Written by Paul M. Iacono, Q.C.
Once an insurer makes the decision to participate in a mediation, think of it as an event that requires teamwork. Everyone who participates in the session will contribute to the resolution of the dispute. The parties, the lawyers and the mediator, all have the same objective. That goal is the resolution of litigation.
Why are cases involving subjective injuries so challenging, to lawyers and claims handlers alike? There is an entire spectrum of disorders under this heading, and they are quite varied; from PTSD, fibromyalgia, traumatic neurosis, to minor traumatic brain injury etc. They are difficult cases for both sides, because these damages must be proved in accordance with legal principles, in a court room. These allegations form the basis of a lawsuit. A lawsuit “is not a scientific search for the truth, it is a search for proof.” As in he who has the best proof wins. These cases can be explosive, the lawyers on either side of the issue, must hold a bottle of nitroglycerin, without spilling a drop till the very end of the trial. They are cases that are fraught with risk for both sides. The more risk there is in a lawsuit, the more imperative that it should be settled.
So, what is proof? In these claims it all starts with the plaintiff. Is the plaintiff a good witness? The key evidence on the injuries comes from the plaintiff. There are no x-rays there are no bumps and bruises there are no objective scans.
When a person starts talking about all their aches and pains, all their limitations in their activities, the things they did before and now cannot do, will they be believed? Assessing the credibility of the plaintiff is the paramount task of counsel and claims handler. The opportunity for the defense to assess the credibility of the plaintiff occurs at discovery as well as at mediation. Given how important this is, it is vital that the style of the mediation gives the defense opportunities to interact with the plaintiff. It is therefore important that you choose a mediator who can engage the plaintiff and encourage the plaintiff to participate in the mediation. Even more important in these kinds of cases, especially those that are psychologically-based is to afford the plaintiff an opportunity to speak and to have a “catharsis,” if that is necessary.
Individuals with these kinds of complaints, have a latent belief that a court action will vindicate them. They need to be heard. The mediation must be an opportunity for them to tell their story, describe their suffering and their problems, just as if they were testifying. For them this is a very important part of the process. When this happens the defense must be very patient, and listen and show empathy. (Be sincere whether you mean it or not) The more the plaintiff talks the more you will learn about him or her. Sometimes the plaintiff will talk too much, and this detracts from credibility, Shakespeare said it best: “the lady doth protest too much.” If you are faced with that kind of a plaintiff, let them talk, I would even encourage them to talk, so that you can point out to their lawyer, that this kind of evidence will not go over well. Simply because when you match all these complaints with a plaintiff who is very presentable and looks perfectly healthy; it does not add up. It stretches the credulity of the trier of fact.
On the other hand, good plaintiff’s counsel recognizing how important it is to have a plaintiff who is a good witness are happy to let their clients present themselves and their case.
Having made these comments about the importance and role of the plaintiff, I want to step back and describe preparing for mediation.
The first place for the claims representative to begin is your own file, if you are thinking about mediation you have obviously completed the examinations for discovery. Undoubtedly in the reporting letter that came from your counsel following those examinations, an opinion was expressed concerning the plaintiff’s presentation, and the plaintiff’s credibility. The medical brief that you have on file will give you further insights into the damage issues and hopefully you can form an impression, as to whether the plaintiff can satisfy the burden of proof. Hopefully, this isn’t the first time you have looked at the file, and you already have some impression, and probably participated in setting the reserve. Now you are about to call your counsel, to discuss the date time and place of the mediation, as well as the style of the mediation, and pick a mediator. This might also be a good time, to discuss theories about settlement, and the level of authority required. It is also the best time to discuss, what the opening session should look like.
There is no substitute for preparation it is the foundation for success in any human activity. Counsel must prepare the mediation memo and when it is finished, I always found it useful to send it to the client and ask for any comments or suggestions; and then I would serve it on the other side. You must try to get your memo to the mediator at least seven days in advance of the session. The mediator needs time to prepare as well. When a mediation fails it is because someone did not prepare properly. The claims rep should also have an opportunity to read the other side’s memo before the mediation session.
I mentioned the concept of the opening session because of recent trends in the mediation process. Firstly, in commercial litigation at mediation today it is rare that there is an opening session. This is a process that has evolved, probably over the last five years and the trend is affecting personal-injury mediations.
The commercial litigation bar has adopted the no opening session policy because these cases, bring the parties together on numerous occasions prior to the mediation, the disputes are usually not fact driven, and success usually depends on how the law is applied to the facts. Having an opening session in these kinds of cases generally tends to become confrontational and does not contribute to a cooperative resolution of the issues. In these kinds of cases risk assessment is more vital.
