Strategies to Obtain Early Settlement of General Aviation Claims

According to the NTSB, 1,471 general aviation accidents occurred in 2012 alone.  These accidents resulted in 432 deaths.  This follows the general trend for the last 14 years, when more than 1,400 general aviation accidents occur annually.  In 2010, general aviation accounted for 96 percent of all aviation accidents, 97 percent of fatal aviation accidents, and 96 percent of all fatalities for U.S. civil aviation.[i]  These statistics demonstrate the stakes associated with general aviation litigation, as approximately 1 in 3 accidents results in death every year.

Practitioners are familiar with the hallmarks of general aviation cases.  First, the plaintiffs allege serious, if not catastrophic damages: (1) wrongful death; (2) lost wages; (3) emotional damages; and (3) survivors’ damages such as loss of consortium.  Second, practitioners are faced with complex issues of liability. General aviation accidents can result from several competing theories: (1) pilot error such as loss of control or mid-air collision; (2) system or component failure; or (3) third party liability.  These competing theories lead to an exponential cost in experts, involving complex engineering facets, and often complex and expensive computer modeling to reenact the physics of the accident and/or the mechanics of material failure.

Add to these the ongoing costs of the NTSB investigation and reports, and practitioners face enormous expenses to investigate, reconstruct, and defend general aviation claims.  Between the multiple causation experts, damages experts, attorneys, and the geographic dispersion of witnesses, wrongful death claims can often run into the millions before the first demand is ever made; and that demand will be in the millions as well.  As a result, there are significant advantages to early settlement negotiations and resolution.  First, putative defendants avoid the publicity of a trial.  Second, clients salvage their reputations.  Third, clients avoid the disclosure of potentially disastrous facts.  Fourth, clients avoid the forgoing litigation fees and costs.  Finally, clients avoid a potential award of punitive damages.

By contrast, in 2003, approximately 98% of all civil tort actions were settled or dismissed without a trial in federal court.[ii]  Of approximately 98,000 tort cases concluded in the United States District Court from 2002-03, less than 1,700 were decided by bench or jury trials.  Knowing the slim chance any given claim will be decided by the jury, then, and the extraordinary fees and expenses associated with moving a case to trial, the general aviation practitioner should focus a directed effort on early settlement.

Engage Opposing Counsel Early

Counsel for manufacturers, pilots, repair facilities, and other targeted parties should engage claimant’s counsel soon after the accident, assuming a claimant has retained counsel.  During these early conversations, practitioners should focus on the complexities ahead and facing both sides.  Practitioners should take the time to discuss the lengthy delay a judicial resolution would entail, along with the slim chance a jury will actually decide the action.  And, if the claimant were to “hit big,” a lengthy appeal will almost certainly follow.  Given that financial compensation drives modern tort litigation, claimant’s counsel should focus on the time value of money for their clients.  Defense counsel should also include thoughtful early settlement engagement in their action plan for the same reasons.

Discussing the uncertainty of a successful outcome for either side provides opportunity to explore multiple different outcomes. Practitioners can explore the possibility of only of many parties being found liable, such as the pilot who was not paying attention on take-off, or the repair facility that failed to follow its station repair manual.  This provides an opportunity for claimants to analyze their risk/reward in pursuing multiple parties.  If claimants settle with some parties early, they can focus their litigation strategy on the remaining parties.

Lastly, practitioners should remind opposing counsel of the control both sides have in an early, negotiated resolution.  Collectively, the best service lawyers can render to their clients is the one whereby we make affordable settlement decisions easier for opposing counsel. By doing so, we can obtain an early resolution for our client.  After all, settlement only “hurts” for a short time and a verdict, successful or not, lingers.

