Making Mediation Work for You

Benefits and rules to successfully mediate claims

Mediation is a process that can be employed pre- and post-litigation to settle claims. A successful mediation requires upfront work and effort, as well as good faith and settlement authority. The selection of a mediator is also critical. This article provides an overview of the practices employed to successfully settle claims.

Making Mediation Work for You

Mediation is growing in popularity throughout the country as a viable alternative, in most cases, to litigation.  There is a wide range of approaches and styles that different mediators will use.  The following article will provide an overview of what is most common in mediation and how mediation can work for you.

I. Mediation Defined:

1. Mediation is a process in which parties with a conflict attempt to reach an agreement that is mutually acceptable, assisted by a neutral person, the mediator.  The mediator does not represent any party during the negotiations.  The process is non-binding unless and until the parties reach an agreement to which they are willing to be bound.
2. During mediation, parties are assisted by their attorneys.  Parties with counsel spend time with the opposition and the mediator (the “joint session”) and usually spend other time in private sessions (the “caucuses”) with the mediator.  The mediator usually engages in “shuttle diplomacy,” carrying offers back and forth among the parties.  The mediator urges the parties to keep negotiating, even when frustrated, to resolve the matter, to avoid the uncertainties of trial and the delay and expense of further litigation.  Matters discussed in the caucuses are confidential from others, unless the parties permit the matters to be revealed to the opponents.
3. Matters may be referred to mediation by the courts or by agreement of the parties, during or prior to filing suit.  When the dispute is in suit, all negotiations during the mediation are privileged from the court (as provided by applicable law).  The mediator communicates with the court only as to logistics and to report the final result of the mediation, i.e., whether the case settled or not.  In addition, the negotiations in mediation are confidential, not to be disclosed to non-parties by the mediator.

II. When Is The Best Time for Mediation?

1. Once the claimant’s financial damages can be reasonably established and a settlement is stalled for whatever reason.
2. It is not necessary for the claimant to complete medical treatment.  As long as future medical treatment can be reasonably determined in length and cost.
3. It is not necessary for you and the claimant’s attorney to become stalemated at negotiating an amount of loss.  Many times attorneys haven’t worked on their file and may be slow to answer phone calls.
4. It is not necessary for a lawsuit to be filed before mediation.
5. It is not necessary for your attorney to be involved in the mediation just because he has filed an answer.

III. Pick the Right Mediator for Your Case

1. Get the mediator’s  resume and take the time to personally interview him or her in person before you agree to use the mediator..
2. Be careful in using a retired judge (they can’t stop judging) or letting a mediation company send a mediator out blind.  They tend to leave the case in worse condition than they found it by giving an opinion or evaluation.  Also, choose a part-time lawyer-mediator with care.  Remember, they are still practicing law and have clients with vested interests that are either plaintiff-or defendant-oriented, or both.
3. If court ordered, have a list of acceptable mediators in hand that are agreeable to you.  If a mediator is named in the order, still interview him or her and if you don’t like the proposed mediator, advise the judge and the other side in writing.  Ask to choose another one by agreement with all parties.
4. Remember, you’re paying half his or her fees and have rights.  If necessary, personally interview them jointly with plaintiff counsel before agreeing to use any of them.  Ninety percent of the time, you and plaintiff counsel can agree on one if you take the time to interview at least three mediators—ask around—who is good?
5. Follow your instincts on whether he or she is competent, fair or “leaning.”
6. Examine him or her carefully on the number of mediations he or she has done, the dates, types,  and the settlement rate.
7. Note the percentage of mediations where he or she was requested by the defense or the plaintiff to be the mediator.
8. Check out two defense references and two plaintiff references.
9. Ask the mediator about his or her procedures, fees, and  affiliations with mediation companies and law firms.

 IV. Order to Participate in Good Faith

The referral order in Decker v. Lindsay, 824 S.W.2d 247, 250 (Tex. App. 1992), also ordered the parties to “commit to participate in the proceedings in good faith with the intention to settle, if at all possible.”  The appellate opinion found this a violation of the open court’s provision of the Texas constitution because a court cannot require the parties “to negotiate.”  One might question whether the order to participate in good faith should be construed as ordering the parties to negotiate, rather that simply requiring them to present their arguments and listen to the other side without having to make offers or otherwise negotiate.

Some state statutes have included a “good faith participation” requirement for court-ordered alternative dispute resolution (ADR).  Some courts have ordered the parties to participate “in a meaningful manner.”  One option is for a court simply to order the parties to participate and leave it to any future motion seeking sanctions for failure to comply to determine whether there has been a failure to satisfy a minimal level of participation that rendered the process a futile exercise.

