FAQs on Settlement Intelligence AI Demand Letters
With the launch of Settlement Intelligence we’ve received inquiries regarding the platform and how it works for law firms. This FAQ answers the most frequently asked questions by lawyers interested in licensing Settlement Intelligence:
Question: Could you tell me about the background for the Settlement Intelligence platform?
For the past several years, Trial Guides founder Aaron DeShaw and Auto Claim Experts owner Charlette Sinclair, have been working on an AI program called Settlement Intelligence to replicate the demand letter format created through decades of research into insurance bodily injury software programs (Colossus, Liability Navigator and ClaimIQ.) The very first Trial Guides product released in 2004, was the result of three years of research by Aaron DeShaw into the programs used by auto insurers to create the settlement value of auto claims. He went on to publish three books (over 1000 pages) both on how insurers use software programs to evaluate noneconomic damages, and economic damages. Then in 2010, DeShaw and Sinclair launched Auto Claim Experts which accepted files from lawyers throughout the country, wrote demand letters, and consulted law firms on how to improve their settlements both institutionally as well as on a case by case basis. Both DeShaw and Sinclair have continued their research into these insurance bodily injury programs, and medical bill review software. Sinclair, has been a legal consultant on this type of demand letter with many lawyers nationally on thousands of cases since 2010, and has refined the demand letter format for the past 13 years in these cases.
These programs continue to be used by nearly all of the major auto insurers, as well as many of the premises liability insurers. The reason why Trial Guides exists is because of the stunning improvements in settlement outcomes for its earliest customers using the demand letter method at the heart of Settlement Intelligence.
The idea of the Settlement Intelligence program is to provide the factors DeShaw and Sinclair know to be used by the software to determine settlement offer values, and then provide them in the order the adjuster needs to enter them into the software. This allows the adjusters to obtain the information that the insurers value in the order in which they need to enter the data. If you are in a law firm that settles auto cases, use of the Settlement Intelligence platform should provide faster offers, and higher offers.
For more on the significant background of our owners on this topic, and why it matters to your settlement offers, see here.
Question: Does the Settlement Intelligence platform generate the demand immediately?
Answer: Yes. You access the Settlement Intelligence demand letter platform directly and input the information from your cases directly into the program. Upon completion of data entry, the Settlement Intelligence platform creates your demand letter in Word. You can download the demand letter directly within the Settlement Intelligence platform, and it e-mails you a copy of the demand letter as well.
Unlike other services suggesting they are "AI based demand letter platforms" you will not be sending your documents to another company and then waiting on the demand letter from a third party. (Which more importantly, are nothing like our demand letters.)
The Settlement Intelligence program duplicates the methodology based upon our 35+ combined years of research, knowledge and experience with the insurance bodily injury programs. The program is primarily tailored to auto cases, but also could be used for premises and workers comp cases.
Question: Why is the narrative text feature only available on the Enterprise Plan?
Answer: The core product is what is most important for the vast majority of auto cases. That core product is available to every licensee, and is going to result in the vast majority of value for any level of license.
The owners of Settlement Intelligence have obtained non-protected documents demonstrating the 12,000+ factors provided value within the insurance software and so the Settlement Intelligence platform is looking for whether your case has these factors. Using the Settlement Intelligence platform, and entry of the factors (now contained within the program) known to create value in these insurance software systems, has consistently generated much higher settlement offers. Co-owner, Aaron DeShaw, has used this demand format for over 20 years with significant success including the record jury verdict in his state ($77,500,000). Sinclair and DeShaw have used this format successfully on consulting client cases over the past 13 years on thousands of cases. Georgia lawyer, Blade Thompson, who has gone from opening his firm to running an eight figure practice within a few years recently noted; “I have for years retained Charlette Sinclair as a consulting expert but recently demoed Settlement Intelligence and it works well. We use it on almost every case now.”