As a result of what I have seen from these cases I have started thinking about the opening session in personal injury/insurance cases. I have developed the practice of speaking to counsel either on the phone before the mediation or on the morning of the mediation to find out what kind of an opening session they want.
In most personal-injury cases, a traditional opening is probably usefull. In subjective injury litigation the traditional opening, is probably the most appropriate. Firstly, it puts everyone at ease, and stresses the informality of the process, and encourages everyone to participate, this is crucial.
The mediation process is like water, it takes the shape of the conflict you are trying to resolve. Within every conflict there is a hidden solution, the key is to find the roadmap to resolution. You have the freedom to be creative.
I have conceived of an opening session, that comes from my experience in dealing with disputes among the First Nations. We would use a circle process, with a talking piece. There is no limit to what you can try, and the mediator will make suggestions.
I have also done mediations in insurance/personal injury cases where there may be one or two major issues relating to damages, usually it’s only one, it may be causation, it may be an issue about a pre-existing condition, or even a statutory definition. In this type of case having discussed the opening session with counsel we have confined the discussion to that one issue alone, and it was very successful. By doing this, your focus is on what is relevant, eliminating what is not relevant, but nevertheless people will argue about. You have eliminated the window-dressing and taken a step forward to a cooperative resolution.
The mediation process is fluid, you can think outside the box, so that a discussion about the opening session is important. Your goal is to hear something from the plaintiff. Some counsel are very protective of the civilian participants at the mediation and do not want them to speak. At the end of the opening session, the mediator will give everyone an opportunity to participate if the plaintiff defers and says nothing, when it’s the claims representatives turn a brief statement and an innocuous question can start a dialogue.
Experience has taught me that a few well-chosen words by a claims representative can be very positive. The “civilians” see the lawyers as hired guns, but the claims representative is there doing a job. I think it is important that you spend time with counsel discussing what you will say when it’s your turn to speak. When I was counsel at mediation, I would meet with the client well in advance of the session and I would even let them listen to what I proposed to say in the opening session and ask them for comments or suggestions. If I had a claims representative who was a good presenter I would even go so far as to prepare jointly with that person some remarks that they would make.
A carefully worded apology is very strategic and appropriate, even if there is a potential liability split you can work that into your statement as well. If you are not good at the apology aspect, then don’t attempt it, there is nothing worse than a botched apology. Take advice from your counsel on this issue. You cannot just shoot from the hip you must think about it in advance and prepare to deliver it.
The goal of the opening session is to establish rapport with the plaintiff, so that when you start negotiating, if you are using principled methods, your arguments will have more impact on the other side. Establishing a rapport with the plaintiff early, is important, because later you may have to deliver some bad news. If you have succeeded in your earlier goal you will be more convincing.
The opening session sets the stage. There is nothing wrong with counsel phoning the mediator before the mediation. The mediator is not a judge, the mediator and counsel have a common goal of resolving the case, and they can help each other. Subjective injury cases require an opening session, and it is important I believe that when the mediator makes opening comments, some remarks about how risky these cases are, is very appropriate. If the mediator fails to talk about risk, then the defense counsel must. These kinds of remarks are more easily accepted by the plaintiff coming from the mediator. I would think that most mediators would be happy to hear any suggestions from counsel about the opening session; and that includes, specific comments about risk and the burden of proof.
Mediation is supposed to be non-adversarial, it is still about persuasion. When it comes to persuasion there is nothing more convincing than logic. A good opening statement by counsel is really a thing of beauty. It is best to speak without notes. If the mediator has not commented on risk or the burden of proof counsel must do so, and it must be done in a very low key unemotional nonaggressive fashion. I believe it is important to talk about the burden of proof, the onus of the burden, and the risk of failure. These cases are risky as I have mentioned but there is a big difference in the risk each side takes. The insurer is in the risk-taking business, that is what they do every day. You cannot do this aggressively, it must be a sort of “a matter of fact style,” with a quiet vocal presentation.
Counsel, of course must talk about the issues and how you will prove your theory of the case and in going down this road you must select the evidence you will use to establish your theory. For instance, if it’s a psychological case and one of your arguments is that treatment can solve these problems, refer to the report that says that. You can use that argument to support conservative assessments of damages. At the end of a good opening statement you want the other side, especially the client to form the impression that you are ready to walk into a courtroom. If counsel has made a good opening statement, and the claims rep has established rapport, you are well on your way to a successful settlement.
