Thursday, December 3, 2009

Multi-Party Mediation

One on one mediation — that is, one plaintiff versus one defendant — is familiar to most trial attorneys. Depending on the complexity of the facts and the legal issues involved, such mediations can be difficult or easy, but they usually involve a fairly simple concept: the two parties either ultimately agree on the relative responsibility and value or they do not.

The complexities may increase exponentially when more than two parties are involved. In multi-defendant cases, for instance, the principal difficulties may involve the plaintiff (or plaintiffs) very little, if at all. Often, the defendants will come to a basic agreement concerning the total settlement value of the plaintiff’s case, but disagree strenuously on how that amount should be divided among them. In catastrophic injury cases, differing levels of available coverage, both primary and excess, add further complexity to the mix. A carrier with relatively low primary limits insuring a defendant with only marginal liability, for example, may find itself pressured into paying more than it thinks it ought to by an excess carrier that is also the primary carrier for one of the other defendants!

One technique used in cases with multiple defendants is to gather them together for a preliminary session (or sessions) in advance of the mediation in chief. Sometimes the same mediator may be used for all sessions; sometimes not. The object of this pre-mediation, if you will, is to see how much agreement may be achieved among the defendants without forcing the plaintiffs to sit cooling their heels for hours while the people with the money wrangle among themselves. For an example of a technique that has been used with some success to accomplish such agreement, see Jeff Kichaven’s discussion of the so-called "Surowiecki Ballot" in his October 2008 article entitled "A Tool for Multi-Party Insurance Litigation Mediation with ‘Additional Insureds’." Hopefully, by the time of the main event, the defendants will be prepared (up to a point) to work together in a common cause.

Sometimes, the defendants never reach agreement on the percentage each will be willing to make. If that happens, another technique is for the mediator to meet separately with each defendant and obtain the best offer each is willing to make. At the end of this exercise, the mediator then discloses the total package available from all defendants, but does not disclose the individual contributions each has authorized. Having obtained total authority from the defendants, the mediator will then meet with the plaintiff — or plaintiffs, if more than one — and determine if settlement is possible within the authority given. Of course, if it isn’t enough, step one may have to be repeated.

If, after all is said and done, the mediator cannot get substantial commitment from all of the defendants, he or she can explore whether the plaintiff(s) may or may not be willing to settle separately with some of the defendants, while continuing to pursue the others.

As a last ditch effort to achieve at least a partial settlement, the mediator may seek preliminary contributions from the defendants sufficient to settle with the plaintiff(s), with the defendants agreeing to resolve their final contributions through separate arbitration (or litigation) among themselves. This course of action has the advantage of capping the total amount to be paid to the plaintiff(s), thus protecting the defendants from the consequences of a runaway verdict, while allowing them to fully litigate their final contribution percentage vis a vis each other.

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