Based upon the non-protected claim manuals DeShaw has used to understand these programs and his research into the programming of the insurance software, a narrative description is only necessary for a short list of conditions that are excluded from software analysis. These include the following:
- Wrongful Death
3. Traumatic Brain Injuries
4. Spinal Cord Injuries
5. Dental Injuries (excluding TMJ)
6. Psychological injuries other than Depression and Anxiety
7. Facial Scarring
8. Keloid Scarring
10. Car vs. Pedestrian
11. Injured party ejected from vehicle
12. Heart attack
13. Heart injuries or “bruised heart” resulting in cardiac arrythmias
14. Inhalation of chemicals
16. Dog bite wounds (premises liability claims)
17. Food poisoning (premises liability claims)
19. Pregnancy complications
20. Aggravation of a disease such as diabetes or MS
21. Sympathetic Ophthalmia
22. Cases involving professional and semi-professional athletes where there is a loss of enjoyment of life for sports (the athlete cannot perform at the same level after an injury.)
That said, there are specific entry fields for facial scarring, keloid scarring and disfigurement in Settlement Intelligence so those are already covered in the template and allow for a brief narrative entry by the user.
We do not believe it is best practices to write a narrative on the majority of injuries, so narrative generation is not applicable in the vast majority of claims.
The Settlement Intelligence platform allows lawyers or staff using the system (including legal assistants and paralegals) to duplicate best practices by requiring specific information of value to insurers and then putting it into the demand letter in the order and way that most effectively conveys that information to the claim adjuster. This is the inherent value of the Settlement Intelligence license. Licensees should make multiple times the licensing fees in increased settlement offers. We view the Basic Package to be a very affordable way for a solo practitioner to implement best practices that helps them maximize case value and move them to higher tier packages as the platform helps them achieve success and expand their law firm.
The Enterprise Package is not yet available to anyone at this time. So, this narrative feature is presently not available to anyone. But, the Enterprise accounts may be the only package with the narrative feature, because this feature requires an individual account that is much more expensive for us to program and host. The starter package is a fraction of the cost to host an Enterprise account. Which is why we are only offering narrative generation to the higher cost accounts.
The coding and processing for AI narrative generation more expensive, and the medical expertise for this offering requires significantly more time. The costs of this undertaking is being spread equally amongst licensees. We are concerned that making these features available to solo lawyers and small firms in the lower tiers will be cost prohibitive for smaller practices. But, we will consider this offering at a much higher price if there is sufficient demand.
Question: Should I send a demand letter before I have all of the records on the case?
Answer: No. We strongly advise against this. We cannot reinforce this point strongly enough. We have significant concerns as we are seeing an increasing number of lawyers engaged in this practice.
The short answer why you should not do this, is that adjusters at some insurers get penalized for re-running a client’s case in their software. As an example at Allstate, McKinsey saw that adjustors were trying to game the software by re-running claims in hopes of getting a higher settlement range. Needless to say this was stopped by penalizing adjustors who re-ran their claims. (Adjusters are also tracked for settlement within the high and low range of their first run to ensure adjusters are complying with the company policies in place to maximize an insurer’s savings by using these programs.)
If the adjuster violates company policies they won’t get a raise and will not get considered for promotion.
Adjusters can only enter information from the medical records and bills they have been provided at the time they run your claim. So, when you send a demand to an adjuster with only part of the records, you are either intentionally getting your client’s case undervalued, or you are going to resubmit the case later and result in a negative personal review for the claims adjuster that will prevent them from getting promoted. So, it is an awful idea to submit claims with only part of the records and bills.
There are two exceptions to this:
- The case is a clear policy limits case and you already know this because of disclosure of the policy limits;
- You have a client who is still treating but the statute of limitations is approaching and you submit all of the past medical records and bills to date so that the claim can be evaluated.
Despite this seeming very basic to us, we have seen some firms submitting demands without a full set of records and this is not a good practice. It is a bad way of attempting to settle claims.
