CRITICAL DECISIONS AT MEDIATION: SHOULD A CLIENT ATTEND? SHOULD THE CLAIMS REP BE PRESENT?
Posted on Jul 19, 2019 |Publications
By: Hon. Larry S. Schachner (Ret.)
Throughout the mediation process, there are several critical decisions that plaintiff's counsel will need to make. These decisions will, in turn, determine the ultimate direction of the case.
First, the decision to mediate at all is paramount. Increasingly, private mediation has become an essential tool for all parties involved in civil litigation. Next, it is important to select the mediator and schedule the mediation. Choosing a mediator is a key step in the mediation process, as it often requires the involvement of both parties working together to mutually agree on who will hear the matter at hand.
Once a qualified mediator is selected, and the case is scheduled, preparation should become the main area of focus. The file must be reviewed and updated, and a meeting with the client prior to the mediation is an absolute must. It is at this juncture a decision should be made regarding whether or not your client should attend the mediation.
When I was a Supreme Court Justice, it was a rarity for me to interact in court with either the plaintiff or the insurance adjuster on behalf of the defendant. In most situations I dealt with counsel for each side, and never saw or spoke with the plaintiff or the claim representative. The only time I might see a plaintiff in court was if there was an infant compromise hearing or when I was presiding over a trial. Occasionally, I might hold a special settlement conference where I might direct that the plaintiff and the carrier's representative attend along with their attorneys.
In the world of private mediation, the situation is quite different. At most mediations, it is the norm for both a plaintiff and the claim rep to be present. In my experience as a mediator, I have almost always found it is very helpful to have the plaintiff and the claims adjuster, or someone from the insurance company with settlement authority, attend the mediation. But, as we shall see later in this article, there are instances when plaintiff's counsel may not want their client present.
COUNSEL AND CLIENT PREPARATION
Certainly, both attorney and client should be properly prepared. Counsel should know every aspect of the case, the liability and damages, updated lien information and any other critical legal issues. Additionally, counsel should know if the client is still being treated by a physician, and if not, when the last medical treatment occurred.
The preparation of the client is almost as important as that of the attorney. Counsel must ensure that the plaintiff is well prepared for the mediation and that they understand the mediation process – that mediation is non-binding and confidential in nature. The attorney should set and manage the expectations of the client and have a frank conversation about the strengths and weaknesses of the case. It is helpful to explain to the plaintiff that the case may not settle on the date of the mediation, however, mediation may lead to a settlement down the road.
TO HAVE A CLIENT ATTEND OR NOT ATTEND – THAT IS THE QUESTION
When plaintiff's counsel has their client at the mediation it demonstrates a certain seriousness to the carrier and creates a better climate for settlement. Almost all insurance carriers like having the plaintiff at the mediation, and some have begun requiring it as a precondition to the proceedings. It sets the tone for resolution and gets the mediation off on the right foot. It is an opportunity for the client to speak to the mediator directly, providing better insight into some of the issues in the case. As such, the client now feels like they have had their day in court. In some situations, where a plaintiff is difficult to control or has unrealistic expectations, having them in attendance can give the mediator an opportunity to provide a realistic appraisal of the case. During this time, the mediator will often point out the case's strong points and identify issues that could put plaintiff's case at risk. Additionally, having the plaintiff present can also provide clarity on critical details of the case – for all parties involved. For example, if the damages involved a scar or some other visible physical injury, it is essential that the plaintiff be at the mediation to show the injury to both the mediator and the defendant.
There are those occasions when a plaintiff's lawyer will not have the client at the mediation and will contend that they “have the plaintiff under control” and “the client is waiting by the phone.” While these scenarios may sound helpful in a mediation setting, oftentimes they can disrupt the process. I have had cases where the attorney presumed that they had authority to settle at a specific number. After phoning the plaintiff to relay the settlement amount the client rejected the offer at the previously agreed upon number. There is no doubt that when the client is in attendance, the dynamic of the negotiation changes. It is more effective to discuss the details of the case in person, rather than over the phone. In the previous scenario, I am certain I would have persuaded the plaintiff to accept the offer by speaking with them in person. My powers of negotiation are much more effective when the mediation is face-to-face with everyone in the same room. One additional note – you do not want the client to address defense counsel or the adjuster directly. The last thing any party in a mediation needs is to give the other side an opportunity to ask questions and turn the mediation into an examination before trial.
There are other situations where plaintiff's attorney may not want his client at the mediation. For example, if the plaintiff has yet to be deposed and would make a bad appearance. If that is the case, the client can be kept nearby in counsel's office, so that they can be consulted in the event an offer is presented. Another instance would be when there is a referring attorney, and the attorney at the mediation does not have a relationship with the client. In this situation, it may be in the best interest of the case to either have the referring attorney attend with the plaintiff or have the client wait in the referring attorney's office while the mediation is being held. This can help to preserve the dynamic of the joint relationship between the client, their attorney and their referring attorney.
CLAIMS REPRESENTATIVE IN ATTENDANCE A MUST
As a mediator who has handled countless disputes involving insurance claims, I almost always prefer to have the claims adjuster, or someone from the carrier with settlement authority, in attendance at the mediation. This allows me an opportunity to speak directly to the insurance company in a neutral territory. When a claims representative is in attendance, they have the necessary information firsthand, which often allows for real-time decision making. When the adjuster is present, they can sense the pulse of the room during the negotiations and provide a better read on how the mediation is progressing, rather than getting it secondhand from defense counsel. Should the carrier's representative choose not to attend the mediation, it makes assessing the case more difficult, and prevents the neutral from presenting his point of view directly to the insurance company. The lines of communication, and subsequently the mediation process as a whole, almost always improves when there is someone from the carrier present to speak directly with the mediator.
Furthermore, the carrier's ability to argue its position improves when someone is there to articulate the defendant's position. A major setback to any mediation can occur when you have a session carry on late in the day, the carrier's representative is not present, and the defense attorney – who has a limited amount of monetary authority – cannot reach anyone who has the power to put additional money on the table. This effectively shuts down the negotiations for the day and may prevent the parties from reaching a settlement while the iron is hot. The bottom line – the benefits of having a carrier at the mediation far outweigh any perceived downside.
Every mediation presents a unique opportunity for parties to engage in productive dialogue – specifically to achieve the shared goal of resolution. Relying on phone calls, texts, and emails during the proceedings can often hinder an otherwise forward-moving process. For this reason, it can be beneficial to have all necessary parties attend the mediation. Not only is communication between parties and the mediator more transparent and direct, it is more conducive to a successful mediation. Once everyone is together, and has a realistic view of the case, you are more than halfway towards achieving everyone's goal of a fair settlement and a positive outcome for all.
Hon. Larry S. Schachner is a retired Justice of the Supreme Court, Bronx County. He is a member of NAM's (National Arbitration and Mediation) Hearing Officer Panel and is available to arbitrate and mediate cases throughout the United States. Judge Schachner served on the bench for nearly 20 years. He was voted a Top 10 Arbitrator in the 2018 New York Law Journal Reader Rankings Annual Survey and was rated “Highly Qualified” by the New York State Independent Judicial Election Qualifications Commission.
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