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Mediation Phases

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Like the moon, mediation proceeds in phases. Here’s a primer on what happens when.

Phase 1: Investigation
The first phase of a mediation consists of fact gathering and defining the issues. When the parties provide exhaustive briefs, time spent on fact-finding may be minimal. We can quickly pin down which facts and issues the parties agree or disagree on.Sometimes people agree on the facts, but not how to interpret those facts. Ferreting out those disagreements is part of defining the issues. Usually case resolution will turn on fewer than five pivotal issues.As we drill down, disagreement about a fact may emerge, but a participant may be able to get the evidence to resolve the question during the mediation. Perhaps the information was not previously shared because it was not obvious this was an issue, or someone may have been playing hide-the-ball. The employer’s side in a workers compensation case should bring a copy of the indemnity and medical payment print-outs to the mediation.

If no one can access the needed information during the mediation, we can usually put that issue aside and continue to mediate to resolution. But if that piece of the puzzle is critical, we might adjourn the mediation to allow time to gather those details with a commitment to resume on a specified date.

Mediation is not the time to declare you need additional discovery. For purposes of negotiation, let’s assume that each side’s discovery efforts would produce information favorable to that party. If the case settles, no one need undertake that expense.

Phase 2: Working With The Numbers
Now that we know what we’re dealing with, it’s time to talk about value. Sometimes parties have exchanged offers and demands prior to mediation, but often they were waiting for this meeting. If everyone was together in joint session until this point, now may be the time to go into caucus, separate private meetings with the mediator.

Once in caucus, parties can be candid about the strong and weak points of their case. Nothing said in caucus will be shared with the other side unless you authorize it to be shared. Moreover, per statute, no communication between any participants made exclusively within mediation can be used in any civil forum.

Occasionally, a party has a secret reason for wanting to settle that has nothing to do with the case itself. Here are some real-life examples from my mediations that show the importance of confidentiality. An injured person planned to move to another country. A defendant company was negotiating a buy-out; they were undergoing a fiscal review and wanted to get this potential liability off the books. In each case they told me these things, but the information went no further.

While remaining neutral, the mediator gently helps each side form their offers of settlement and communicates them to the other party. Sometimes this entails restating a party’s position in a way to avoid unnecessary antagonism.

As information and offers are exchanged, parties converge on resolution. If everyone is unwilling to go one step further, and it seems resolution is close, the mediator may suggest a “mediator’s proposal.” This allows parties to settle while saving face and can reduce dissatisfaction within the attorney-client relationship.

Phase 3: Documenting the Agreement
We have a deal, and now everyone gets back together. Parties are encouraged to bring a draft agreement to the mediation. If they must return to their offices to hammer out the final document, before leaving the mediation everyone should sign a stipulation of settlement or Memorandum of Understanding which recites the agreed-upon terms.

Putting words to paper can call parties’ attention to missing details. Now is the time to consider the What If’s.

Finally, review the timeline and commitments for wrapping up the loose ends. That typically includes court approval if required and paying the mediator.

How Much Does Mediation Cost?

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You could pay $30,000 for a day with a retired state Supreme Court Justice. Or you could pay about a tenth of that amount for an effective mediator. When you’re ready to choose a mediator, check out the person’s bio (resume, CV) and request a copy of the fee schedule. A few mediators post their fees online, but usually you need to request a current fee schedule.

Who Pays?
In civil cases, the fee is typically split among the parties, though sometimes one side agrees to be the sole payer. In a typical workers compensation mediation involving only the Applicant and one Employer, the Employer pays the cost. If there are multiple parties or issues, such as a serious and willful claim or a third party claim for the same injury, the parties decide how the cost will be divided.

Holding Your Place
Some mediators, including WCMediator.com, charge an administrative fee which protects your choice of date. This fee covers all pre-mediation communications to set up the meeting. Payment confirms the parties are going forward. Some mediators charge as much as $1,000 for a cancellation within seven days of the reserved date.

