In scheduled injury cases and in small industrial disability cases it is frequently possible to work out a reasonable settlement without litigation. However, in medium and larger industrial disability cases you will usually need to show that you are ready, willing and able to go to trial and win in order to get a reasonable settlement.
As a practical matter this usually means that you have to have:
A. The necessary causation evidence.
B. An expert medical opinion or opinions on the extent of the injury.
C. Expert vocational opinions, job search evidence, or other persuasive evidence to show the loss of future earning capacity.
D. A lawyer to file the petition, work through the procedural and legal issues, and try the case if necessary.
I will spend the rest of this post talking about what I have found that has led me to this conclusion.
Insurance companies are trying to make a profit. I do not mean this as an insult. Our whole economy is based on the principle that all businesses are trying to make a profit. A company that sells widgets has to charge customers a higher price for a widget than what it costs the company to manufacture a widget. An insurance company has to bring in more in premium dollars than they pay out in benefits dollars or the insurance company is going to go out of business. Therefore, an insurance company is going to pay the minimum amount necessary to resolve the case. Any other approach would be ridiculous from a financial point of view.
(SIDE NOTE: There is a nice aspect about Iowa Workers’ Compensation law that works out well for an injured worker. If the insurance company has accepted the injury, it has a duty to pay the injured worker the minimum amount that the insurance company believes the claim is worth. The payment of this minimum amount by the insurance company does not require the worker to settle his or her claim. Therefore, the worker can accept this minimum payment, and then retain a lawyer to pursue additional benefits. The advantage of this to the worker is that he or she receives 100% of the amount that the insurance company voluntarily pays, and only pays their lawyer a percentage of any additional amounts the lawyer is able to obtain.)
Everyone in the world is too busy. I don’t know about you, but my experience over the last 20 years is that in almost every industry, everyone has been given heavier workloads, and they are expected to work harder and get more done. This same trend has occurred in the insurance industry. Adjusters have heavier and heavier caseloads that they are expected to handle. These heavy caseloads frequently lead to adjusters to err on the side of paying less than the full value of a claim.
A trial date in a week or two has a way of focusing everyone’s attention. Once a work comp petition is filed the insurance company hires a defense lawyer to defend the case. The defense lawyers conduct discovery, assess the case, and make recommendations on case valuation and settlement strategy. However, with most insurance companies the adjuster, sometimes in consultation with a supervisor, makes the actual decision on how much to pay to resolve the claim.
As I mentioned above, the adjusters have very heavy caseloads. An adjuster will frequently be supervising numerous cases that are in litigation, and those cases will have trial dates spread out over time. The nature of the insurance defense business frequently makes it hard to give too much attention to cases where the trial date is still several months off, because there are other cases where the trial date is just weeks away. Therefore, the insurance company frequently does not really have time to focus on your case until the trial date gets fairly close. Additionally, the closeness to the trial date forces everyone involved in the case to fully weigh the risks and benefits of trial versus settlement.
Conclusion. Therefore, I have always found that preparing my cases like I’m going to try them helps lead to the best settlements. Another benefit of thoroughly preparing the case is that if you are not able to settle it on good terms, you are ready to try the case.