CCP Settlement Negotiation Tactics 2 — Questions and Answers
Question 1: During a negotiation, the opposing counsel makes an extreme opening demand far above the claim's value. What is the BEST initial response for a claims professional?
- Accept the demand to show good faith
- Counter immediately with an equally extreme low offer
- Acknowledge the demand, then present a well-documented counter supported by evidence (Correct answer)
- Refuse to negotiate further until counsel lowers the demand
Correct answer: Acknowledge the demand, then present a well-documented counter supported by evidence
Acknowledging the demand while presenting a documented counter anchors the negotiation in evidence and maintains productive dialogue.
Question 2: What does the term 'bracketing' mean in settlement negotiation?
- Setting a confidential reserve amount before negotiations begin
- Making offers that bracket the target settlement in progressively narrowing ranges (Correct answer)
- Excluding certain claims from the negotiation scope
- Establishing a time bracket for completing negotiations
Correct answer: Making offers that bracket the target settlement in progressively narrowing ranges
Bracketing involves making offers that frame the target settlement amount between progressively narrowing high and low figures.
Question 3: A claimant refuses to provide a medical authorization needed to evaluate their injury claim. What is the most appropriate action?
- Immediately deny the claim for lack of cooperation
- Explain the necessity of the authorization and document the refusal in the file (Correct answer)
- Offer a nuisance settlement to close the file
- Proceed with evaluation using only available information
Correct answer: Explain the necessity of the authorization and document the refusal in the file
Explaining the requirement and documenting the refusal protects the insurer's position while giving the claimant an opportunity to cooperate.
Question 4: Which negotiation technique involves deliberately delaying responses to create pressure on the opposing party?
- Nibbling
- Good cop/bad cop
- Time pressure tactic (Correct answer)
- Anchoring
Correct answer: Time pressure tactic
The time pressure tactic exploits deadlines or delays to make the opposing party feel compelled to settle quickly.
Question 5: When evaluating a bodily injury claim for settlement purposes, which factor is LEAST relevant to economic damages?
- Lost wages documentation
- Medical bills and records
- Claimant's pain and suffering narrative (Correct answer)
- Future medical cost projections
Correct answer: Claimant's pain and suffering narrative
Pain and suffering is a non-economic damage; economic damages focus on measurable financial losses like wages and medical costs.
Question 6: A claims professional discovers during negotiations that the claimant has a pre-existing condition that aggravates the claimed injury. How should this affect the settlement evaluation?
- The claim should be denied entirely based on the pre-existing condition
- Only the aggravation of the pre-existing condition should be compensated, not the underlying condition (Correct answer)
- The full claimed amount should be paid regardless
- The pre-existing condition should not be disclosed to avoid bad faith allegations
Correct answer: Only the aggravation of the pre-existing condition should be compensated, not the underlying condition
Under the 'thin skull' and aggravation doctrines, liability generally extends only to the degree the accident worsened a pre-existing condition.
Question 7: What is a 'Mary Carter agreement' in the context of multi-party settlement negotiations?
- A structured settlement requiring court approval
- A secret agreement between the plaintiff and one defendant that affects the remaining defendant's liability (Correct answer)
- A mediation protocol used in property damage disputes
- An agreement to split attorney fees between co-defendants
Correct answer: A secret agreement between the plaintiff and one defendant that affects the remaining defendant's liability
A Mary Carter agreement is a confidential settlement between a plaintiff and one defendant that typically guarantees the plaintiff a minimum recovery while the settling defendant remains in the case.
CCP Settlement Negotiation Tactics 2
During a negotiation, the opposing counsel makes an extreme opening demand far above the claim's value.
What is the BEST initial response for a claims professional?