Special Arrangements
Carve-outs are alternative workers’ compensation programs between employers and unions. Required mediation can be a feature of these programs. There is no cost to the injured worker to participate.

When a judge orders parties to mediate, they often benefit from a reduced-fee arrangement. Sometimes a court will provide free mediation to parties in the courthouse. Outside the courthouse, mediators on the court’s approved panel agree to abide by a fee schedule. This may get you a limited number of hours at no cost or at a reduced cost. Often when such a mediation is clearly progressing towards resolution and time runs out, parties choose to continue mediating at the full-fee rate.

Flat vs. Hourly
Some mediators charge by the hour, and some charge a flat fee for a half or full day mediation. Some mediators specify that in addition to the flat fee, hourly fees will be assessed if the mediation continues past the time allowance. One mediator quotes a “flat half-day fee” on his website which buys “1 hour preparation, 4 hours of session.”Don’t think you can book a half-day for a flat fee and simply go long. The mediator and other parties may have other time commitments.  If you use a full day of the mediator’s time, you will be charged for a full day.Clarify how charges for travel time and expense may be calculated. In addition to his hourly mediation fee, one Georgia mediator charges a flat $15,000 for travel within a five state area plus meal expense .

Features of a flat fee include predictability for the parties and payment up front to the mediator. Using an hourly fee structure assures you won’t pay for more time than you use. Workers compensation mediations are usually complex and take about five hours.

Bottom Line

At the end of the day, the bottom line may be about the same. Under either arrangement, most mediators do a lot of work without compensation, such as communicating with the parties in advance of the mediation. Additionally, if the case does not settle at mediation, mediators typically continue working with the parties by phone to reach resolution without additional charge. Unless you have submitted a human-size set of documents for review (not recommended), mediator preparation time is also free. If you are unsure, ask what the fee does and does not include and what services do not incur a charge.

If you don’t like the billing method on the mediator’s fee schedule, you can request an alternate quote that fits your comfort zone.

The real question is how much that claim will cost if you don’t settle. Mediation is highly effective and efficient in helping parties close claims, an excellent bargain compared to uncertain and expensive future litigation

When The Injured Worker Calls- Ethical Implications

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I get calls at least once a month from represented injured workers who don’t know what is going on with their claims. Stop and think about that in light of the Rules of Professional Conduct.

Typically, in violation of existing rules, the AA has not communicated with the client. Sometimes the attorney has given the client false information. Recently an IW told me his lawyer said there was no such thing as mediation for workers’ compensation cases.

Many of these IW’s are reaching out directly to the employer’s counsel to try to resolve their issues. This puts the employer’s counsel in a difficult ethical position. New Rules 4.2 (represented person) and 4.3 (unrepresented person) lay out the restrictions on defense counsel for that communication.

Frustrated injured workers who want to resolve their claims are seeking information on the internet. That’s how they get to me.

I am not an advocate for anyone; I am a professional neutral. I have always made that role clear to callers. New Rule 2.4 requires mediators to inform unrepresented parties of the mediator’s neutrality. All I can do is assure the workers that I am available to mediate and to talk to their lawyers or adjusters about starting the process.

If you get a call from someone who wants to mediate, don’t brush off that inquiry. There is no charge to talk to me about whether mediation is right for your case. I’ll give you the information you need.

New Rules Of Professional Conduct For California Lawyers

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                                                 New Considerations in Settlement and Case Management 

The California Supreme Court has approved new rules of professional conduct for attorneys licensed in California which go into effect November 1, 2018. These rules generally expand the existing settlement ethics rules. Violation of the rules can lead to a range of disciplinary actions, including disbarment. Here are the ones which affect people trying to settle a case.

Client Communication
Prior Rule 3-500 in a single sentence required lawyers to keep clients reasonably informed about significant developments. New Rule 1.4 is more detailed. Now there’s a two-way street: the lawyer must reasonably consult with the client about how to achieve the client’s goals. What’s more, the lawyer must also inform the client about what the lawyer cannot legally or ethically do even if it’s what the client expects.

