The Law Office of Dale Gribow focuses on collecting compensation for accident victims.  However it is currently more difficult to address the problem of claims strategies used by insurance companies.

Most insurance companies are now using a computer generated program called Collosus.  Adjusters plug in the medical bills and the injuries and the computer spits out an amount they can offer.

Most insurance companies have adopted company-wide hard line claims strategies for all accident cases.  Thus more and more of a lawyer’s time is being spent developing strategies to meet the challenges of specific insurance companies.

Until a few years ago, the hard line philosophy (refusal to make a reasonable offer) was seen on an individual case or adjuster basis.  If an insurance adjuster took a hard line approach, the lawyer for the accident victim would have the claims manager or the defense lawyer assist in bringing the adjuster back to reality.  Or, the lawyer would supply the insurance adjuster with additional information to change the adjuster’s mind.  If necessary the accident victim’s lawyer placed the case before a judge or jury.


Recently, the hard line philosophy has been implemented for entire insurance companies.  These companies will not offer fair compensation for any claim, across the board.  This includes claims made by their own insured.

For lawyers, dealing with hard line insurance companies,  is an attorney’s worst nightmare-come-true.  The lawyers know that no matter how well the case is prepared, they must either accept a clearly unfair settlement or ask the client to risk getting nothing because of the enormous cost of trial.

For example, a case that would normally result in a jury verdict or settlement of $15,000 today might only draw a settlement offer of $7,500 from the hard line insurance company.

There is no longer the opportunity to deal with someone else in the company to get around the hard line adjuster or submit additional information to change the adjuster’s mind.

It has only been within the last few years that insurance companies have adopted company-wide hard line settlement policies.  The change coincides with the Supreme Court decision to eliminate “bad faith” claims against insurance companies by third parties.  One of the abuses that bad faith law corrected was management decisions by insurance companies that were clearly directed towards profiting from unfair and inadequate payment of claims.

If the client and lawyer decide to go to trial, the cost increases dramatically.  It can take between $15,000 to $50,000 to pay for court costs, investigation and expert witness testimony.  The lawyer, client and witnesses are all required to increase the time spent to prepare for trial.  In addition, the client often has to wait several years for the case to get to trial because of California’s cutbacks because of the economy in 2013.

Most law firms see only the options of settlement or trial to conclude a case against a hard line insurance company.  There are two additional options that may be tried – voluntary binding mediation and binding arbitration.  Binding mediation is an agreement by both sides to select a neutral mediator to decide the claim.  Both sides must agree to be bound by the decision of the mediator.  The mediator is usually a retired judge or lawyer who both sides believe would give an impartial award.

Usually the liability is admitted by the insurance company and the case is submitted using documents, without expert witness testimony.  Often the adjuster represents the insurance company at the mediation conference, thus no additional litigation cost is incurred by either side.

Binding arbitration is similar to binding mediation except the insurance company’s defense lawyers become involved.  Like binding mediation, an unbiased arbitrator is agreed to by both sides.  However, the defense lawyers must investigate.  This increases case costs, prolongs resolving the claim and increases the time expended by the injured party’s lawyer.  At the hearing, expert witnesses may be present to give testimony. This increases the costs and the uncompensated time of the client.

My advice to most law firms in these circumstances is to go through the normal investigation, negotiation and settlement procedures that may succeed with other insurance companies.

If the normal process fails to bring forth a reasonable offer, pursue binding mediation or binding arbitration.  In my opinion, binding arbitration is preferable in all cases where an issue of fault exists or the client has continuing complaints.

There are several advantages to the hard line insurance company by accepting a binding resolution.  There may be a percentage savings due to the natural conservatism of the mediator or arbitrator.  The insurance company has the opportunity of reduced payments in cases it believes are of little merit.  Most of all, binding mediations and binding arbitrations let the insurance company dispose of claims without high administrative and litigation costs.

Many lawyers representing accident victims find voluntary non-binding mediation and arbitration proposals of little value when dealing with the hard line insurance companies.  A voluntary non-binding mediation or arbitration is similar to a settlement conference.  It is often easier for the mediator to get the person who wants money to take less than to convince the person who must pay to give more.  However in 2013 some insurance companies will not agree to any binding process and thus a non-binding arbitration or mediator is often better than nothing.  It may convince the adjuster to increase his offer when the award is greater than his offer.

The war with hard line insurance companies cannot be won by using traditional methods.  The war can only be won through small battles fought by lawyers who are willing to look outside the box to see ways of concluding cases outside the usual settlement and trial methods.  These small battles can only be won through the development of specific strategies for each insurance carrier.

A successful strategy depends on whether the company sees itself in a win-win situation in the proposed solution.  Hopefully, everyone is a winner with an arbitration or a mediation.