As Featured on Law360: Shepherding Insurers Through The Mediation Process

In a recent Law360 article, mediator Bruce Friedman discusses ‘Shepherding Insurers Through The Mediation Process’.

While insurance lawsuits involving claims directly between an insurance company and its policyholder make up a relatively small percentage of our courts dockets, cases triggering liability insurance from automobile accidents to securities class actions constitute a very large percentage of all cases before our courts. Settlement of these cases requires the proper shepherding of the insurer(s) defending/covering the case. The participation of the insurer(s) at the mediation is necessary to the ultimate resolution of the case. The challenge is making sure that the insurer(s) are prepared to participate in the mediation in a meaningful way.

Mediation of Insurance Coverage Cases

Resolving insurance coverage disputes through mediation requires exposing careful assessment of three unique elements: the insurance policy, the rules applicable to the application of the policy and the cases construing the policy. Evaluative mediation provides the best approach for resolving these disputes. It requires parties, counsel and the mediator to evaluate the strength and weaknesses…

The Biology of Decision-Making

It is a common understanding among trial lawyers that decisions are made emotionally and not rationally. We are always looking for the emotional hook on which to hang the case and sway a jury to see the case through that emotional prism. Now science is teaching us that decision-making is actually physical. In a recent…

The Antidote to the Spiteful Litigant

We have all encountered the spiteful litigant. Maybe it’s the husband in a divorce who says that he is going to Las Vegas and putting the marital estate on red or black at the roulette wheel. If he wins he will split it with his ex; if he loses, neither of them get anything. Or perhaps it’s a partner in a dispute that says that he would rather the business fail then have to share its value with his soon to be ex-partner; or a litigant that states that he would rather drive the defendant into bankruptcy even if it means that he would not recover for his injuries.

How does one deal with spite in the context of a mediation? Recent scientific studies of spite provide the answer. Spite is defined as the urge to punish, hurt or humiliate another, even when one gains no obvious benefit and may well pay the cost. New research summarized in a recent New York Times article concludes that spite is both a vice and a virtue that may be linked. Not surprisingly, in one survey conducted by David K. Marcus, a psychologist at Washington State University, spitefulness generally cohabited with traits like callousness, Machiavellianism and poor self-esteem.  Spite is not associated with agreeableness, conscientiousness or guilt.

The Mediator’s Proposal: The Ultimate Impasse Buster

The end of the day is nearing and the mediation has ground to a halt.  The parties have narrowed the gap between them, but cannot close it.  Is it time to suggest a mediator’s  proposal?  Does a proposed settlement amount coming from the mediator have a reasonable likelihood of acceptance?  Are the parties interested in having the mediator make a proposal?  If the answer to these questions is yes, then it is time to employ the ultimate impasse busting technique, the mediator’s proposal.

But what amount should the mediator propose?  Splitting the difference between the last demand and offer has undoubtedly been discussed with the parties and rejected.  Otherwise, a mediator’s proposal would not be necessary.  How does the mediator avoid the appearance of favoring one side over the other when the contemplated mediator’s proposal is closer to one party’s last position than the other’s?  Should the mediator have a reasonable degree of confidence that the plaintiff will accept the proposed amount?Should the mediator have a reasonable degree of confidence that the defendant will pay the proposed amount?   Is one of these factors more important than the other?

Negotiation with the Mediator – Another Impasse Buster for Your Consideration

You have reviewed and analyzed the mediation briefs and the parties have disclosed prior settlement negotiations and where they would like to end up at the conclusion of the mediation; or the parties disclose to you during the course of early caucus meetings what they would accept or pay in settlement.  Often, their goals are simply not in the same ballpark and a traditional negotiation, a series of demands and offers may not be the most productive way to proceed.  In fact, it may be a very counterproductive method of trying to resolve the case.What about having the parties negotiate with the mediator instead of one another?  Instead of carrying a non-starter demand or offer to the other side, why not tell the plaintiff that based on your discussions with defendants, the amount that they are seeking is not in the range that defendants will pay.  Of course, this can only happen after you have had a discussion with the defendants so that you can confidently make such a statement.  The discussion will then turn to why the plaintiff’s contemplated demand is too high in an effort to get the plaintiff to give the mediator a more realistic figure.  The same discussion then occurs with the defendant as to why their contemplated bottom line is not realistic and does not properly assess the risk of loss.