What you should be doing is submitting important medical or wage loss documents when they become available without a demand letter, but instead with a letter seeking the insurer to re-set the reserves on your case based upon the new information. Some of the things that should trigger you to send in a letter seeking the resetting of reserves include things like:
- A specialist report;
- A surgical specialist’s opinion that the client needs surgery;
- A surgical record;
- A significant wage loss record;
- Radiological reports demonstrating a positive finding related to your case;
- Other records of significance.
If you do not have all of the records and bills you are not ready to write a demand letter. The Settlement Intelligence platform cannot help you and your clients if you are engaged in this practice.
Question: Can you provide me a sample demand?
There is a separate issue; every demand letter is different based upon case facts. AI controls the demand data requested of the person writing the demand, based upon the law firm’s entries, and collects data about the factors in the case (to help us better understand claim value of the claim factors.). The resulting demand letter will differ considerably based upon the data you enter. So, the demand format can vary significantly based upon the data entered into Settlement Intelligence. For this reason, a sample will not demonstrate how your demand letter should look like for a particular case.
If you want to make an appointment to see Settlement Intelligence in action you can request an appointment.
Question: Do you go through the medical records and billing?
Answer: We do not. Settlement Intelligence is a cloud based computer platform for direct use by lawyers and their law firm staff. Similar to a cloud-based Client Management System, but specifically focused on creating demand letters that maximize settlement offers.
This is different from our prior company started in 2010 (Auto Claim Experts) which was a demand letter consulting company that did the work for attorneys. But, that service was $200 / hour and we could never find sufficient staff for us to handle the workload of the law firms that wanted to work with us. For that reason, we felt that making a cloud-based demand letter platform, that provided our expert insights to selected personal injury law firms, would help those law firms achieve the best results.
Lawyers, paralegals, or legal assistants go through the records and bills and enter the information into the program. Settlement Intelligence asks additional questions depending upon your entries. At the end of the questions, Settlement Intelligence generates the demand immediately. So, there is no waiting for someone else to finish the work.
Question: If your Settlement Intelligence requires me or my staff to input data from the medical records - records that will be provided to the insurance adjuster when making the demand - the adjuster will already have all the data that they need. So, to be sure I understand, the value proposition for your platform is that it speeds up the process for adjusters to input data into their own system, which should result in faster settlement?
Answer: It is a great question, but it incorrectly assumes that the information in the medical records gets added into the insurance claim software fully and correctly. Our background suggests this is an incorrect assumption. Instead, we have evidence to suggest two things:
- In the only non-protected research we are aware of into adjuster entry accuracy in insurance claim software for “value drivers” in auto cases, the result is that 0% of cases were accurately entered by adjusters across a large insurer. That’s right, 0% of cases were entered correctly with all injuries, symptoms, and treatment factors of value in their own claim evaluation software.
It is our responsibility as lawyers to know and enter all of the factors of value in our clients cases. Clients hire personal injury lawyers for expertise in settling cases, or trying cases, and this is the way settlement offers are determined. If you are settling cases and don’t understand what the insurance company is providing value to, and how to communicate that effectively to get the best settlement offer possible, you aren’t providing the expertise your client is paying for. What Settlement Intelligence does is guide you to find and request all factors of value in the way an insurance adjuster will understand, in a way that will prompt them to enter the information fully so that you can obtain maximum value on your settlement offers.
If the insurer refuses to enter the data you provide in the demand letter based on the records (which we reference in our demand format) it’s an intentional refusal to evaluate the claim correctly and can constitute insurance bad faith depending upon the laws of your state.
- The insurers have historically only required adjusters to use a two page “dissection sheet” to mine data from the claim file prior to entry of that data into their software. We’ve seen the dissection sheet. Most of these contain 60 factors total, despite the software systems they rely upon having 12,000+ factors. What Settlement Intelligence is doing is guiding lawyers and their staff to find and enter all data of value to the claim. Things that the adjuster may have seen in the file but maybe doesn’t even know is a value driver. And there are over 11,000 that the adjuster is not required to find in the file. So, Settlement Intelligence is recreating our expertise in getting the financially compensated factors into your demand letters correctly to result in higher settlement offers while being 100% honest about the claim.