Prior Rule 3-510 required lawyers to promptly communicate the specifics of a written settlement offer. A California lawyer need only pass along a spoken settlement offer if the lawyer deems the offer significant. New Rule 1.4.1 preserves this distinction.

In evaluating settlement offers or making other decisions about the representation, the Comment to new Rule 2.1 clarifies that a lawyer can initiate advice to a client on relevant, non-legal issues, such as moral, economic, social and political factors.

Diligence
Prior Rule 3-110 defined “competence” as including diligence. Now a separate Rule 1.3 prohibits a lawyer from “intentionally, repeatedly, recklessly or with gross negligence” failing to act with reasonable diligence.

New Rule 3.2 says “a lawyer shall not use means that have no substantial purpose other than to delay or prolong the proceeding or to cause needless expense.” Now an ethical rule may apply to needless court appearances and continuances and improperly postponed treatment.

Truthfulness
New Rule 4.1 prohibits lawyers from knowingly making a false statement of material fact or law to a third person, i.e., someone who is not a client, such as an opposing party or witness. A lawyer cannot knowingly incorporate or affirm the truth of someone else’s false statement. A nondisclosure is the equivalent of a lie if the lawyer makes a partially true but misleading material statement or omission. On the other hand, the Comment to the Rule clarifies that there is no affirmative duty to inform an opponent of relevant facts. Representations about case value are not statements of fact or law.California Business and Professions Code sec. 6068(d) requires lawyers to represent clients with methods which are “consistent with truth.” A lawyer who intentionally deceives the court or any party can be charged with a misdemeanor. This statute remains in effect.Everybody Who Acts For the Firm
Prior Rule 3-110 included within the duty of competence a duty to properly supervise lawyers and non-attorneys or agents. New rules 5.1, 5.2, and 5.3 expand on that and provide for vicarious liability for a breach. A subordinate lawyer has an independent duty to follow the rules, but is not responsible for following instructions when there is an arguable question of professional duty.

 

Humility Leads to Mediation Success

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Here’s an oxymoron for you: the humble litigator. Like jumbo shrimp and military intelligence, it may seem ridiculous to pair humility with any litigator. But for anyone trying to settle a claim, a little humility can help get you to the finish line.

Most of the time that dispute will eventually settle without court intervention. The parties want to resolve the issue with the smallest expenditure of time and money. Incivility, bias, prejudice and anger are inconsistent with humility and get in the way of settlement.

Acting with humility does not admit fault. The most successful litigators are courteous and respectful.

I’m The One Who’s Right
Of course you are.

Then why is the other side fighting so hard to say the opposite? Of course they’re completely wrong, but maybe, just maybe, you could pretend they have a reasonable point of view. Or—here’s a shocking concept—try to see their point of view.

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Students learning to debate (or get through law school) may be asked to argue a position with which they disagree. While preparing for mediation, try to outline the other side’s position and think about all the reasons supporting that position. This is an excellent way to marshal your own arguments.  It is also an exercise in empathy.

You Want Me To Do What??
Think about forgiveness. When you feel wronged, your desire for vindication may make negotiation difficult. Forgiveness must be internal and not necessarily verbalized.

Forgiveness is about moving on, doing the best thing for you and those you represent, not for the benefit of the offender. Forgiveness keeps you in control of your emotions rather than surrendering control to the volatility of others. Forgiveness does not validate the other side’s behavior or minimize the damage it has caused. It doesn’t mean you were not wronged or that the parties will have a good future relationship.

Conversely, a well-phrased apology has helped settle many a case. For example, I watched one litigator, without any prompting and without admitting fault, express sorrow that the injured worker had experienced a lengthy delay in getting treatment. That may not be right for your case; for his, it was. Don’t forget that everything said in mediation is confidential and cannot be used for evidence in any forum.

Good People, Strong Emotions

You’re a good person, right? Yet, difficult situations can spark rage and other extreme emotions in the best of people who then behave without humility.

In mediation you can state your position in the strongest terms in a private session with the mediator. The mediator can then skillfully communicate those emotions to move parties to settlement.

