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Breaking Through Barriers

For a successful mediation, communication and preparation are keys

January 15, 2020 Photo

When it comes to mediation, there is no one-size-fits-all approach. Regardless of the case, though, the key to a successful mediation is preparation and communication.

Preparing for the mediation should always include knowing the facts of the case from beginning to end and front to back. But there are additional considerations and questions that are often overlooked. For example, are there coverage issues, deductibles, or self-insured retentions that could impact negotiations? Are there multiple insurance policies applicable to the loss? If there are multiple defendants, then are there issues regarding apportionment of liability? These questions should be addressed well in advance of mediation so that a strategy—agreed upon by both the carrier representative and counsel—may be formed and a united front can be displayed when in the mediation room.

Identifying potential issues will also help in the selection of a mediator. If coverage is central to the negotiation, then having a mediator who is experienced in coverage matters is paramount. Once a mediator is chosen, it is important to communicate to her all of the potential impediments to resolution before mediation begins. Surprises on the day of mediation often derail the negotiations, wasting time and resources.

One effective way of communicating with the mediator is through a mediation statement. These can be open statements (provided to all parties) or closed (confidential between the party and the mediator).

Be aware, however, that mediators are often busy and do not have time to study lengthy statements. Providing a general, high-level summary of the facts, legal issues, and potential impediments to settlement followed by a telephone conference is the most effective way to educate the mediator. In complex cases, it is often necessary for the mediator to begin working through impediments to settlement prior to mediation so that the time at mediation is productive.

As a general rule, it is imperative to have the plaintiff present at the mediation. It is important to note, however, that the plaintiff is not always the primary decision-maker. In some instances, it could be a plaintiff’s relative who is “calling the shots.” Understanding this dynamic and inviting all relevant decision-makers to mediation provides the greatest prospect for resolution.

Is it useful for the claims professional to attend? In some states, a claims professional is required at mediation, but agreements can be reached to have them attend by phone. Generally speaking, having a claims professional present humanizes the insurance company in the eyes of the plaintiff; allows the claims professional to better understand the facts and experience the dynamics of the case; allows the claims professional to evaluate plaintiff and defense counsel; and facilitates a more efficient mediation. Ultimately, a cost-benefit analysis should be considered in each case.

With the key players at the table, the next consideration is whether to deliver an opening statement. Some attorneys have moved away from delivering these, feeling that they merely fill up time that could be better spent negotiating, but we believe this can be a mistake.

The opening statement is a powerful tool and should be used strategically. This may be the only time prior to trial that all relevant parties are in the same room. Accordingly, opening statements provide defense counsel with the opportunity to educate the plaintiff regarding vulnerabilities in her case and the risks of going to trial. The plaintiff, in turn, can present directly to the defendant, giving the defendant the opportunity to validate the plaintiff’s pain and suffering, which is likely to generate more positive communication between the sides.

Given the importance of the opening statement, careful attention should be given to preparation and delivery. The defense counsel and claims professional should discuss the content beforehand, and it is often beneficial to meet in person before the mediation to coordinate strategy.

An effective presentation must take into consideration more than the facts and law. A holistic approach considers the personalities of the parties involved (plaintiff, other defendants, opposing counsel, and mediator); the potential emotional and other intangible factors that might surface; and what outcome the plaintiff and her family wants or needs. Understanding these things will help you prepare effective content, and, just as importantly, a tailored presentation. How you communicate your argument matters as much as the argument itself.

Once the mediation has started and both sides have delivered opening statements, it is time for the negotiations to start. It is usually a good idea to solicit an opening demand ahead of the mediation so there is no surprise from the other side at the beginning. This allows all sides and the mediator to be more prepared. It also facilitates a more productive and expeditious mediation process.

During negotiations, you do not want a mediator who is simply shuffling numbers from room to room; you want a mediator who is working each room and pointing out the weaknesses of the parties’ respective positions. A mediator cannot be effective in this regard unless that mediator has the requisite experience to understand the issues and how they are likely to play out.

Ultimately, most cases settled at mediation are resolved somewhere during the eigth-to-tenth round of negotiations, and some much later than that, meaning a successful mediation may end long after business hours. Too often the parties grow impatient and deem the process a waste of time, but there is value in the process. The longer the parties negotiate, the more committed they are to a resolution.

When negotiations begin to stall, a good strategy to regain momentum is “bracketing.” Essentially, when a party presents a bracket, that party is suggesting that it will move to number “X” if the other side moves to “Y.” Those who disfavor bracketing feel that it signals a mid-point number between “X” and “Y” where the case will settle, even when that is not necessarily the case. In other words, they believe bracketing can create false hope. But no two cases are the same. Bracketing may not be appropriate or beneficial in some cases, but in other cases it can be a useful technique for breaking an impasse and advancing negotiations.

If mediation ends in an impasse, all is not lost. Further dialogue may continue post-mediation and it may be helpful in some instances to keep the mediator involved. A mediator’s proposal can be an effective tool, especially when the plaintiff is not being reasonable. On the other hand, sometimes direct dialogue with opposing counsel, unfiltered by the mediator, is the best way to break a stalemate.

In the end, preparation and communication are keys to effective mediation. The work done prior to mediation is equally, if not more, important than the mediation itself. That work, coupled with an effective presentation, a pre-planned negotiating strategy, and the help of a knowledgeable mediator are the ingredients of a successful mediation. K

This article is intended for informational purposes and the views expressed herein are those of the authors and do not necessarily reflect those of Sompo International.

About The Authors
Multiple Contributors
Niva Harney-Hiller

Niva Harney-Hiller is partner at Hamilton, Miller & Birthisel LLP. nharney@hamiltonmillerlaw.com

Nick Grinnell

Nick Grinnell is assistant vice president, primary casualty claims, at Sompo International Insurance. 

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