Discerning bluster from good argument

Discerning bluster from good argument

When you have a legitimate claim you may nevertheless find that the defendant or paying party finds reasons why your claim should not be paid. If they would rather keep the money rather than give it to you, there is always some argument (good or bad) to justify them in doing so.

But how do you know whether your opponent’s stance is mere bluster, designed to wear you down into submission, or valid argument?

I began pondering this question when a loss adjuster to the insurance sector posted on this forum an article under the heading “standing up to the playground bully”.

Straight away, the author was resorting to emotive language to paint his client as the victim and his role as the side standing up for good, against bad.

The article bemoaned the fact that a Claimant was litigating claims rather than entering into “an amicable, negotiated settlement”. The author suggested that the Claimant has previously only achieved a 20% recovery rate. It described involving lawyers and litigation as “aggressive”.

Now it may be - and this is just a guess here - that a previous 20% recovery, if that was the figure, might have been thanks to people like this loss adjuster refusing to pay claims in full. A failure to enter into settlement was painted as the reason for a low recovery rate, but presumably it is a defendant’s refusal to pay that causes a low recovery rate.

It is baffling why the adjuster has no problem with his client being represented by 'experts' but thinks that a claimant who seeks expert advice and assistance from his lawyers is being "aggressive". Talk about double standards. Parties are perfectly entitled to seek representation when their claim is met with arguments in reply, and we should do nothing to discourage that in a society founded on freedom and justice.

I would also question whether litigation is necessarily the “aggressive” approach the author calls it. If the adjuster refuses to pay more than 20% of losses (or whatever the discounted figure might be), what alternative does a Claimant have other than to litigate? The aggressive approach might be to follow every complaints process going, or phone or email daily badgering for payment. Truth is, a law abiding and professional entity faced with an adjuster refusing to pay, or refusing to pay the right amount, has only litigation as recourse where a defendant refuses to pay without it. It is possible to go to the Court in sorrow rather than anger, as I believe most litigants do.

The choice the adjuster presented to the claimant was a false one. It was not a choice between aggression or a nice amicable settlement. Put in such a way, one would think any nice person would take the latter. But of course the real choice in the real world when an adjuster offers you merely 20% of the loss is accept what you might consider to be a massive under-settlement, and bear 80% of the loss yourself, with the wrongdoer escaping the true extent of his liability, or ask a judge to make an award for the full amount (or whatever the Court considers to be the proper amount, taking all relevant circumstances into account). I have faith in the justice system, and would not call anyone who refuses to be bullied into accepting a discounted settlement, aggressive. 

The article went on to complain that litigation would “increase substantially” the costs to insurers. But was this again the antagoniser playing the victim? In litigation in England there is a concept that the loser pays. There are mechanisms, under Part 36 of the Civil Procedure Rules (‘CPR’), which govern Court process in England, to ensure that if a defendant makes an offer which the Claimant does not beat at trial, the defendant will not have to pay the Claimant’s costs following the expiry of a 21 day period from making the offer. So if this adjuster is sure that his position is the right one, the insurer will not pay the costs. They will only pay the costs of Court proceedings, in addition to damages, if they have got it wrong. If the adjuster has well advised his insurer clients, and if they have made an adequate offer before proceedings, they have nothing to fear. Using the 20% figure in the article, if the defendant has offered to pay that 20% before proceedings and the Claimant wins only 15% at trial, the matter is settled at that and the defendant will not pay the costs of the proceedings. If on the other hand the Claimant wins, say, 95%, well of course it is right that the defendant pays interest and costs; due to its bad stance it has caused the claim to go before the Court, and it should pay the costs for doing so.

“Interest alone will see costs increase significantly”, was the next argument. Again, probably not true if the insurers were well advised by this loss adjuster. If a delay between the claim and settlement is caused by a claimant, a Court is unlikely to award interest. If however the Claimant recovers, say, 95% instead of 20%, and the low offer of 20% meant that the claimant went 2 years out of its money, the Court would likely award the claimant interest on damages to compensate it from being out of its money for 2 years and for the defendant having the benefit of that money for 2 years. Surely that is the just approach. So again the adjuster and his insurer clients have nothing to worry about if they have got this right.

“We pay [...] the appropriate sum. We do not [merely] seek the moral high ground, we have secured it” the article concludes, as if the word of a loss adjuster appointed to adjust a loss for a defendant insurer is the better final word than that of a judge. If the adjuster is right, they have nothing to fear from court proceedings. If they are right, they will be vindicated by the judgment of the Court.

So when an opponent assaults you with that lethal mix of a tragically low offer combined with accusations of aggression, and causing its client to be saddled with interest and costs, ask yourself whether you are in the right, and just up against bluster to try to bully you into accepting a reduced payment to the advantage of the person assaulting you with argument. If parties cannot agree a settlement, there is a Court process - in England one of the oldest and best in the world - to ensure justice is done. Until the Court decides, the bluster might be premature. As a last resort if necessary, the Court is there to decide upon the just outcome, with the cost of litigation on the loser. A defendant who has protected himself with an adequate offer, has nothing to fear.

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