Personal injury verdicts are on the rise in Connecticut. In 2022, a Connecticut jury awarded a family $100 million – the highest personal injury verdict in state history – after a 1,300-pound cube of lighting equipment fell on a warehouse worker, rendering him paraplegic. This year, a 22-year-old Connecticut man was awarded $45 million after he was permanently paralyzed in a motorcycle accident, in which an illegally parked tow truck blocked the sightlines for him and another driver. Other Connecticut juries have recently awarded personal injury verdicts extending into the tens of millions of dollars, particularly in cases involving corporate defendants. Given the current environment, defendants must act strategically to limit their risk. Below are some approaches that have proven to be effective in reducing exposure for our defense clients.
Alternative Dispute Resolution
Depending on the circumstances of a case, we often advise our clients to explore alternative dispute resolution (ADR), which includes private mediation and private arbitration. For a dispute to be resolved via ADR, both sides must agree to it, but as mediation and arbitration each offer certain advantages for both the defendant and the plaintiff, they are commonly used in personal injury disputes. In many situations, the use of ADR has allowed our clients to significantly curtail their exposure.
This article focuses on private mediation and arbitration. However, the judicial branch also offers alternative dispute resolution assistance, including mediation and arbitration, which take place with a sitting judge.
Mediation
Mediation is a non-binding process in which both sides choose a neutral third party – typically an attorney or retired judge – to guide negotiations between the two parties and their attorneys. The mediator does not render a decision but uses proven techniques to help guide both sides to an agreement. Mediation is less formal than arbitration or trial, and either party can walk away from the proceedings at any time.
If either party is unreasonable in their demands or offer, mediation may be the more reasonable path. A mediator listens to both sides and pokes holes in the positions that the parties are taking. The objective point of view of an informed, neutral party may help to close the gap in settlement discussions. The mediator’s guidance may persuade the parties to reconsider their position and try to reach a settlement rather than rolling the dice with a jury.
In mediation, both parties have some control over the outcome, which many plaintiffs and defendants find preferable compared to the unknown verdict at the end of a trial. And when it is successful, mediation is a relatively quick, inexpensive way to resolve a dispute. However, if the parties fail to reach an agreement, both sides would have invested time and money with nothing to show for it.
Arbitration
More formal than mediation, arbitration is a quasi-judicial proceeding before a neutral third party, who is typically a lawyer or retired judge. As with mediation, both sides must agree on the arbitrator, but unlike mediation, the arbitrator will render a decision. Arbitration can be binding or non-binding; with non-binding arbitration, a party dissatisfied with the outcome can reject the decision and advance the case toward trial. But with binding arbitration, the arbitrator renders a legally enforceable decision – including the damages to be paid, if applicable – to which the parties must abide.
In personal injury cases, both sides often agree to resolve their dispute using a type of arbitration known as high-low arbitration, in which the potential award must fall somewhere between a high and low figure agreed upon in advance. This method limits the upside and downside exposure for both parties, providing a measure of predictability. From a plaintiff’s point of view, the floor is higher than that of a trial – where it would be $0, if they were unsuccessful in making their case – and for the defendant, the ceiling is generally much lower than a potential jury verdict.
Additionally, arbitration is typically less time consuming and costly than a trial. And unlike with a trial, the outcome in binding arbitration is final, eliminating the possibility of costly appeals that could drag on for years.
Factors That Determine the Appropriateness of ADR
After reviewing the facts related to injuries and liability in a case, we may recommend that our defense clients consider mediation or arbitration. To determine if ADR is an effective strategy, we look at several factors, including the nature of the plaintiff’s injuries and potential damages, which may include economic, non-economic, and punitive damages. Economic damages refer to quantifiable losses, such as lost wages or medical bills, while non-economic damages denote less tangible losses, such as pain and suffering and loss of enjoyment of life. Non-economic damages are subjective and difficult to quantify. Depending on the situation, a jury may also award punitive damages, which are intended to punish the defendant for reckless behavior or intentional wrongdoing.
When losses are largely economic, a potential jury award would be more predictable, so defendants might want to take their chances with a trial. But when future non-economic damages come into play, there’s greater exposure. Say a 30-year-old individual suffers 50% impairment to his leg as a result of the defendant’s alleged negligence. Since the plaintiff would have to live with that deficit for decades to come, a sympathetic jury might potentially award the individual millions of dollars.
Because the use of mediation or arbitration to resolve personal injury cases is voluntary, the reasonableness of the other party is an important factor in whether ADR is a viable avenue to pursue. However, when the parties are agreeable, mediation and arbitration have significant upsides.
Based in Westport, Conn., FLB Law partners Thomas P. Lambert and Matthias Sportini represent clients in litigation and transactional matters. They can be reached at lambert@flb.law and sportini@flb.law or 203.635.2200.