The Settlement Intelligence demand format is generated in the format that feeds the adjuster the information they need in the order that the software requests it from the adjuster. If you have credibility with the adjuster or you can develop that credibility by honestly guiding them through the case and making it easier on them to find the information they need, it also helps speed up offers. We always caution to never put anything in the demand that isn’t supported, so that they can trust and follow your demand.
By contrast, many of the former adjusters and supervisors tell us they don’t read medical timeline style demand letters because that format doesn’t give them anything they can’t gather from reading all the records themselves.
Question: Does Settlement Intelligence have inputs for claiming loss wages and out of pocket expenses?
Answer: The Settlement Intelligence platform follows the way damages are calculated in insurance claim software and the pattern jury instructions of most or all states; it is looking at total costs in certain categories like medical bills, pharmacy costs, medical suppliers, transportation, wage loss, etc. So, “out of pocket” isn’t covered outside the definitions of economic damages. If you have a situation not covered in the program we can add an additional field.
Keep in mind that not all costs (particularly personal or litigation loans) paying for certain costs of living are not damages in litigation unless there is a compensable damage that the loan is replacing. Here is an example; if a retired person is injured and takes out a loan for personal costs (mortgage / rent, food, etc.) after the injury, that is not a compensable loss because you can only get compensation for what was lost as a result of the incident. If the person is truly retired, a loan to cover costs that were not already being covered by income, the client cannot be compensated for that “out of pocket” cost. Same with the initiation costs and interest on litigation loans. So, we do not have “out of pocket costs” as a line item in the demand. If you believe we are missing categories of damages that are compensable under the laws of your state, please let us know and we can add this information.
Question: Does Settlement Intelligence have auto-generated fields for future diminished earning capacity?
Answer: No. For a very important reason; if you do not have a doctor or other expert supporting a claim within the demand, the adjustor cannot enter the information. One of the basics of claim adjusting is that lawyer allegations without support cannot be entered in the insurance software or considered for compensation. So, anyone can project any amount of future loss for their client, but without support from an economist evaluating that specific case, the adjustor will not enter the information.
Statistical projections of future diminished earning capacity has been available on the internet since the early 2000s (or earlier), but using these reports without an expert opinion on your client’s specific case provided no claim value.
What these economic projections could do, however, is expose you to malpractice if you don't hire an economist to support the diminished earning capacity claim. Because if the demand letter you send on a case is seen by the client and your demand letter projects $1,000,000 diminished earning capacity and then you settle for $25,000, it will look like you were negligent in handling the claim.
If you have a doctor, voc rehab expert or economist providing opinions about future medical costs, and future diminished earning capacity, Settlement Intelligence provides you the ability to enter that information and cite the expert supporting the claim. But, to claim a large future loss with no expert substantiation just damages your credibility and will not result in a higher offer unless the injury is so obvious that the adjustor knows there will be a future loss of earning capacity (such as in a death, quadriplegia, amputation or other catastrophic injury claim where the past and future wage loss is obvious.)
Question: Does Settlement Intelligence have auto-generated fields for future medical costs?
Answer: No, we do not auto generate future medical costs without your client having an expert witness supporting that claim. As discussed above, if you do not have a doctor or other expert supporting a claim in writing, the adjustor cannot enter the information.
If you have a doctor, voc rehab expert or economist providing opinions about future medical costs, Settlement Intelligence provides you the ability to enter that information and cite the expert supporting that claim. But, to claim large future medical bills with no expert substantiation just damages your credibility and will not result in a higher offer.
Question: Does Settlement Intelligence generate a final demand offer in total dollars, or does it leave that up to the firm inputting the data to select a number? I know EvenUp does that.
