$1B Settlement Reached in Stryker Hip Implant Mass Tort

Hon. Diane M. Welsh (Ret.)

Hon. Diane M. Welsh (Ret.)

Thousands of plaintiffs in New Jersey and around the country who had surgery to remove failed hip implants settled their claims November 3 in a deal that is expected to pay out more than $1 billion. It was reached after four months of negotiations with Stryker mediated by retired U.S. Magistrate Judge Diane Welsh, a JAMS mediator based in Philadelphia.

The global settlement with Howmedica Osteonics Corporation, a Mahwah, N.J., corporation that does business as Stryker Orthopaedics, resolves the claims of about 3,000 individuals who were implanted with Stryker Rejuvenate and ABG II Modular hip stems. Stryker agreed to a base payment of $300,000 to compensate plaintiffs who had to have a Rejuvenate or an ABG II hip implant device surgically removed before November 3, according to counsel. The payment will be doubled for plaintiffs who had devices removed from both hips, the attorneys said, and there will be additional payments for complications arising from the removal surgeries.

Between December 2013 and June 2014, Judge Welsh successfully mediated more than 20 bellwether cases that were filed in state court in New Jersey. She then successfully mediated the global settlement agreement for the federal Multi-District Litigation and the New Jersey litigation covering approximately 4,000 cases and is also open to claimants who have not yet filed suit.  Judge Welsh will now serve as the Claims Administrator to ensure that the settlement is carried out in accordance of the settlement agreement and she will decide appeals from claimants who are denied.

For additional coverage, please click here for coverage in the New Jersey Law Journal or here for Bloomberg coverage.

Experts Predict ADR Will Help Resolve ACA Claims

By Chris Poole

The use of ADR to resolve healthcare-related claims will increase with the implementation of the Patient Protection and Affordable Care Act (ACA).  Experts predict the increase will stem from the need to reduce costs as well as the healthcare groups that will bring new disputes for resolution.

Dr. Leonard Fromer, an assistant clinical professor at the UCLA School of Medicine and a board member of TransforMED, LLC, said the passage and implementation of the ACA is “moving healthcare from a volume-based system to one based on the value of the healthcare provided and their outcomes.”  The establishment and projected growth of Accountable Care Organizations (ACOs) is the main component that comes from the PPACA that will change the types of disputes that will arise and the manner in which they are handled and resolved, he explained.

ACOs are groups of doctors, hospitals or other healthcare provides that come together voluntarily to give coordinated high quality care to patients. ACOs were established by the PPACA to provide quality care while keeping healthcare costs down.

Under the old system, parties brought cases based on billing disputes or the meaning of contract terms, Fromer said.  However, with the creation of the ACA and ACOs, cases will begin to shift toward disputes over the metrics used by insurance companies and the federal government in Medicare cases to determine reimbursement, quality of health outcomes and value.

Michael D. Roth, an attorney and ADR neutral in Los Angeles who specializes in healthcare disputes, echoed Fromer’s suggestion regarding new disputes. “Doctors will have more interaction with providers in the system, which could lead to disputes over payments based on outcome,” he said.

ADR could also be used due to changes in the ACA, which require that a higher percentage of revenue go directly to medical care and not administrative costs, he said.  “ADR could grow in use because it is seen as a cost-saving measure since outside legal costs will count as administrative costs under the ACA,” Roth said.

Katherine Benesch, an attorney with Benesch & Associates in New Jersey, specializing in healthcare law and ADR, said a factor that will encourage the use of ADR more often “is the repeat-business nature of contract relationships in the healthcare sector.

Using mediation or arbitration to resolve a dispute will result in a settlement or decision in “less time for less money,” and the parties will “have had a say in the process,” which goes a long way toward allowing the parties to move on from the dispute and resume their business relationship.

David L. Douglass, an attorney with Sheppard Mullin in Washington, D.C., who specializes in healthcare litigation, said that in his area of practice, healthcare fraud disputes, ADR is often used in civil cases and “has become more popular with industry and government,” he noted.

According to Douglass, “Mediation is the more popular option because it allows parties in very complex cases involving numerous statutes to craft confidential settlements and resolve wide-ranging claims in one process.”

Five Things You Didn’t Know about Mediation

Mediators are always learning about what helps – and what doesn’t – when it comes to resolving disputes. This is what makes them effective at finding common ground between parties. There is always something new to learn about how people interact, what motivates them, and what will bring them together to agree on a settlement. Following are five points to consider about mediation from members of the JAMS panel.

