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A two part column.
Mediation has some specific quirks and special factors that apply in several specialty areas. This essay covers specific practice pointers for these types of mediation. The specialty areas covered in this two part column are Personal Injury, Commercial Litigation, Family Law, Medical Malpractice and Bankruptcy.
A. Personal Injury
The advantages of mediation for a plaintiff in a personal injury claim include the fact that mediation of a claim leads to less risk and quicker resolution. For a plaintiff's attorney, mediation moves cases. ADR is often the best chance to work out a structured settlement and those non-dollar matters (e.g. apologies) that can enhance a settlement's value and provide a plaintiff with benefits that a law suit generally does not provide.
For a defendant's insurance company, mediation vastly reduces the overall expense of defending cases. With early mediation, 80% of the cases that would otherwise be litigated are settled with only the preparation and costs equivalent to paying for a single deposition.
Mediation is also a protective device for a defense attorney in case of a bad result at trial. If the defense attorney attempted mediation and failed, it helps to protect the attorney from blame. ADR is also a tool that provides for an outside force to allow re-evaluation of a case when a bad file notation has locked the defense into an unreasonable position.
1. In mediation (and often no where else), the Defendant should (perhaps):
Tell the plaintiffs what similar cases are settling for.
Explain your defense, including causation problems and other issues.
Stress your reasonableness and willingness to be reasonable.
Apologize that the plaintiff suffered harm (you are not admitting that you caused the harm, just stating the truth that you are sorry that the plaintiff suffered it).
2. In mediation (and often no where else), the Plaintiff should:
Be rational and balanced.
As the Defendant points them out, admit the weaknesses in your case and show how you've evaluated the impact of the weaknesses in the expected outcome.
Provide the adjustor with a rational reason for moving off an established position (provide the adjuster with new medical records, new expert reports, new facts, etc.). Always remember that there is an auditor who will review the case.
3. Both sides should:
Be prepared to discuss causation and damages.
Deal with pre-existing injuries (why they matter or why they do not matter).
Deal with contributory or comparative negligence issues.
Be prepared to present all pros and cons on all damage issues (both making sure that all the damages are presented and identifying which damages are contested -- and why).
Avoid direct reference to formulas. Even if you know it and they know it, both plaintiffs and defendants often deny formula approaches and are made truculent by reference to same.
B. Commercial Litigation
Mediation is often the last and best remaining chance to find a business solution to the problem that led to litigation rather than place a dollar value on the injury. ADR is often the last chance to explore early resolution, correction of mistakes, and control of costs if litigation cannot be avoided.
Importantly, commercial litigation mediation can focus on reducing costs in the litigation or on picking neutral arbitrators to resolve important contributing issues such as valuation. Mediation should be seen as a place to structure future relationships whether or not the litigation continues.
Special Points to Remember
First, can you preserve or strengthen the business relationship that is being destroyed by the litigation?
Second, can you find a business alternative to the issue underneath the matters resulting in the breach of contract or other commercial problem? Often there are hidden agenda issues or hidden causes that the parties and the mediator need to look for.
Third, can you evaluate various resolutions in light of the cost of discovery and other litigation costs (including publicity, uncertainty, time and effort stolen by litigation)?
Commercial litigation benefits more from early mediation, and from repeat mediation sessions, than any other area. For comparison, personal injury cases generally settle in a single day or half day session and generally must have an adjuster's established file to be mature enough to mediate (mediation gets used only after normal negotiation fails).
Commercial cases may have multiple sessions, each resolving one point, and can often start as soon as the parties have identified that a problem exists.
For further comparison, domestic issues often need some delays to provide time for the case to mature and the parties emotions to get under control. To the contrary in commercial cases, it is important to mediate while the emotions are still under control.
In commercial litigation, the sooner the case is mediated, the more likely a "win-win" solution can be worked out. The sooner the case is mediated the lower the amount of damages to be worked out.
Especially in TROs (temporary restraining orders), covenants not to compete, contractual language disputes, trade secrets and employment litigation, early mediation, prior to heavy "investment" in the lawsuit, is a successful method for resolving conflict. (In Texas Federal Courts, all commercial temporary restraining orders have a 90%+ success rate with early mediation).
Further, early commercial mediation often results in additional business being worked out between the parties.
This ends part one. Next month, part two will cover Family Law, Medical Malpractice and Bankruptcy.
C. Family Law Issues
In Family Law or Domestic cases, mediation is often the only chance, other than trial, to have a client take time and look at reality and what the system can and cannot provide the client. Mediation can also can provide substantial catharsis, by providing one time both parties can speak at length and be heard without interruption.
