Mediation and Settlement

An Introduction to Mediation and Settlement

A fundamental axiom of litigation is that insurance settles cases. Virtually every settlement of a lawsuit involves insurance and insurance issues. In fact, the large majority of settlements are paid by insurance money. Further, insurance coverage, bad faith, duty to defend and insurance defense issues are frequently the catalysts for settlement. The bottom line is that insurance controls the settlement dynamic and decisions regarding the timing and amount of settlements made by insurance companies.

A corollary to this fundamental axiom of insurance law is that lawyers with insurance law expertise will have a significant advantage over an adversary in settlement discussions. This expertise can take many forms. For example, an attorney could be a plaintiff's counsel seeking to maximize the amount of settlement to be paid by the defendant's insurance company. Conversely, an attorney can be defense counsel seeking to either settle a case using insurance company money or force the plaintiff to lower their demands or even drop the case completely because they have leveraged the duty to defend against the plaintiff. It could also be an attorney representing a plaintiff and cross-defendant who has been able to trigger the duty to defend, thereby bringing the power of the insurance company into the litigation mix.

Callahan & Blaine has the expertise, experience and track record to settle cases that no other law firm can settle. Callahan & Blaine is able to use its extensive insurance expertise and complex litigation experience to settle complex cases where other law firms have failed. Under the leadership of Edward Susolik, the chair of Callahan & Blaine's Insurance Law Department, Callahan & Blaine has successfully settled and resolved hundreds of complex litigation matters using its knowledge and experience in insurance law and insurance litigation. In fact, Mr. Susolik likely conducts more mediations and settlement conferences per year than any other practicing attorney in California. In a typical year, Mr. Susolik will conduct approximately 75 to 100 mediations, MSCs and other settlement conferences on behalf of Callahan & Blaine clients.

Moreover, Mr. Susolik's track record in settling cases is unparalleled. For example, Callahan & Blaine successfully obtained a $50 million settlement in a case entitled Daniel v. City of Dana Point. This $50 million settlement has been certified by West Trial Digest as the largest personal injury settlement in the history of the United States. The settlement would not have been possible without Callahan & Blaine's expertise in insurance law. Callahan & Blaine utilized this expertise in many different ways in obtaining the settlement, including making a policy limits "settlement demand" on the excess insurance company which was kept open for a reasonable time. After the insurance company for the City of Dana Point rejected the policy limits demand, Callahan & Blaine took the position that the "top had been blown off the policy," thereby exposing the carrier to significant liability in excess of policy limits. Ultimately, the case settled on the first day of trial. Without question, the excess liability weighed heavily on the insurance carrier in deciding to settle the case for a record-breaking amount.

Likewise, Callahan & Blaine uses its extensive understanding of insurance law, insurance principles and ultimately the threat of insurance litigation to maximize settlements for its clients, whether they are plaintiff or defendant. For example, a significant factor in the settlement of cases at mediation is knowing and understanding the psychology of insurance carriers. Callahan & Blaine attorneys can look back on their experience of having handled over 1,000 bad faith lawsuits and claims in gaining an expert understanding of the psychology and mentality of insurance companies. For example, Mr. Susolik has taken the depositions of countless insurance professionals, including chief executive officers of insurance companies, senior executives, claim adjusters, underwriters and many others in the insurance company chain. In one case, Mr. Susolik took the deposition of the CEO of a major insurance company for nine days in a $100 million unfair competition litigation. Mr. Susolik understands the psychology of insurance companies better then they do themselves. This type of "insider" information is absolutely critical when negotiating with insurance companies and trying to understand insurance company psychology.

Callahan & Blaine as Defense Counsel

Frequently, Callahan & Blaine is called upon to act as Cumis counsel and/or defense counsel in cases where Callahan & Blaine has triggered the duty to defend. In such situations, Callahan & Blaine must wear two hats. On the one hand, Callahan & Blaine must aggressively and comprehensively defend against the plaintiff's case. Therefore, as defense counsel, Callahan & Blaine's goal is to defeat the plaintiff's claims to the greatest extent possible, perhaps even to obtain a dismissal of the case. Toward that goal, Callahan & Blaine works closely with the insurance company in obtaining the most thorough and comprehensive defense possible pursuant to the insurance policy.

On the other hand, Callahan & Blaine's clients will frequently want to settle and resolve litigation short of trial. Toward that end, Callahan & Blaine calls upon its insurance experience and expertise to negotiate with the defendant's own insurance company in order to settle the case. Frequently, this type of negotiation requires extensive debate, discussion and even disagreement with the carrier regarding insurance coverage issues. Callahan & Blaine must frequently overcome the insurance company's claims and contentions regarding exclusions, uncovered damages, other insurance issues and many other hurdles and obstacle thrown up by the insurance carrier.

Many times Callahan & Blaine must engage in what is essentially a tripartite, or triangular, mediation. On the one hand, Callahan & Blaine must aggressively negotiate with the plaintiff in trying to get the lowest settlement possible. On the other hand, Callahan & Blaine must aggressively negotiate with its client's own insurance company in order to raise enough money to settle the matter. In cases where Callahan & Blaine does engage in this type of tripartite settlement negotiation, it is absolutely essential that the mediator who is handling the negotiations be an expert in an area of insurance coverage. Callahan & Blaine has extensive experience with many of California's best mediators, and knows which mediators are experts in insurance and therefore able to settle complex litigation disputes that have insurance coverage issues.

Trial Dates Settle Cases

It is an absolute fundamental of litigation that trial dates settle cases. Ultimately, this principle is borne out by the many settlements that are literally achieved on the "courthouse steps," on the eve of trial. At the same time, a much more effective and economically efficient way to accomplish the same settlement is to hire plaintiff counsel or defense counsel who have extensive trial experience.

One of the key questions to ask when hiring a litigator is whether that lawyer or law firm has a track record of conducting actual trials in front of a jury. A litigator who has never conducted a trial cannot be an effective advocate in the pre-trial and discovery phases, much less the actual handling of a trial. Ultimately, every lawsuit that is litigated must have as its ultimate goal how the facts and legal issues will be decided before a jury and judge. If the litigator is not an experienced trial attorney, the entire discovery, law and motion, deposition and pre-trial phase will be handled in a mediocre and unpersuasive manner. This, in turn, will result in the defendant feeling no fear or pressure of an adverse trial outcome, and the case will not settle.

The bottom line is that the opponent on the other side will feel no intimidation or pressure to settle with a legal adversary who has no track record of trials.

Settlement is a powerful weapon in the arsenal of the "litigator/trial lawyer." It is one of the true ironies of litigation that the best settlements come from the lawyer who is an expert at trials and has prepared his case for trial. The trial lawyer who prepares his case for trial is the lawyer who gets the best settlements. Callahan & Blaine is precisely such a firm. As one of the top trial law firms in the United States, Callahan & Blaine obtains phenomenal settlements.


Perhaps nowhere else does Callahan & Blaine's combination of trial and litigation experience and insurance law expertise come together more powerfully than in mediation and settlement. Callahan & Blaine's track record in mediation and settlement successes bears out the reality that the lawyer who is expert at both insurance and litigation is by far the best advocate for a client in a settlement and mediation scenario.