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Defence Vs Settlement

Published: 
02 November, 2011

Lawsuits are inevitable in the amusement industry, and several plaintiffs’ attorneys have targeted the industry in recent months. Insurance companies retain defence counsel to represent your interests in these lawsuits, but which ones should you urge the insurer to defend and which should you attempt to settle amicably? 

First and foremost, you should always, in every circumstance, defend every case that is fraudulent or in which you otherwise did nothing wrong. Plaintiffs’ attorneys communicate daily about pending lawsuits, potential cases and easy or difficult targets for lawsuits (who always settles cases and who fights tooth and nail).

If you defend lawsuits vigorously and make plaintiffs and their attorneys work endlessly to “earn” any money they ultimately get, the number of claims and lawsuits against your park will decline. Attorneys facing the decision of whether to take on a new client with a questionable claim will be unlikely to accept the client – knowing they are going to have to work extremely hard for years with no guaranteed payoff.

The challenge in defending every dubious case is being willing to pay more to defend the case than you would to settle it. After all, it may seem a silly business decision to pay $30,000 to defend a case that you could settle for $5,000. However, when you settle 10 cases for $5,000, word spreads that you settle and those $5,000 claims keep coming.

When you defend a handful of $5,000 cases, showing you are willing to defend yourself even when it costs more to do so, those $5,000 cases stop coming in and, in short course, you are facing only legitimate lawsuits. In the end, by vigorously defending baseless claims, you will save money in insurance premiums, and, as importantly, your time and effort spent defending your park.

Conversely, any claim or lawsuit that is meritorious – where you know your park did something, or failed to do something, that caused an accident, should be considered for settlement – as early and as cost effectively as possible. However, that settlement must take into account the injuries allegedly sustained and what they are realistically worth. Don’t be hijacked into paying for injuries that are exaggerated or unrelated to the accident at your park. Work with your attorney to investigate the plaintiff and whether the claims are legitimate.

Those cases where responsibility for the accident is questionable or the plaintiff themselves played a part in causing it, should also be considered for settlement but at a compromised amount. Furthermore, all cases should always be settled with a confidentiality provision. This helps to protect you from “the word on the street” becoming that you are an easy target for future lawsuits.

Heather Eichenbaum is a member with Spector Gadon & Rosen PC, practising in Pennsylvania and New Jersey. In addition to defending amusement venues, she also handles and provides training in crisis management. Legal counsel to and a board member of the National Association of Amusement Ride Safety Officials in the United States, she is also a member of IAAPA, NJAA, OABA and the IISF. Should you need legal assistance, reach Heather at: +1 215 241 8856 or heichenbaum@lawsgr.com.









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