. saving on the cost to be laid out for an expert, etc.), even the bigger firms will listen and look to resolve cases if it makes sense to do so.  On the other hand, smaller firms have clearly become more “reasonable” in their expectations and bottom-lines.  This change did not present itself immediately- I believe it took some time for these attorneys to explain the circumstances to their clients in an effort to adjust their expectations.  Nevertheless, these days there is a clear push for early resolution of the low-value claims brought by small-firm attorneys.  In fact, I’m receiving calls from these adversaries very early on in cases, and the emphasis is nearly universally on trying to resolve the cases as early as possible.  I believe a material indemnity savings has been realized by insurers on the smaller value claims brought by small firms against their insureds over the past six months because of the plaintiffs’ attorney’s desire to resolve early.

I also see an increased desire for early mediation.  While I’ve yet to see an uptick in requests for binding arbitration (outside of the UM/UIM spectrum), once the discovery phase has concluded or reached substantial completion, the parties are more enthusiastic in attempting resolution through mediation than they have been in the past.  Perhaps this is because as these proceedings have gone remote, the cost of mediation has gone down and become, perhaps, more palatable to the ones writing the check to the mediators.  I also believe the mediator’s job has become easier, as it is a powerful message to be able to look at a litigant through the remote connection screen and emphasize how much easier for all it would be to resolve claims in lieu of protracted litigation in a worldwide pandemic.

Finally, one of the benefits of litigating claims in the time of pandemic has been the inability of attorneys to “hide” in the courtroom.  I would conservatively estimate at least half of my calls to adversary counsel in the past have resulted in a response by their assistants that so and so is in court.  Now, my opposing counsel is more frequently forced to take my call.  I can’t count how many times an attorney has been able to keep from giving me a demand simply by using the courtroom excuse.  It is much easier for me to track them down now and, in turn, the nowhere to hide benefit has fostered more person-to-person communication which has always led to quicker claim resolution in my experience.

In sum, I believe that the pandemic has led to more claim resolution in this calendar year than there has been in previous years- though the end-of-year numbers will show whether I am right or not.  The high-value cases aren’t resolving any quicker than usual (unless there is a legitimate commitment on the part of all parties to make meaningful progress towards resolution), and this isn’t much of a surprise considering they involve life-changing amounts of money.  Yet what has clearly increased is person-to-person contact, and where there are actual conversations between counsel, there’s often the potential for clear communication of party expectation.  And, commonly, claim resolution.