Making the Most of Mediation, Part 2

Editor’s note: The following is the second of a two-part series on successful mediation practices. The first part appeared in the June 3, 2013, edition of Insurance Journal – South Central.

More litigation is resolved by mediation than by jury trials. Because of this, it is very important that insurance professionals understand the mediation process and learn how to make it effective.

William Moye, an insurance defense attorney and a partner in the Houston office of Thompson Coe Cousins & Irons LLP, recently met with several of the most respected mediators in Houston to discuss their thoughts on successful mediation.

The first part of this series addressed preparation. Below is a summary of suggested best practices for making the most of the actual mediation.

Attending the Mediation

A common request from the mediators is that the claims handler should physically attend the mediation in person.

It is extremely helpful to have the person with the actual authority to settle the case physically at the mediation to make quick decisions. Additionally, the adjuster’s attendance shows the opposing side that the mediation is important and you are truly seeking a settlement.

While there are certainly reasons that may prevent attendance, the adjuster’s physical presence can pay dividends for more significant matters.

If attendance is by phone, then try to make sure the entire session is attended, including the opening session. A lapse in availability slows the entire process and could be the difference in whether a settlement is reached.

If the claims professional cannot attend the mediation, or even if attendance is by phone, have the person in attendance for the carrier (e.g., attorney, third party administrator) explain directly to the claimant why their attendance was not possible or necessary. This reinforces to the claimant that the carrier finds their case important.

Opening Statements

The mediators agreed that opening statements matter. Many times, the parties become so entrenched in their positions, or have such disdain for the opposing attorney, that a request is made at mediation to forgo an opening session.

Some attorneys/carriers feel that an opening statement is too adversarial and will disrupt settlement negotiations before the mediation even starts. However, this is usually untrue and, as expressed by the panel of mediators, skipping the opening statement is a crucial mistake.

The statement provides background and context to the dispute for the mediator. Skipping it can serve to destroy the mediator’s appearance of impartiality if he or she is the first person to deliver your argument to the opposing side.

Under most circumstances, the opening statement is not too adversarial to affect negotiations. In fact, it is a way to explain your side of the case in a less adversarial forum than in the courtroom. With that said, firmness and candor is acceptable, but it is not beneficial to go “scorched earth” in a response to plaintiff’s opening position. This may be the one and only chance that the carrier/defendant has an opportunity to speak to the party bringing the claim directly. A properly managed opening session can actually be the difference in settling a case.

Another repeated comment was a suggestion that it is allowable to simply say: “We are sorry for what happened.”

The mediators also suggested that many attorneys/carriers report a wish to skip the opening statement so they can move right to the negotiations and save time. This is often mistaken as the mediator will then use additional time getting up to speed on the issues as he moves from room to room. The opening statement allows all of the issues to go in front of the mediator at the outset.

Don’t Fear the “Bracket”

What can you do when the other side is way too high in their demands and inching up from your position is not successful? Offer a bracket. A bracket can be used to quickly “get the ball rolling” in negotiation by taking away large chunks of the difference between demand and offer. The mediators simply asked that if the midpoint in any bracket offer exceeds the authority to settle the case, let them know that so that they can properly communicate the offer to the opposing side.

Let the Professional Help

Keep in mind that you are paying for the assistance for someone to settle your case. The mediation fee is far too expensive to simply have the neutral ferry offers and demands between the caucus rooms without offering their professional advice. If a mediator has a suggestion, listen to it and try to understand why it is being offered. You do not have to agree with or follow the advice given, but more likely than not there is a reason why a suggestion is made.

Every Communication Does not Have to Go Through the Mediator

There is a benefit for either the opposing attorneys or adjusters to speak among themselves during a mediation. This is especially true if the two individuals have a good relationship with each other. Having a one-on-one discussion can speed up settlement by cutting through certain issues that are no longer in debate. This process is much slower if that communication has to pass through the mediator. This will allow the mediator to focus on the more complex or disputed issues.