Mediation of certain cases became mandatory before SC WCC for certain categories of cases on 6/28/13. I have mediated over 1,000 cases as a mediator with the majority of them being comp cases. As the commission’s rules as are less stringent than federal and state courts, there have developed some practices that are not in best interests of either party. I will a tempt to address some of these practices and suggest a better approach, particularly for the defense attorneys, carriers and self-insurers.
1- What preparation is needed?
Many defense attorneys and carriers fail to get adequate authority from their insureds or home office before the date of mediation. Not only does this negate the opportunity for resolution of a claim in its entirety with the reduction of significant costs, but it also violates the requirement of good faith. Unfortunately since nothing that occurs at mediation can be used at a hearing, there is no penalty!
Preparation for mediation really should only be a natural step of good claims handling, which is required (or implied) by most company guidelines. A realistic summary of the best and worse case scenarios for indemnity and medical exposure under comp is relatively easy to prepare and is the basis for most reserve requirements. Normally this can be done in a two page letter. This should provide the carrier, employer, and other interested parties with sufficient information to determine a settlement goal for mediation. Also, with some amendment, it can serve as an excellent confidential outline for the mediator.
Too often the only information I have before mediation is the version of disputed facts and often unrealistic expectations from the claimant’s attorney. The only thing worse for a mediator is to have no knowledge of the facts from either side. Once I mediated an accepted paraplegic case and only discovered the severity of the injury when I arrive at mediation! Fortunately the main issue was future medicals and home/auto modifications.
Many times, a party thinks the best way to prepare the mediator is to send all medical reports, depositions of parties and doctors. This is overkill, but a mediator has an obligation to review (not memorize) relevant items which will increase costs. A better approach is a realistic summary of the issues, defenses, and potential results of a hearing. It is not a weakness or crime to concede the worst case scenario in confidence with the mediator.
Often the main obstacle to a settlement is the value of future medicals and whether they will remain open. Total resistance to leaving medicals open (with the right to mediate or settle in future) should not prevent a full clincher of all indemnity. This is especially true when there has not been a future cost allocation by some authoritative source. If a carrier wants future medicals resolved at mediation, it should ensure that all treating doctors provide complete and accurate needs of the claimant. If they fail to do so, then the doctor should be deposed BEFORE mediation. The same is true of adverse reports or vague “check the box” letters.
The defense should eliminate these issues before mediation (if significant) as it will have to be done before a hearing. It is impossible for the mediator to tell a claimant that he will not need narcotics, injections, etc for rest of his life if his records imply that! My old adage of the best way to settle a case is to prepare it for a hearing. The attorneys who do this before they agree to a date for mediation have a distinct advantage at mediation.
2. Who attends?
I believe that attendance throughout the mediation by the carrier and/or the employer leads to the best result for all parties in all cases!! This does not exclude the attendance of the adjuster by phone if that person is on the phone during opening statements and periodically with the mediator during mediation. Believe it or not, some attorneys are more worried about saving some $ at mediation than settling the case. There is nothing wrong with confidentially letting the mediator know the goal of the defense as long as the defense is willing to be flexible and listen to potential alternatives. I too often get parties within 5% of each other, only to be told that the representative is out of authority and it will take a few days to review with home office or the employer. The only solution is an impasse or adjournment, which may work, but the spirit of the claimant may turn negative if the mediator does not get some optimistic assurance from the defense.
3. Who can the mediator talk to?
I firmly believe that an effective mediator has to be able to talk to all participants and decision makers at the mediation. If a lawyer for either side tells me that I can only convey offers and discuss logic of offers through the lawyer, I advise them to get someone else to handle the mediation! Only once has a party disagreed and I called an impasse and sent no bill. I learned later that the case was mediated by someone else and the result was the same.
4. Why hold an opening session with all parties (even if some by phone)?
You should never fail to let the claimant know that you are willing and interested in getting the case resolved on day of mediation, even if there has been evidence of animosity. Some claimants have never talked to the representative before mediation. Some have complimentary statements about the handling of their case and those who don’t still need to realize that the defense cares but just disagrees with some of the disputed facts.
Secondly, this is the only chance that the mediator has to set the tone for the day and assure the claimant (& spouse if present) that he is impartial and will play “devil’s advocate ” when necessary. I like to say that I have two tactics that are used with both sides- humor and sarcasm! The latter is to be used only when things get too adversarial or parties are unwilling to compromise. I get reminded of this by some claimants, and that means they have been actively participating.
At opening, I always say the parties can get two things at mediation that they cannot get at a hearing- CERTAINTY and FINALITY. This sets the tone and prepares a response to unrealistic offers or demands. Believe it or not, most parties at end of day will say this was their motivation for settling the case.
5. Who to pick as mediator?
I have done multiple cases for attorneys who say that they only use me on tough cases. I guess this is a compliment as some attorneys on both sides like for me to be the bearer of bad news. Frankly, I prefer the more standard role of being a presenter of different ideas.
Recently, a defense attorney told me I was picked as I was a redneck, and the claimant was a redneck who would not listen to his attorney. I told the attorney I agreed but he better listen as well. The case settled after resistance by the defense attorney, so his client at least listened.
6. What to do when the claimant’s demand is unrealistic throughout?
This happens often and some defense attorneys simply do likewise. A better approach is to methodically “march to your number” with an explanation for each offer (from best case scenario, with credits for over payment taken) as to the scheduled award and separate medicals offered. At some point, then consolidate the medical and indemnity offer, and put the final offer in writing. You would be surprised how fast a claimant will drop the demand after having been educated and understanding that the WCC cannot give any $ to him for future medicals. Most claimants want the $ and control over their care. Remember, at the end it is always about the $ & net to the claimant and the attorney!