Say You’re Sorry

In some lawsuits, falling on your sword may be smarter than wielding it.

He isn’t alone. “An apology can work wonders” in employment discrimination cases, “particularly if it comes early on,” says Kenneth R. Feinberg, founder of The Feinberg Group LLP, a Washington, D.C.- based law firm that specializes in mediation and other forms of alternative dispute resolution. He points to one case in which a company laid off 450 workers, many of them older employees who were unwilling to relocate to a new facility. The workers filed an age- discrimination lawsuit. When the case went to mediation, the company sent its vice president of human resources to the meeting with a settlement check, but without lawyers.

Says Feinberg: “He said to the plaintiffs’ lawyers and representative employees, ‘We’re sorry. We had to do it. We feel like it was a break with family.’ If he hadn’t done that, the case would have ended in protracted litigation. It ended up settling for a modest amount of money and a written apology, and the [plaintiffs] went away.”

WHAT VICTIMS WANT

Studies indicate that besides compensation for tangible damages such as medical expenses, most victims of negligence want three things, says Rosenthal: a sense that their complaint is being taken seriously, a satisfactory explanation of what happened, and an assurance that steps are being taken so it won’t happen again to someone else. At the moment, however, most firms facing lawsuits find it safer to play hardball, and lawyers say that’s especially true in the arena of product liability involving physical injury.

Unless a company’s liability is beyond doubt, says Feinberg, “corporations don’t apologize, and don’t feel they can. It’s a signal that they’re liable. In those cases, the implications go way beyond the individual case.” He contends that apologies should most likely occur in cases where the causation is clear or unassailable, and in which the consequences beyond the individual case are negligible. In the Firestone-Ford case, he explains, the liability was apparently so clear, and the impact on other cases apparently so negligible because of the unusual circumstances, that the apology to Bailey could only help, especially since it kept the case out of court, where damning evidence was likely to come out.

But even in such cases, some experts say, most companies are not inclined to issue apologies, if only because attorneys for their insurance companies have an interest in seeing cases drag on. “The big insurance defense lawyers rarely settle before discovery, so they can bill the hours that they have budgeted for the case,” says attorney Shuman.

Also, insurers all too often threaten to end coverage when apologies are granted. And the industry is notoriously slow to change. Even so, William Bailey, special counsel for the Insurance Information Institute, contends that insurers would have no choice but to respond if enough customers demanded coverage that remained in place despite apologies.

Ultimately, of course, the question depends on how much money is at stake. And it’s impossible to determine how much has been saved by swift, sincere apologies, both in avoided court costs and lower settlement amounts, since most settlements are confidential. Shuman points out that 90 percent to 95 percent of all cases, civil and criminal, are eventually settled out of court. The only place such information would be available is with defendants’ insurers, and they’re not inclined to discuss the figures.

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