1. Mediation is an opportunity for your client to tell their side of the story

“Most parties participating in mediation want to tell their story,” says Jeff Grubman, a JAMS mediator, based in Florida. “In many ways, mediation is their day in court.”

2. Some clients want to tell that story without their counsel present

“Most, but certainly not all, clients can satisfy their desire to tell their story by speaking with the mediator in caucus,” says Grubman. “However, some clients, particularly successful business people, want to speak directly with their adversary.”

Grubman notes that these clients might feel more inhibited if attorneys from both sides are present. In that case, often several hours into the mediation, a session with just the parties and the mediator can be very effective, says Grubman.

“I have participated in numerous mediations where cases have settled in the course of a relatively brief meeting with the parties without their counsel present,” he says.

Grubman notes that even attorneys who have instructed their clients not to speak during opening statements will often readily agree to a meeting without counsel present. It is particularly the case when the attorneys trust the mediator.

3. Others prefer less dialogue and rely on the mediator

“You don’t have to meet with or confront the opposing party or counsel,” says Bruce A. Friedman, Esq., a mediator with JAMS in Southern California. “Clients can leave the negotiating to the mediator, who can be trusted not to divulge confidential information, such as settlement ranges. Negotiations also do not need to proceed on a distributive bargaining or back-and-forth basis.

4. Mediations can be emotional

Managing emotions is a big component of keeping mediation on track towards a mutually agreeable resolution.

“The better we use our understanding of both our own emotions and those of others, the more successful the mediation will be,” says Judge Jamie Jacobs-May (Ret.), a mediator with JAMS in San Jose. “Good moods enhance collaboration and creativity.  By contrast, the presence of strong negative emotions can interfere with good decision-making.”

Judge Jacobs-May says parties can take steps to keep emotions positive.

“My top tip for eliciting positive emotions is to spend time establishing rapport with your opponent.  Get to know him or her.”

5. Be aware of and avoid emotional triggers

We all know that words can provoke strong emotions, and this is something to keep in mind, especially in stressful situations such as a dispute.

“To prevent the escalation of negative emotions, avoid words and phrases that serve as emotional triggers,” says Judge Jacobs-May.

She advises avoiding words that fall into categories known as “The Big Six,” a concept from Holly Schroth, who teaches negotiation skills at the University of California, Berkeley.

They are:

  1. Name-calling (“You are a liar”; “Don’t be stupid”)
  2. Bossing (“You need to. . .”; “You can’t. . .”)
  3. Superiority (“This is how we’ve always done it; “I don’t think you understand. . .”)
  4. Dismissive (“With all due respect. . .”; “It’s simple. . .”)
  5. Self-righteousness (“I’m being reasonable”; “I’ve treated you fairly”)
  6. Threats (“I can ruin you. . .”)

There is still much we can learn about the mediation process. Hopefully these five insights provide a start.

JAMS Ireland Opens in Dublin and Belfast

JAMS IrelandJAMS is proud to announce the addition of JAMS Ireland as the newest member of JAMS International. JAMS Ireland offers parties from different jurisdictions mediation and arbitration services in Dublin and Belfast.

JAMS Ireland is the latest addition to the growing international network of high quality commercial ADR providers that JAMS established in 2011. Other members include ADR Center in Italy and Results ADR in the Netherlands.

ADR in Ireland is on an upward trajectory, based on the economic realities and legislation encouraging consensual resolution of disputes. We are pleased to have quality partners who are working with us to take advantage of the growing need for commercial ADR in Ireland and to further expand our global network.

JAMS Ireland will be spearheaded by two very experienced lawyers, Paul Tweed and Gavin Bonnar, who between them have represented high-profile, international clients for more than 50 years.

“JAMS Ireland will offer a neutral and convenient geographical location as well as a world-class panel of experts with unique experience and a strong pedigree in mediating the most problematic cross-border and general commercial disputes,” said Mr. Tweed. “We have established this service with a view to providing efficient and cost-effective dispute resolution alternatives in both Irish jurisdictions, supported by the world-class expertise of JAMS in order to provide resolutions to the often sensitive issues arising from cross-border disputes.”

In addition to Mr. Tweed and Mr. Bonnar, the JAMS Ireland panel includes Lord Mawhinney, Aaro Suonio, Tom Kelly, Brian Speers, Paul O’Higgins, Michael Kealey and Fintan Drury, along with the talented JAMS panel of retired judges and attorneys.