This week we begin a new series of blog posts about how lawyers can get the most for their clients out of the mediation process. This topic is fundamental to our business. We are, after all, settlement consultants and advisors. We have extensive experience and insight into how structured settlements can be used to help maximize recovery for clients and we often end up playing a much broader role, advising more generally on settlement strategy. We attend a lot of mediations over the course of a year. This gives us a good opportunity to constantly refine our views about the approaches and tactics that are likely to work best.
We kick off this series of blog posts with a bit of common sense advice. One of the most important things to ensure a successful mediation is to make sure that you have all the right people in the room with the mediator. This may sound obvious to some of you but you would be surprised by how frequently we see lawyers fail to pay heed to this essential point. As Woody Allen once said, “80 percent of success is just showing up.” Nowhere is this more apt than when it comes to mediation; except in the case of mediation, it’s not enough for just the plaintiff and counsel to show up — you need all the right parties on the other side too.
Sometimes this may not be so easy to accomplish. The insurance industry has been following the general trend in the business world by cutting costs for many key functions. We see this particularly when it comes to the role of insurance adjustors, many of whom now work remotely. We call these folks pajama adjustors because most often when we interact with them, they are sitting in front of a computer screen in their home.
This presents a problem when it comes to mediation. It’s not a problem with the pajamas, per se. But our general experience is that mediation never works well unless all the necessary parties to a settlement gather together around the same table. Real eye contact is a necessary ingredient of negotiation because you have to build a sense of rapport and trust with your adversaries in order to be able to compromise. Dialing in by phone just won’t cut it. You’re paying the mediator good money for his or her expertise, and if the mediator cannot talk to the adjuster — the decision-maker on the defense side — than he or she can not effectively do their job. Having the adjuster on the phone means that the mediator’s message is going through defense counsel, who often have their own agenda for filtering that message.
In most cases, the problem is further complicated by the fact that the defense will often be insured with multiple layers of coverage. Assuming the damages exceed the primary layer, it’s going to be impossible to settle the case unless the excess coverage provider is also sitting at the table. For the plaintiff, this means there’s really no reason to participate in mediation unless all parties necessary to settlement are present or at least represented.
Getting the most out of your mediations is beneficial to you and your clients because everyone saves a lot of time and money by not going to trial. Start by showing up and stay tuned over the next few weeks for more pointers about how to position yourself and your client to take advantage of your next mediation session.