The opening session is not the place for aggressive advocacy or flights of oratory. You catch more flies with honey.
Using Surveillance Evidence
This is an issue that comes up frequently. This kind of evidence is a two-edged sword. I would always classify it as: neutral, not helpful, or helpful. Unless it is helpful or better do not use it. The timing of its use is important. If you have produced it to opposing counsel, you can use it at any time that you deem appropriate. If you have not revealed it to the other side or if you have revealed it, but have not shown it, wait until the negotiations get bogged down.
When you get to that moment, you can then tell the mediator you want to show the photos or the film. Review the evidence with the mediator and gauge the reaction and listen to advice. You can introduce it in a joint session, by reminding the plaintiff how important credibility is, and using the photos to explain why your offers are so far apart. If you use it in the opening it is too easy for Counsel to leave. Later in the day both client and lawyer are invested in the process.
Closing the Opening Session
Since counsel for the defense speaks last and depending on the case and what you know about the opposing lawyer it is sometimes a good idea to lay some groundwork for the negotiations. As a lawyer in any of your arguments and in any of your negotiations it is crucial that you are principled. A lawyer’s credibility at mediation is very important, you want your colleagues to trust what you say and you want to trust them.
So, you can conclude by advising opposing counsel, that you intend to be principled, and that you expect the same from your colleague. It doesn’t hurt to indicate, that if you receive a crazy offer, one that is beyond any possibility of being achieved in a courtroom you will respond in kind. Adding of course that if you receive a principled offer you will also respond accordingly. As a mediator, I am not afraid to tell a lawyer that he or she is being unprincipled. Generally speaking; if a lawyer asks me to make an unprincipled proposal I refuse. My approach to counsel is quite simple,” if you want to make that offer I will take you in the other room and you can make it.” I do not want that offer to detract from my credibility.
Caucusing and Negotiating
When the caucusing sessions commence, the mediator will usually caucus first with the party who will make the first offer, and that is usually but not always the plaintiff. While the mediator is caucusing with the plaintiff, defense counsel and the claims rep can be thinking about the range of their possible responses. Then when the mediator comes in to present an offer you will be able to discuss your theories. Do not be afraid to use the mediator as a sounding board. Remember the mediator goes to both rooms, the neutral will know how the other side will react to your proposals, and you can ask that question. Your first response will obviously be dictated by the offer you received. Always remember that negotiating at mediation is about sending messages, if you have received a principled offer, they are really saying,” we may be far apart at this stage, but we can get there.” In that case your response will be similar.
Under rare circumstances, at a mediation I have asked the defense to make the first offer, never be afraid to do that. The mediator has a good reason for deviating from standard approaches. The mediator will certainly lay the groundwork for this approach. When the mediator asks you to do something there is a reason for it, and there is always an explanation.
In terms of presenting offers, we have developed a style of shuttle diplomacy, which usually works quite well. I always feel however that sometimes these kinds of messages can get garbled during transmission. I feel that the defense counsel is the one person who knows the file the best, and to me it makes sense that in response to the first offer a joint session should be convened and counsel can present the defense’s first response. Using this kind of negotiating, the lawyers themselves during this joint session can talk about the strengths and weaknesses of the case and they themselves would lead the dialogue. What happens now is that there is a discussion through a messenger. I mention this only because it might be something you might like to try, especially in these kinds of cases and especially if you have established rapport with the plaintiff.
Don’t be afraid to try different kinds of caucusing arrangements, especially if the negotiating is becoming challenging. You can try situations where just the lawyers caucus, I have even on occasion arranged for the plaintiff to caucus with the claims rep. It may surprise you but this latter strategy has worked wonderfully well. Before you attempt it, however, you must be certain that you have the right chemistry between the individuals that you are putting together. Ultimately of course everyone must agree to these pairings. You can always sound out the mediator ahead of time as to whether this is a good strategy.
Making a Second Offer
When the defense is making a second offer, in response to a second offer from the plaintiff, once again you must be principled. Once again, as I mentioned it is about sending messages, so the message you want to send this time is “yes we listened, there is some merit in your approach, but we continue to believe that we have a very strong case for the following reasons:” and get those reasons delivered.
This process will continue until you start approaching the limits of your authority. It is important to let this process play out. After doing as many mediations as I’ve done, I have learned to trust the process. Every time I have tried to take a shortcut it has backfired. Resolving the case at mediation is like baking a cake, it must remain in the oven for the right amount of time. If you take it out too soon it falls flat, if you leave it in too long it burns. The mediator knows when it’s time to take the cake out.
