If an ERISA appeal for long term disability benefits is denied and the claimant pursues litigation, the appeal is likely to be mediated before going to trial with a judge. Indeed, most ERISA cases settle in mediation.
Here are some fundamental points to understand about mediation of long-term disability cases:
- Mediation discussions are confidential. What you say in mediation cannot be used against you in court.
- The parties are kept separate during the mediation and the mediator conveys information back and forth. It is a collaborative process with the mediator rather than an adversarial process in confrontation with the opposing side.
- The mediator facilitates a negotiation to encourage the parties to reach a settlement amount but, ultimately, mediation is voluntary, and it is entirely up to you to decide whether to accept or decline a lump sum settlement.
- Mediations are private and your information and documentation is only shared with the other side and the mediator, whereas disclosures to the court become public information.
- Once a settlement is reached, you can move on your life and never deal with the insurance company again. If a case wins at trial, there can still be an appeal of the court’s decision. Even if there is no appeal, the court’s remedy is to reinstate the benefits. The insurance company will be liable for attorney’s fees but there are no punitive or extra damages. When benefits are reinstated, it means you must continue to provide ongoing documentation to the insurance company in order to continue to qualify for monthly benefits.
- The final settlement number that is on the table toward the end of a mediation will be a percentage of the total value of the case minus offsets such as Social Security Disability Insurance (SSDI), discounted to present value. There is no option available at mediation or through a win at trial that would guarantee receiving the maximum cumulative value of your benefits.
The decision to take or decline a lump sum settlement offer is very much an individual one that will factor in a variety of personal and family circumstances as well as case-specific considerations. An experienced ERISA attorney can help you understand all the factors, but, as noted above, you are in the position of power when it comes to mediation and it is up to you decide whether or not to take a lump sum settlement.
If you would like to speak with an experienced ERISA attorney about your situation, please call Kantor & Kantor for a free consultation at 800-446-7529 or use our online contact form.