Choose the time and place for early settlement discussions

Everyone likes the home court feel, and some are flattered that opposing counsel will travel to discuss settlement.  Scholars suggest a positive relationship between legal adversaries “can be more effective for achieving mutually beneficial and equitable outcomes.”[iii]  Making small concessions to increase your “likability” makes it more probable your opponent will ultimately accept a negotiated offer.[iv]

Another tactic practitioners may employ is to promote settlement discussions while at NTSB inspections or other investigative arenas.  The neutrality of the site, while an independent investigation is ongoing, can foster mutuality of purpose with a secondary benefit of setting the stage for later productive discussions.  And by abandoning the “see you in court” stalemate, practitioners can truncate the negotiation process and engage in fruitful discussions.

Avoid discussions of liability

In addition to stalemating discussions, telling opponents they do not have a case will cause them to take similarly extreme positions themselves.  So, practitioners should focus the discussion on damages to the exclusion of the root cause(s).  If you do not already have it, devote your research to developing a detailed knowledge of the elements of damages recoverable in the jurisdiction where the action is (or would be) pending.  Then you can discuss with opponents whether they can recover for a survivorship action depending on whether suffering are presumed or must be proved by independent evidence.  You should know and be able to discuss whether caps on non-economic damages exist.  Unrealistic demands well outside jury awards in conservative jurisdictions, for example, are harbingers for early failed settlement discussions.  Practitioners can manage those expectations with strong, sourced research on damages.

Engage different mechanisms that are educational and economical

If opposing counsel hesitates to negotiate early in the process, practitioners can employ several mechanisms that make negotiation more attractive.  For instance, proposing limited damages discovery may entice opponents to tell more of their story.  Also, discovery such as a limited deposition of the surviving family members allows the injured party the opportunity to “say their peace,” while allowing the client to evaluate the family’s credibility, likeability, as well as to measure the loss resulting from the deceased loved one.

Additionally, practitioners can request the economic damages from the claimants and engage a single expert to evaluate those damages.  After obtaining the raw data, an expert will develop a clear, early picture of the economic damages, damages which are unlikely to change as the action progresses.

Focus on closure for the survivors

Wrongful death litigation characteristically extends the period of mourning and grief for the survivors and family members.  Survivors are constantly required to relive the loss of a loved one while making strategic and tactical litigation decisions, preparing for trial, and testifying (at least twice) about the pain and grief.  Thankfully, practitioners often observe that the end of litigation brings an end to the grief itself, or at least claimants can begin the process of healing by putting the blame behind them.  By focusing on this closure early, opposing counsel can achieve a goal they cannot often achieve through drawn-out litigation: peace.

Conclusion

Given the nature of general aviation claims and accidents, aviation practitioners should take advantage of early negotiating strategies.  Early negotiation should result in savings on many fronts: financial savings, reputational savings, and psychological savings. Remember that a bad settlement is better than a bad trial.

Bruce Wallace practices in Nexsen Pruet’s Charleston office, where he has represented banks, insurers, and corporate clients in a wide range of matters related to business and consumer litigation for almost two decades.

Bruce has been active with DRI for many years and in several capacities.  He is the current Annual Meeting chair, as well as the vice chair of the Lawyer Malpractice SLG of the Professional Liability Committee.  In the past, Bruce served as chair of the D&O and E&O SLG of the Commercial Litigation Committee.

With 190 attorneys in eight locations throughout the Carolinas, Nexsen Pruet provides comprehensive legal services to companies both large and small, handling challenges at the deal table, in court, and in the halls of government.  To contact Bruce, call 843.720.1760 or email bwallace@nexsenpruet.com.

Robert J. Lowe, Jr. practices at Lowe & Associates in Charleston, SC., and is a retired Air Force/Air National Guard fighter pilot.

Bob has represented banks, insurers, corporate clients and government agencies in complex litigation and related matters for over 30 years.  These matters have included aircraft wrongful death litigation in the state and federal courts of Virginia and South Carolina.

He has been a speaker at government, corporate and academic forums on a wide range of issues.  Bob also co-authored “Vanguard,” the strategic vision for the Air National Guard.  To contact Bob, call 843.408.1900 or email rlowe@lowefirm.com.