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 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.

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.

Impasse — A Mediator’s Opportunity

 The mediation has gone on for hours.   The parties have negotiated slowly and methodically, but remain far apart.  The negotiations are not in the “zone of agreement,” the mediator’s term for closing in on a settlement amount.  The negotiations have reached an impasse. Governing Impasse occurs to one degree or another in nearly every mediation. …

What It Takes to Settle

I am a true believer in the evaluative approach to mediation.  I not only enjoy engaging counsel and the parties in a discussion of the issues in a case, but I know that this discussion will eventually lead the parties down the path to settlement of the case.  When the actual negotiation begins, I am a proponent of a principled negotiation in which the settlement offers and counter offers are tied to the evaluation of the issues of the case and the likelihood of success or failure at trial.  But the evaluative method only goes so far.  It is an effective way to narrow the gap between the parties, but it may not be enough to close the gap.  I see this routinely in cases where one party has a much stronger case than the other and in light of the strength of the case and based on the evaluative approach, that party’s last and best offer is close, but not enough to settle the case.  The reason lies in the mediation process and the psychological effect on the party with the weaker case of having the mediator consistently holding up the mirror to the case and working that party up or down during the course of the mediation.  Ultimately, I hear the refrain, “they just don’t respect us and our case.”  In spite of my efforts to persuade counsel and party that it is not personal.  It is personal for them.

After the evaluative method has been exhausted, and the parties have narrowed the gap between them, the question on the table is what does it take to settle the case.  Should the party with the stronger case, make a final effort to bridge the gap?  Is there a settlement premium that should be paid or accepted?

I believe that there is a settlement premium that comes into play and should be seriously considered for a number of very important reasons.

1.  The evaluation approach is not science.  Reasonable minds can differ.  There is the old adage that even the best case has no better than 80/20 odds attached to it and no one could quibble with the odds dropping to 70/30 or even 60/40;

The Ethical Neutral: What Must Be Disclosed In Mediation (via Law360)

A mediator with a national practice and decades of litigation experience, Bruce Friedman often contributes his thoughts on the Alternative Dispute Resolution process to well-respected legal publications. In this Law360.com article, Bruce addresses the confusion among lawyers and mediators over conflict-of-interest and disclosure requirements applicable to mediators in California. “Lawyers and mediators must know and…