Avoid It With Data and Negotiation Skills
While recently evaluating customer data, Casentric discovered that on average, it takes less than 14 minutes, in two negotiation phone calls, before a plaintiff’s lawyer decides to proceed to litigation in a bodily injury case! Here’s how data and negotiation skills can stop litigation and the associated costs.
Time Flies 14 minutes goes by quickly. Consider that claims adjusters typically invest hours into the intake, investigation, review and preparation of an evaluation of bodily injury cases prior to the first pre-litigation negotiation session. All that time might as well be flushed with such a limited window to gain control over the negotiation with an outcome in the insurer’s favor. Basically, every second counts and adjusters need to be prepared.
Litigation costs an insurer money. Once litigation is underway, no amount of blaming the plaintiff’s counsel, increasing settlement values or managing defense counsel more aggressively will lead to better outcomes. If driving better outcomes and keeping costs at a minimum is your goal, the only way to get there is to conduct high quality, accurate, detail rich pre-litigation negotiations. And it’s not complicated, it’s just about the facts.
What Causes So Much Litigation?
Our data shows three principal issues that lead to litigation:
Lack of facts and data
– Claims adjusters are short on time and are forced to focus entirely on high level items while avoiding the details. Failing to address details means adjusters are unprepared for negotiation challenges, have difficulty proving points, and their bluff is easily called. Attorneys count on this.
Lack of process
– Adjusters don’t follow a consistent approach or consider the steps they will take after they enter into a negotiation. By default, adjusters make the negotiation about the number, but don’t create a simple plan with the evidence and arguments to back it up.
Lack of an offer structure
– Adjusters tend to present a “story,” their interpretation of the events relating to the injury, before presenting their offer. Stories fail to identify to the plaintiff’s lawyer the most problematic part of the case. Is it the hospital bill? Chiropractic bill? Pain and suffering? Without this structure and clarity, the negotiation is off to a cloudy start with little understanding of the basis for the parties to reach agreement. Stories are unnecessary when data, structure and evidence exist.
Negotiations lacking data and evidence resolve without litigation only when the settlement amount meets or exceeds the attorney’s expectations, meaning the claim has been overvalued. Where a plaintiff’s expectations on value are different, the case will proceed to litigation—or require significant re-adjustment to avoid litigation.
Plaintiffs’ attorneys have learned that filing suit is productive. Ironically, we find that they are not well versed in the facts, either, but are simply taking advantage of the adjuster’s unpreparedness. Avoiding the facts suits them well!
Negotiation = Successful Claims Resolution
Adjusters spend hours preparing a case, why not capitalize on their work in negotiations to achieve successful resolution? Done properly, negotiation is the best path for shifting the balance to the insurer.
Adjusters only need three items to shift negotiation leverage in their favor, avoid litigation and contain settlement costs: 1) data, 2) a logical negotiation process, and 3) a fact-based settlement offer. When adjusters present an offer based on a detailed assessment of the evidence and arguments applicable to such evidence, adjusters retain a firm command of the session and call a plaintiff’s lawyer’s bluff.
Avoiding litigation saves the insurer money. Our research shows savings between 20-30% on average, and even greater in some cases.
Casentric is passionate about exposing this plaintiff attorney’s tactic, decreasing litigation, and helping insurers accurately evaluate and resolve third party claims using data and negotiation. Casentric’s CaseXpert® Injury Support™ program, together with our proprietary software application, CaseXpert®, has delivered results for our customers for over three years. Please feel free to call us for more information.
We’d welcome your comments or inquiries on this important topic.
Jim Kaiser, CEO Steve Washington, COO