Nevertheless, as you are approaching the tipping point things can get tense. Send the right message,” tell them, we only have so much authority, we are running out of room, we can’t get anymore.” The response to those messages will dictate whether you can conclude the matter. As a mediator, I never ask plaintiff’s counsel “what is your settlement goal?” Similarly, I never ask defense counsel, “what is your settlement authority?” I trust the process, I follow the questions and the answers; the messages.
Sometimes, at the end of the day you will have discussions with the mediator about bridging gaps. This is a mediator that you have either picked or have agreed to, so you can’t suddenly start to question or mistrust the proposals you are hearing. Take the mediator’s guidance into consideration, have a private caucus with your client and decide what to do. There are many ways you can get there; you can simply say:” if they move we will move. ” That will keep the process going. I do find that when you get to the end of the day plaintiff’s counsel are more amenable to following the mediator’s guidance, then the insurer.
Reaching Impasse
What do you do, when you start to get the sense that you can’t resolve the dispute? As a mediator what I do, is everything possible to keep the parties talking. As long as everyone is present and they are still talking there is hope. I may try to get the parties to do a blind baseball, or I may suggest a mediator’s proposal or I may ask one or both of the parties if they are prepared to make a final offer. Or I may try the Spiegel approach, just as her Honour does with the sheets of paper and the questions. I do not like these gimmicks because I trust the process but in emergency circumstances they can be good icebreakers. Depending on what the stumbling block issues are you may be able to create an alternative proposal that the parties can live with. An example might be moving settlement funds around into different categories.
Many times what happens at this stage of the negotiations, is that the parties begin proposing all-inclusive numbers. Some plaintiff’s counsel are very touchy about this at the moment, simply because of the controversy that has surfaced about who gets the financial credit for the party and party costs.
If you have been principled in your negotiating proposals throughout the day and you have a firm belief that you have come to the right number, or if you have surrendered your complete authority, it is okay to use the F word, by that I mean “Final.” As a mediator I do not have a problem when one party takes a final position. Naturally I will explore all other possibilities before that announcement is made. If I believe that plaintiff’s counsel has overvalued the claim I will convene a caucus with counsel and client and test them on that issue. Similarly if I believe that the defense has undervalued the claim I will hold a caucus with counsel and claims rep and test them on that issue. Sometimes we explore whether or not the defense can get more authority, this happens from time to time. And many times the defense can get that authority and close the deal, simply by making a phone call. As a defendant at mediation you must never be afraid of surrendering your complete authority. Often I hear from the defense:” if we give them our full authority today it will be the floor for the next time.” That is true only if you allow it to be so. Tell them as you make the offer. Then afterwards, simply send a letter to opposing counsel to the affect that we did our best to resolve this case and any of the numbers we discussed are without prejudice, and those numbers will never be mentioned by us again in any further talks that explore resolution. The other thing you can do is simply make a formal offer of settlement in accordance with the rules outlining your position, and make it clear that that is your trial offer.
Remember that mediation is a cooperative effort to resolve a lawsuit. You must never leave a mediation session on a negative note. There are many things you can do. You must always leave the lines of communication open. In any given case there is probably at least one thing you have agreed to that your opponent is prepared to acknowledge in the closing session. If it is something really important like liability it should be put in writing and signed. If it is not something so crucial you can simply state that you agreed to this and follow it up with an email. Indicate that you are willing to keep discussing the case either by way of conference calls or organizing a further session. Hopefully the mediator will assist in this process by convening a closing session.
Concluding the Settlement
When you do reach a settlement, it must be reduced to writing, either in the form of minutes of settlement or a release of some kind. In the document you must deal with each and every item that you have agreed to. Very recently after concluding a significant case, counsel simply agreed, shook hands and went on their way. I tried to get them to put something in writing, but these were two very senior counsel who knew each other very well, and there was a time issue. I was a little concerned about this and always following a mediation I send a letter to counsel summarizing what happened or at the very least confirming that the case was settled. In this case I went into great detail summarizing what was agreed to, and then afterwards I thought to myself could there be a problem with mediation confidentiality. When a case is settled at mediation you need a document in writing. It’s not the lawyers I worry about it’s the civilians. They can change their mind. Also, if it’s a complicated settlement, details can slip one’s memory.
In the final analysis my best advice is be prepared, be principled at all times, in your arguments and your negotiating, be creative, and when you must; take calculated risks.