MEDIATION – PRICEY OR PRICELESS?

I’ve attended a number of mediations during my career, most of which are multi-party and multi-carrier.  “Done right” the savings can be substantial in terms of both direct costs and the avoidance of unpredictable verdicts.  An effectively conducted mediation can propel a stubborn dispute forward.  Even if resolution is not achieved in one session, the work done is the catalyst for eventual success.  It can be priceless. 

On the other hand, a poorly conducted mediation can stop progress in its tracts in which case the effort can become a bit pricey and wasteful.

How is mediation “done right”?  The following is not exhaustive, of course, but they do capture some hot-button issues, at least from the perspective of this claim professional.

First, “doing mediation right” means doing it at the right time.  Premature mediation wastes time and money and can poison future negotiations.  Conversely, convening one late in the process, while better late than never, nullifies, to some extent, the primary benefit of cost avoidance.

Particularly irritating is the inflexible case management order.  Forced mediation, oxymoronic to say the least, under the threat of sanctions is anomalous to the underpinnings of a successful voluntary effort with motivated parties, cooperation, open mindedness, and a willingness to compromise. A forced mediation is obviously contrary to the voluntary nature of mediation and jeopardizes the good will necessary for success.  While case management is certainly important to the litigation process careful thought should be given to the mediation timetable.

Second, the mediation should be of sufficient duration and structured in an efficient way so that time is used most effectively.  Posturing and histrionics are major irritants and time-wasters.  They are counterproductive.

Third, prepared decision makers should attend.  The claim professional should have sufficient authority in terms of money and ability to make concessions or other decisions, and not merely be a conduit between parties at the mediation and the insurance company.  Sufficient authority is not necessarily tantamount to policy limits authority and a claim professional should not be precluded from making a phone call or two to the company to discuss, consult, and seek guidance when necessary.

Fourth, preparation is essential and it begins before the mediation.  Pre-mediation homework is vital.  This means that each party must understand the other side’s position.  And it is imperative that the mediator actually read the submissions prior to the session.  Furthermore, if there are coverage conflicts in multi-party mediations involving several carriers, they should be addressed prior to the mediation session, in a separate mediation if necessary.

Fifth, good mediators are priceless.  What is a good mediator?  He/she should be knowledgeable about all aspects of the dispute, including technical issues.  He/she should be skilled in conflict resolution.  Communication skills are critical. The mediator should be able to laser focus on the issues that divide the parties and, similarly, should be able to exploit any commonalities.  While biases are an unavoidable part of the human condition, an effective mediator will recognize and guard against these biases.

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