You know the case should settle. Why won’t the other side agree to your offer?

Teddy Snyder

Here are some tips for creating the perfect offer. I’m going to refer to both offers and demands as offers to settle in this article.

When

As long as you’ve done your homework, there’s no bad time to make an offer. Professionals on both sides of the table have been evaluating the case since it started. The attorney for the plaintiff/claimant made a judgment call about whether to accept the case. The defense set up reserves based on early information. The unique facts of the case will determine how much investigation is needed to put an offer on the table.

No one wants to bid too high or too low. Evaluation is an ongoing process. The mark of an expert litigator is knowing when to stop investigating.

You don’t need to look under every rock. For example, if you have the experts’ reports, depositions may be an unnecessary expense.

You don’t need to wait for a demand. Making an offer without a demand shows you are serious about settlement. This also creates an anchor, i.e., you are defining your evaluation range. The offer should be realistic but at your outer limit. Putting an offer on the table may prompt your negotiating opponent to take a second — or first — look. 

Don’t ignore an offer to settle. Nor should your kneejerk reaction be immediate rejection. Ask questions about how this number was calculated. Have you missed something? Have they? Don’t drop the negotiation ball. Look at the offer as an opening to constructive communication. A mediator can facilitate this process.

Who

Early on, the adjuster may be best positioned to make an offer. Once an attorney is on board, the attorney speaks for the adjuster. But even later in the proceedings, the adjuster may be the best person to make the offer. This can happen when an attorney senses her opposite number harbors a personal animosity. Similarly, some claimants refuse to negotiate directly with their adjuster, particularly if there is a long, contentious history.

When adjusters attend mediation, they often take an active role in the negotiation. In rare situations, particularly in commercial cases, the parties can negotiate with each other directly. Direct negotiation like this may work best under the watchful eye of the mediator, but away from the attorneys.

What

The perfect offer will reflect the evaluation effort that went into creating it. Just as in grade school math, show your work. Avoid round numbers — at least initially. In most cases, the evaluator is considering actual down-to-the-penny bills. The offer should show how they were taken into account, even if a round number ultimately settles the case.

As you close in on a deal, be sure to cover all the deal points. Remember everything you know about the restatement of contracts. There needs to be an ironclad offer and acceptance to finalize the agreement and foreclose later attacks. Make sure the deal you struck can be enforced in court if something goes awry.

How

Negotiations are often oral. If you encounter difficulties getting your opponent’s attention or you suspect opposing counsel is not conveying your offers to the client, a written offer is best.

Confirm oral offers in writing. The strongest offers are more than an amount. Include a date by which payment will be made. Does the deal include any other consideration? Once you think you have an agreement in principle, confirm particulars such as how liens, costs and fees will be handled. Identify exactly all the parties doing the releasing and all the parties/entities being released. What is the nature of the release? With prejudice, without prejudice, stipulation?

Perfection

Your first offer is unlikely to be the perfect formulation of combined factors that everyone can agree on. Keep making offers of settlement as the matter progresses and keep an eye on the midpoint between offers and demands. Close when the zone of difference becomes negligible.

Voilá: perfection.

Attorney Teddy Snyder mediates workers' compensation cases throughout California. She can be contacted through snydermediations.com.