It may seem counter intuitive, but with the right technique a heartfelt apology can help lower claims costs and exposures
There is a wave of civility sweeping through the world of risk management as a way to lower exposure and reduce costs: Apologize. Maybe mom was right when she stood there and said “now say you’re sorry.” In fact, there are some very impressive statistics in the area of medical malpractice around the simple use of an apology.
For example, as Peter Bregman wrote in his article in the Harvard Business Review, I want you to apologize, “When the University of Michigan Health System experimented with full disclosure, existing claims and lawsuits dropped from 262 in 2001 to 83 in 2007.” Now those are numbers to pay attention to.
The Movement to Apologize
Increasingly there is a view that making an apology can significantly lower the risk of lawsuits. Admitting fault and making an effort to fairly resolve the damages can greatly reduce indemnity payments and significantly lower claim expenses. In Canada they actually legislated it under the Apology Act of 2009 which allows communication of sorrow or regret without worrying that the comments can later be used adversely in a civil court. See Dan Pinnigton’s The Apology Act 2009: Sorry is no longer the hardest word to say.
Using techniques to foster an appropriate apology have been shown to lower costs. Hospital customer service groups are teaming with Risk Management to help reduce lawsuits as recently discussed in the Everest Best Practice’s Blog post – Healthcare Risk Management and Patient Relations Collaborate to Reduce Litigation. In fact, an entire organization, Sorry Works, was formed in 2005 to help businesses shift the view that making an apology after a bad event will increase lawsuits. After an experience of medical malpractice, Doug Wojcieszak, founded the company to counsel companies on how to effectively apologize.
3 Steps to Disclosure
Sorry Works advocates a program that is predicated on a three-step disclosure process:
Step 1 – Initial Disclosure – is all about empathy and re-establishing trust and communication with customer in the immediate aftermath of an adverse event. Executives say “sorry” but fault is NOT prematurely admitted or assigned. Also, do NOT become defensive. Executives take care of the immediate needs of the customer (phone calls, transportation, food, etc) and promise a swift and thorough investigation. The goal is to make sure the customer never feels abandoned. In the spirit of good customer service, pull the customer closer to your company or organization.
Step 2 – Investigation – is about learning the truth. Was a mistake/error made, or not? They recommend involving outside experts and moving swiftly so the customer doesn’t suspect a cover-up. Stay in close contact with the customer throughout the process.
Step 3 – Resolution – is about sharing the results of the investigation with the customer, and their legal counsel. If there was a mistake, apologize, admit fault, explain what happened and how it will be prevented in the future, and discuss fair, upfront compensation for the injury or death. If there was no mistake, continue to empathize (“we are sorry this happened”), share the results of investigation (hand over charts and records to customer and their legal counsel), and prove your innocence. However, no settlement will be offered and any lawsuit will be contested.
The Art of Saying Sorry While Protecting Rights
Kevin Quinley suggests proper ways to apologize in Can Saying “I’m Sorry” Manage Risks?
Start with, “I’m very sorry that this has happened” Note: this does not acknowledge any negligence or liability. Be concise. Do not go into detail or sound like you are making excuses. Be prompt. Don’t delay. The quicker you can apologize and express regret for a situation, the better chance you have of nipping a potential claim in the bud. Ask, “What can we do to make it right?” Use that as a starting point for negotiation. If the other party is threatening to initiate litigation or you are concerned that litigation may be in the offing, do not send a written apology. Even if the problem is not your fault, apologize for the situation and try to make amends. The determination to “be right” can get the best of many people and trigger costly claims. Even meritless claims may consume thousands of dollars in legal fees and hundreds of man-hours to defend.
Coverage Issues
It is important to note that some cooperation clauses could negate coverage if an insured admits liability. Many policies contain the following cooperation language which might be triggered in the event an apology is looked at as and admission of liability:
The Insured, except at his/her own cost and for his/her own account, shall not, without written consent of the Company, make any payment, admit any liability, settle any claim, assume any obligation or incur any expense. The Company shall have the right, but not duty, to appeal any judgment.
Understanding language that might give rise to a coverage concern should be addressed prior to instituting any apology program. Effective collaboration between insured and insurer can help avoid policy issues before they occur. (See the discussion in Does Medical Error Disclosure Violate the Medical Malpractice Insurance Cooperation Clause?).
Some Additional Thoughts
Even if an apology did not take place immediately after the incident, if the matter proceeds to litigation a mediation can also be an effective time to apologize. The general principal that things said at a mediation cannot be used at trial protects all from any statements which might be misconstrued or used against an insured at trial. When attending a mediation, make sure to choose the corporate representative who will apologize wisely. A flip apology from a person who is far removed from the event may do more harm than good.
As Kevin Quinley stated so well:
In the 1960s tearjerker movie and novel, “Love Story,” the tag-line was, “Love means never having to say you’re sorry.”
That may be true in love but it may not be true in risk management. In certain circumstances and situations, apologies may be legitimate risk management tools not only to retain valued customers, but to forestall expensive and time-sucking litigation.