Mediation is also the one time that the parties have to sit down and focus on what they really want (rather than what they think they need to seek or what the law will let them fight for). In cases where emotions are controlling settlement discords, a full day of mediation can often bring emotions under control and result in a signed and binding settlement (for use when emotions surge again) of the issues before the Court.
Further, divorces are often times when a family counselor/ mediator's long term presence can provide substantial aid to the family members in sorting out and understanding their new roles, emotions and relationships.
In addition to considering a typical litigation mediation session to settle significant issues, attorneys will often find that a non-lawyer facilitator/mediator (a specialized type of family counselor who meets with the parties an hour at a time, from time to time) can often help make the process a much less stressful and unpleasant one for their clients.
Finally, a growing group of mediators are mediating divorces prior to the involvement of counsel, with good effect and increased client satisfaction.
D. Medical Malpractice
Medical litigation issues include both personality problems and medical malpractice issues. They are different from the preceding types of cases in important ways.
In the experience of Eric Galton (the author of Texas Lawyer Press' Mediation Manual) and a number of other high profile mediators with several hundred cases each to their credit, there are two important observations involving medical malpractice cases.
a. One of the most difficult portions is the mediating that goes on between the different defendants. Often the best method of handling this is to first have the defendants agree to a reasonable settlement range and then to have each put up an initial contribution (without looking into a formula) to test whether the plaintiff can be moved towards that range.
Only after the plaintiff has moved into a reasonable range that the defendants can agree to, should the percentage contributions, the necessary amounts to "close the gap" (between the initial offer amounts and the amount that is "reasonable") be discussed. Often the reasonable range figure provides incentive, as does the possibility for partial settlements between the plaintiff and some defendants.
b. Cases seem to resolve more consistently if mediation occurs very early. Unlike many defendants, most medical malpractice defendants are experts who can understand the risks and the theories. They may very likely have access to almost all the facts long before the plaintiff's discovery seeks them.
Further claimants' negative feelings towards health care providers will harden over time. Physicians' "denial matrices" also seem to harden more as time passes. What was a great tragedy for which a defendant feels sorry eventually becomes a past matter that the defendant does not wish to remember or to accept blame in. Settlement works best when both parties are still able to communicate and listen.
Mediation works well enough that many hospitals are focusing on in house mediation staff. Ronald G. Tefteller of Southwest Texas Methodist Hospital's program has been successful enough that he has been expanding it and has published several papers. Since October of 1989 he and his associates have been expanding their program into programs for churches and other large organizations.
Such programs have benefited staff and patient relation problems as much or more as litigation issues. As a result, more and more hospitals are adding mediators to their HR (human resources) department considerations.
In considering mediation of a medical malpractice claim, remember that medical malpractice cases are expensive. Litigating such claims has an average expense of $34,200.00 (St. Paul Insurance Company's 1989 survey). Mediation of the same claims averages $9,600.00 in costs (or approximately $24,600.00 less). Hillcrest Medical Center in Tulsa, Oklahoma reports similar differences, with litigation costing $100,000.00 or more and mediation $20,000.00 or more.
E. Bankruptcy and Mediation
Available only by the agreement of the parties, there has been some mediation in bankruptcy proceedings. Since bankruptcy often involves non-zero sum solutions, mediation has been growing in that area solely as the result of the successes attorneys have had using the method.
Bankruptcy is one area where waiting to mediate -- until counsel can determine if there is going to be a contest -- may well be superior to immediately moving forward to mediation. As a result, instead of rushing to mediation, bankruptcy law calls for a "wait and see" attitude.
Courts using bankruptcy mediators generally require that the mediators have at least 10 years of licensed law practice in bankruptcy and forty hours from an MCLE approved program providing instruction in mediation.
This is because bankruptcy appears to be an area where practice in the area of law mediated is important to the success of the process and the mediator is often expected to have substantial input in suggesting uses and alternatives under the bankruptcy code.
F. Final Notes
There are wide varieties of subject matter, approaches and techniques that apply to mediating vastly different areas. Often, by appreciating the differences and hidden similarities in conflicts it is possible to find useful strategies and to "shift gears" for the changes.
Thus divorces, like a personal injury case, benefit from a "settle the issues" sort of mediation. However, like a commercial law case -- where the parties will continue to deal with each other (because of custody matters) -- divorces can often benefit from continued mediator input.
Similar cross-pollination and perspective apply to other areas of conflict that can be mediated, from labor law issues (not covered here) to personal services contracts (not covered here) to any area of human conflict that becomes subject to mediation.
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