Answer: We do not offer a recommended settlement range for very good reasons. The owners of Settlement Intelligence have a deep understanding of the plaintiff bar, and how claims are actually evaluated. Settlement Intelligence is co-owned by a plaintiff lawyer who has reviewed over one million documents on insurance claims practices, and the founder of Trial Guides (as opposed to the founder of EvenUp being a defense lawyer). We know that proposing a settlement amount is not advisable. There are several reasons.
All lawyers are tracked by federal tax ID number, and litigation history. This has historically been tracked in internal insurance company software, but more recently this information has been expanded by a program called Premonition, and integrated into Colossus and Liability Navigator – programs used to evaluate claims by many of the top insurers. As a result, it appears that information on plaintiff lawyers is now shared across companies and platforms, as well as containing information from court documents on motions and jury verdicts, and including data from jury verdict reporting agencies. This is factored into the settlement offers to you and your clients.
Every lawyer has a different reputation. There are at least five tiers of plaintiff lawyer quality, and the same case with a lawyer in each of those five tiers will have five different values. In reality this is more of a continuum of lawyer quality and impact on settlement offer.
But to have a program predict claim value in a case the same for a lawyer working in a high volume law firm that has a history of settling every case no matter how low the offer, and suggest that the settlement value will be the same as if the same client is represented by Brian Panish, Mark Lanier, Rick Friedman, Nick Rowley, or another elite trial lawyer that obtains massive trial verdicts, makes no sense. Insurers do not apply the same value to those two types of lawyers. This is why using comparable jury verdicts makes no sense unless it is the same lawyer or a lawyer with a very similar performance history.
There is a section in Settlement Intelligence for lawyer history, as you may have information about your trial and arbitration history that is outside the insurer’s internal or external database that could be important to the evaluation of your claims. If you do not have trial history, we do suggest that you associate trial counsel in the event a settlement offer is not sufficient. It is critical to settlement offer value to either try cases yourself, or establish a working relationship with one or more trial lawyers who will go to trial if the insurer does provide a sufficient settlement offer.
Venue also impacts claim value. Settlement Intelligence has an entry for the venue based upon the way it is handled within the insurance claim programs.
Question: Are we able to include photos in the Settlement Intelligence platform and then have them load into the demand letter?
It is a great question. We went down this road with development and can insert photos into the demand through the platform, but we chose not to enable this feature. The reason why is that in order to insert photos in Word from the platform, we had to set a layout (vertical or horizontal) and specified size for the photo that the program could reproduce in every demand letter. We realized the photo insertion was more challenging within the program than taking the generated Word document and inserting one or more photos into the demand letter, moving it and reformatting size.
Looking at the thousands of demand letters we’ve done over the past 20 years, the use of images is highly variable. Sometimes with vehicle damage you want 1, 2 or 4 photos on a page. It is easier to just drag those into Word and resize as you wish. The same with injury photos, imaging screenshots, or illustrations. In some cases they need to be small, and other times you might want to use the entire side of the page for a picture of a long bone fracture.
We are big believers in using visuals in demand letters. But it is simply easier achieving your desired layout for images in Word itself.
Question: What is the licensing period?
Answer: The minimum licensing term is one year. The licensing fee is paid monthly to make it more accessible to firms who cannot pay an annual fee. The licensing amount on the web site is stated per month.
Question: Is the platform live at this time? I'm thinking about licensing it for my law firm.
Settlement Intelligence is live. There are very successful law firms already using the platform on their cases, and we are onboarding law firms presently.
We have not yet released the Enterprise package yet, but will do so once a large law firm is ready for a customized version where they have a large number of employees who need to run unlimited demand letters. Licensing for the Enterprise plan is on a custom basis, and dependent upon the number of users and the anticipated volume of demand letters. Please contact us here to get a quote and demo of Settlement Intelligence.