V. Requirement to Attend with Settlement Authority

Court referral orders to ADR often require the parties to attend with authority to settle the case.  Many orders of referral to mediation contain the express requirement that organizations or agencies “Be represented by an officer or representative with authority and discretion to negotiate a settlement.”  (Remember, you can have policy limit authority, but no one can force you to use it.)

The ADR act does not address the issue of what persons must attend when a party is a corporation, governmental body, or organization and as to whether representatives of such non-personal parties must possess full authority to settle.  There is, however, a growing body of case law on these issues.  For Example, the fifth circuit in In re Stone,  986 F.2d 898 (5^th Cir. 1993) (per curiam), recommended a “practical approach” to settlement authority requirements imposed on governmental bodies, such as allowing the official with ultimate authority to be fully prepared and available by telephone at the time of the conference.

VI. Mediation Rules

Rules for Mediators (ABA, SPIDR, and/or your local and state rules may vary)

1. Definition of Mediation.  Mediation is a process under which an impartial person, the mediator, facilitates communication between the parties to promote reconciliation, settlement, or understanding among them.  The mediator may suggest ways of resolving the dispute, but may not impose his or her own judgment on the issues for that of the parties.
2. Conditions Precedent to Serving as a Mediator.  The mediator shall not serve as a mediator in any dispute in which he or she has any financial or personal interest in the result of the mediation.  Prior to accepting an appointment, the mediator shall disclose any circumstances likely to create a presumption of bias or prevent a prompt meeting with the parties.
3. Authority of Mediator.  The mediator does not have the authority to decide any issues for the parties, but will attempt to facilitate the voluntary resolution of the dispute by the parties.
4. Parties Responsible for Negotiation Their Own Settlement.  The parties understand the mediator will not and cannot impose a settlement in their case.
5. Authority of Representatives.  Party representatives must have authority to settle and all persons necessary to the decision to settle shall be present.
6. Time and Place of Mediation.  The mediation shall fix the time of each mediation session.  The mediation shall be held at the office of the mediator, or at any other convenient location agreeable to the mediator and the parties, as the mediator shall determine.
7. Privacy.  Mediation sessions are private.  The parties and their representatives may attend mediation sessions.  Other persons may attend only with the permission of the parties and with the consent of the mediator.
8. Confidentiality and Privilege.  All records, reports, or other documents received by a mediator while serving in that capacity shall be confidential. 
9. No Stenographic Record.  There shall be no stenographic record of the mediation, and no person shall tape record any portion of the mediation session.
10.       Nor Service of Process at or Near the Site of the Mediation session.  No subpoenas, summons complaints, citations, writs, or other processes may be     served upon any person at or near the site of any mediation session upon any person entering, attending, or leaving the session.
11. Termination of Mediation.  The mediation shall be terminated (1) by the execution of a settlement agreement by the parties; (2) by declaration of a mediator to the effect that further efforts at mediation are no longer worthwhile; or, (3) after the completion of one full mediation session, by a written declaration of a party or parties to the effect that the mediation proceedings are terminated.
12. Interpretation and Application of Rules.  The mediator shall interpret and apply these rules.
13. Fees and Expenses.  The mediator’s daily fee, if agreed upon prior to mediation, may be paid in advance of each mediation day.

VII. Benefits of Mediation

Generally, the more quickly a case settles, the less the case will cost in administrative and legal expenses.  In theory, a mediation brings together everyone needed to make a binding decision in the matter.  Mediation can usually be scheduled within a matter of days.  The mediation also presents a good opportunity to evaluate the claimant’s credibility, evidence, position, and strategy.  In general, mediation represents a safe, low-cost attempt to resolve matters in a fair and efficient manner.

[author] [author_image timthumb=’on’]http://www.mediate.com/mediator/photos/cl11348_150.jpg[/author_image] [author_info]James L. Stovall has been a mediator since 1987.  He is director of training for The Mediation Institute in Oklahoma City.  Mr. Stovall holds a Master of Divinity from Phillips Theological Seminary, a BA from the University of Illinois, and attended Louisiana State University Law School.  He is a member of the Association for Conflict Resolution and is a member and past president of the Oklahoma Academy of Mediators and Arbitrators. Mr. Stovall and can be reached at j_stovall@site.net or (405) 607-8914.[/author_info] [/author]