Baltimore Injury Lawyer Blog

Mediation has been on my mind lately.

I recently mediated a serious accident case with a retired Court of Appeals judge, where after a 7.5 hour mediation we were able to reach an agreement to resolve the case. This was a lot of work. A meeting to prepare the client. Draft a long (in this case 11 single-spaced pages)confidential statement to the mediator with all the facts of the case, my theory of liability, damages and an analysis of the important legal and evidentiary issues. Add exhibits showing the scene, the injuries, and key documents (deposition excerpts, witness statements, medical records). Get the exhibits turned into PowerPoint slides for the opening statement. Etc. A mediation like this amounts to about a week's worth of work, if you include the day of the mediation itself.

A few days later, I saw a great blog post by Brian Nash, where he listed his top five pet peeves about the mediation process. And then this past Friday, I moderated a panel discussion on mediation at the Maryland Association for Justice's Spring 2011 Auto Negligence Seminar (our mediation panelists were Hon. Clifton Gordy (Ret.), Hon. Carol Smith (Ret.), John Sandbower and Scott Sonntag).

Since I have been thinking about mediation so much lately, here is one of my own pet peeves about the mediation process- insurance companies that send a representative to the mediation who does not really have "full authority" to settle the case. I even commented on Brian's blog post about it.

Let me explain what I mean when I say "full authority to settle the case." To me this means that the adjuster at the mediation has the discretion to settle the case for any number between zero dollars and the defendant's maximum legal exposure, without making any phone calls or asking anybody's permission. This almost never happens.

Instead, you get an adjuster who flies around the country attending mediations, but who only has "full authority" to settle up to a certain pre-selected number. To go beyond that number, they need to make a phone call. This can be a huge problem in mediation. In fact, this was mentioned as an issue by both of the retired judges on my mediation panel.

A big reason mediation can be so effective is because everybody is in the room, committed to reaching an agreement. Presumably, one reason the particular mediator was selected was because both sides had a certain level of trust in that person. And that mediator can look the decision-makers in the eye, and push both sides toward an agreeement. That is, if they are actually there.

If you add in somebody who isn't in the room, and most likely isn't even in the state, it really hurts the mediator's ability to work, even if they can speak to the real decision-maker on the phone. That person hasn't been in the room, and typically doesn't have the in-depth knowledge about the case that the people who are there do. This out-of-town decision-maker only knows what has been reported to them. Often this is only the case reports that the defense attorney periodically sends to the adjuster, and the adjuster's file notes. They didn't see my presentation, so they don't know what the photos look like, how the Plaintiff presents, or anything else that has been driving the mediation.

Even worse, what if you have a case where the defense lawyer has not done a good job of preparing it for trial, or hasn't fully investigated the plaintiff's damages? Then the real decision-maker is operating off of incorrect or incomplete information, that I can't correct. This makes it very tough to get an offer above the pre-selected number. Even if the real decision maker is willing to go higher when brought up to speed, they may not be able to do so without answering questions about why the case settled so much higher than it was reserved. All of this hurts the parties' ability to get anything accomplished at the mediation.

I think I am going to start requesting as part of the mediation agreement that whoever attends on behalf of the defendant's insurance company have my version of "full authority" to settle the case- for any number without making a phone call or getting anybody's permission. I wonder if it will make a difference. Actually, I wonder if anyone will even agree to it.