Harsinie A. Panditaratne — lawyer and founding member of HP Law LLC — joined our October Risk Control Webinar to discuss mediation and how the process can help settle insurance claims.
Before diving into the presentation, let’s briefly go over what exactly mediation means. Mediation is a process where a neutral third party facilitates negotiations between opposing sides (employer and employee, each with legal representation) to reach a mutually agreeable resolution.
Continue reading for an overview of Panditaratne's presentation.
In 1911, Wisconsin was the first state to pass Workers’ Compensation (WC) laws — and over the next several decades, every other state followed suit. WC statutes are designed to guarantee workers medical and wage loss benefits when they experience an injury or illness on the job.
In straightforward cases, WC laws have several benefits for workers and employers alike, including:
Unfortunately, not all cases are clear-cut. National statistics show that a WC case can go through a rigorous review process to discover, on average, 7%-15% of cases are questionable and denied, said Panditaratne. In states that have permanency benefits, the injured worker can file a petition that entitles them to a lump sum award just for having a permanent injury, even if they never missed a day of work, added Panditaratne.
Mediation typically results in settlement when the parties can find a resolution. According to Panditaratne, settling cases is a risk management decision; it can resolve potential unexpected costs and avoid ongoing claim management, especially when medical expenses and wage loss exposures are rising. Medical costs constitute roughly 40%-60% of claim costs. In some states, wage loss exposure can potentially pay a worker six figures a year, even if they don’t continue to work.
Medicare set-asides and litigation costs are important factors to consider, as they can sometimes cost more than the claim itself. According to Panditaratne, the cost of litigation can range between $15,000 and $30,000, so it’s important to get estimates for both reasonable-case scenarios and worst-case scenarios over the course of 1-3 years.
Panditaratne advised that employers should attend mediation when possible if state law allows it. According to Panditaratne, rational and kind participation is key, and pre-planning with the attorney is essential. No matter how involved an employer is with the litigation, they will need the adjuster’s approval before starting a negotiation or settling a case.
Panditaratne concluded the webinar by highlighting these crucial points:
This presentation was part of Captive Resources’ Risk Control Webinar Series — regular installments of webinars to educate the group captive members we work with on topics like workplace safety, organizational leadership, and company performance. The thoughts and opinions expressed in these webinars are those of the presenters and do not necessarily reflect Captive Resources’ positions on any of the above topics.
