Don’t ask for a demand. That’s one recommendation from Ed Hochuli, a National Football League referee and partner with Jones, Skelton & Hochuli, who offered tips on settlement negotiation do’s and don’ts in an interview with Claims Journal during the Combined Claims Conference held in Orange County, Calif., earlier this month.
The Arizona law partner said that his experiences on the field as an NFL referee aid his case negotiations off the field.
The repeated experience of negotiating with coaches during each game allows him to learn via trial and error. In addition, decisions must be made quickly much like the time pressures related to litigation.
Hochuli said a big mistake he sees during settlement negotiations is when one party draws a line in the sand.
“The huge mistake that I see folks make is the line in the sand…not going to pay a penny more than this,” Hochuli said.
He said threats during negotiations are dangerous, especially if an adjuster doesn’t stick with them.
“Now I know I can do whatever I want with this person, nothing that they say is meaningful anymore,” Hochuli said.
A bigger problem, he said, is asking for a demand which is considered an industry standard practice. Instead, he said insurers should make the first move by extending a settlement offer.
“We know what claims are worth. We have a lot better idea of what they’re worth than what a plaintiff or a claimant thinks they’re worth,” said Hochuli.
Rather, he said, if an insurer makes a reasonable first offer with room to move, it sets the parameters and the range for settlement negotiations. Claimants are less likely to get stuck on a particular figure they want as settlement. As a result, he said, there is a better chance for insurers to settle claims for reasonable amounts.
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