By: Robert G. Heywood, Mediator and Arbitrator and Hon. Steven Siemers (Retired), Mediator and Arbitrator
For workers’ compensation cases that have been open for two or more years, that can’t seem to move to closure, that require extensive trial time, present complex legal, factual or medical issues, or simply seem “impossible”, mediation may be the optimal way to achieve resolution. While commonly used as a settlement tool in the civil arena, mediation is now gaining increased acceptance in workers’ compensation as its benefits are better understood and appreciated.
We often ask whether you would be willing to devote a day to a case if you knew that you had over an 80% chance of settling it? That is what happens in most mediated cases, so if your answer is “yes”, you have a case appropriate for mediation.
What is Mediation?
Simply stated, mediation is a negotiating session between litigants and their representatives conducted with the assistance of a neutral facilitator—the mediator—for the purpose of achieving resolution of the dispute. It is typically voluntary, and all negotiations are confidential. Mediation allows the parties to participate in how their case will be resolved, while litigation involves turning the decision making process over to another.
A mediation session provides adequate time to narrow issues, understand positions and interests and develop options for resolution. The mediator will assist the parties not only in crafting the resolution, but also in developing the psychological framework for readiness to move the case to closure. This is often achieved simply by listening, in order to provide parties with a day-in-court experience, thus creating the environment to wrestle with the substantive aspects of the dispute.
Mediation differs from arbitration primarily in that the mediator does not decide the case as would an arbitrator. In order to maintain effectiveness, the mediator is not and should not become an advocate, though a skilled mediator may assist parties and counsel with a “reality check”, if necessary.
Advantages of Mediation
In addition to the items listed above, mediation provides:
• Rapid resolution with very high degree of satisfaction for all parties
• Substantial costs savings by earlier resolution of case with financial benefits to all participants
• Guidance of the process by neutral facilitator
• Creative settlement options possible and encouraged
• Undivided attention of mediator
• Ease in scheduling
• Ability to address client control issues
• A confidential setting so parties are free to express sentiments that they could not express in litigation.
• An opportunity for parties to move on with their lives unencumbered by the workers’ compensation system.
Picking the Right Mediator
In selecting the mediator, consider the mediator’s background and training. We strongly recommend using only mediators who have participated in formal mediation training and who have expertise in workers’ compensation having been a judge or certified specialist. Consider whether you want a mediator who is evaluative or facilitative. It is unimportant where the mediator is liberal or conservative since the mediator is not deciding the matter. The question is whether this mediator can bring the parties together.
Avoid reactive devaluation, i.e. rejecting a proposal simply because of who it comes from. Sometimes agreeing to the mediator your opposition suggests is the best strategy as they may listen to a trusted mediator and help all parties achieve an agreement that would not otherwise be possible.
Who Should Attend and What the Mediator Needs
All decision makers--who must be prepared—should be there. The applicant should bring a spouse or other trusted family member or advisor if this will assist the applicant in reaching an important life decision.
The defense attorney, claims examiner or other personnel who have complete settlement authority should attend. Telephone standby is usually not sufficient since mediation is an evolutionary process affected by the dynamics of the process. It is simply too easy to say “no” from a phone and to reject the recommendations of the defense representatives who are engaged in the negations. Positions may have evolved during the course of the mediation. Not having key personnel present with full authority is the single most significant reason that mediations fail to result in resolution.
In high value cases, structured settlement brokers should come to assist in creating settlement options. A structured settlement expert will demonstrate the consequences of differing scenarios affected by issues of ratings, life expectancy, interest rates, COLAs, balancing up-front money and structured funds [including attorney fees], and assisting with guarantees. Note: workers’ compensation awards are not guaranteed meaning that if a worker dies, the award dies too. A settlement negotiated through mediation can be guaranteed not only for the life of the worker, but for terms selected by the parties—typically ranging from ten to twenty years.
In advance of the mediation parties should provide the mediator with key documents, offer a summary of any past settlement negotiations, identify issues including liens or Medicare Set Aside trust complications, and offer the mediator a record sufficient to allow for productive discussions.
What Happens at the Mediation
Typically, the mediation begins with a joint session involving all participants to review the process and ground rules and to identify areas of agreement and issues. Then the mediator will meet with different groups in caucuses to better identify issues, to review the positions of the parties and to begin to develop options. This is an optimal time to test theories, explore models for settlement and confront any extrinsic or emotional issues that may be barriers to resolution.
The goal is to reach an agreement that addresses the interests of all parties on all issues. The mediator will summarize all terms of the settlement but the attorneys for the litigants will draft the agreement in that the mediator is not providing legal services. The settlement agreement should be specific as to exactly who is doing what; the terms must be realistically achievable [for example, achieving final approval from a legislative body], and the settlement agreement must be timed so everyone knows when things are going to happen.
If settlement is not achieved, the mediator will assist the parties in developing a plan of action for the next steps in moving the case toward resolution exploring the consequences of not having a negotiated agreement. So as to not waste the time spent, the parties will use the mediation as a facilitated case management conference. Many mediators follow up with the parties to continue in the effort to achieve resolution.
Mediation is one tool in the wider field of dispute resolution, but, if properly prepared for and used, it works better than any others--primarily because the parties themselves are deciding how they want to resolve the case. The result is a high degree of satisfaction by all participants.
As the commercial for Alka Seltzer used to say, “Try it; you’ll like it.” That goes for mediation as well. Once you have resolved one of those challenging or seemingly “impossible” cases, we expect you will be back again on another one.
About the Authors
Robert G. Heywood is a mediator and arbitrator in Oakland handling workers’ compensation, personal injury, insurance coverage and employment disputes state wide. He holds degrees from Stanford, U.C. Berkeley and Santa Clara University. He is a certified specialist in workers’ compensation and serves on the Workers’ Compensation Law Advisory Commission of the State Bar of California. He is also a member of board of editorial consultants for Lexis publishing. He did his mediation training at Harvard Law School. From 1976 to 2001, he was affiliated with the Oakland office of Hanna, Brophy, MacLean, McAleer & Jensen.
Hon. Steven Siemers (retired) is a mediator and arbitrator in Oakland specializing in workers’ compensation and insurance-related matters state wide. He also serves as special master in the management of complex cases. Before becoming a judge, he was an applicants’ attorney. Following five years as a trial judge, he served as Chief Judge of the Division of Workers’ Compensation for two and a half years. Following his judicial service, he was Alternative Dispute Director and Ombudsman for the Basic Crafts Workers’ Compensation Program, the state’s first mult-craft carve-out. He hold degrees from Cal State Chico and the New College of California School of Law and currently serves as an advisor to the Executive Committee of the Workers’ Compensation section of the State Bar and is a member of the DWC Ethics Advisory Committee. He trained in mediation at Harvard Law School.
© Copyright 2011 Robert G. Heywood and Steven Siemers. Reprinted with permission.
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