A bit of humility can improve your effectiveness in formulating and reacting to those communications.

Documenting the Mediated Agreement

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Almost all of my workers compensation mediations end with agreement to a Compromise and Release. Parties often bring a partially completed Compromise & Release form, DWC-CA form 10214(c), to the mediation. That’s great. But when considerations prevent execution of a final agreement at the mediation, a Memorandum of Understanding, known as an M.O.U., can be invaluable.

What Is It
After working hard to come to terms, you don’t want to let the passage of time blur people’s memories or minimize their commitment. Participants should not leave the mediation without a record of their agreements.

A Memorandum of Understanding memorializes the skeleton terms agreed upon at the mediation. Parties sign off at the mediation. The M.O.U. might specify a timeline or conditions.

If It’s Complicated
Some settlements are complicated, requiring many addenda. Unanticipated issues may have arisen and been resolved at the mediation. Parties need to return to their offices to draft the final settlement document. The M.O.U. should specify the basic terms as well as deadlines for completion of the initial settlement document, exchange of revisions, and submission to the WCAB.
Conditional Agreements
Some agreements are conditional, usually upon CMS approval of a Medicare Set-Aside allocation. Attorneys may address this issue by doing everything but the walk-through, including signatures, pending approval. This leaves a potentially dangerous loophole when unforeseen events occur during the waiting period.Another way to document a conditional agreement is through an M.O.U. Unlike the agreement which sits in a file drawer, an M.O.U. can specifically address the condition, including what will happen if the condition cannot be fulfilled. For example, if CMS comes back with a higher amount, and the parties do not assent to that amount within a specified time, they can agree to return to mediation.

Getting to MOU

Mediation allows parties to address issues outside the jurisdiction and procedures of the WCAB and to fashion creative solutions.

If you have despaired of closing that troublesome,  decades-old claim, turn to mediation.

Take the bull by the horns, and the result may well be an M.O.U.

What’s Wrong With Telephone Negotiation?

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A litigation analysis found that lawyers used telephone negotiation in 72% of the cases studied resulting in settlement only 35% of the time. That means that phone negotiation sessions or other settlement processes had to be used multiple times to get to settlement. We can assume that repetition resulted in a loss of time and money for the participants.

In contrast, mediation resulted in resolution 100% of the time in the studied cases. Yet, lawyers used mediation in only 2% of the cases.

Lack of Visual Information
You can’t share documents or other visuals over the phone. Even if all participants to the call are supposed to have the documents in their possession, you can’t be positive they are actually looking at it, even if they say they are, or if it’s the right one.

Body language provides visual cues to the negotiator about how things are going. Facial expressions can show surprise, anger, or anxiety as parties exchange information. You can’t look someone in the eye over the phone. Without the visuals, it may be easier for people to dissemble. Likewise, over the phone you are unable to enhance your own message with gestures or other body language. In mediation, the mediator interprets participants’ body language to better facilitate negotiation.

Getting Negotiators to Pay Attention
Listening is hard work. When negotiators use the phone, they may not be focused. There could be active interference, e.g., flashing lights and text messages on the phone, incoming emails, other notifications from multiple devices, or co-workers coming by. Even without those distractions, people’s attention may drift.

Technology Can Get In the Way
What about using Facetime, WhatsApp, Skype or another video call utility? Theoretically, this could overcome some of the deficits of voice-only negotiation. On the other hand, have you seen the hilarious Tripp & Tyler video about video conference calls? Even when the technology is working perfectly, body language can be difficult to interpret or convey through video.

Video conferencing might be helpful during mediation if, for example, the adjuster or injured worker is in another state and unable to travel to the mediation, assuming the principal negotiators are physically present.

What About Meeting At The Board?
Meeting at the board could resolve some of these issues if the parties come with adequate authority, fully prepared, with all relevant information available to them, and with no time pressures.

How often does that happen?

3 Ways to Evaluate Future Medical Care

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Evaluating future medical care is usually the most challenging component for parties trying to settle a workers compensation claim by Compromise & Release. If your crystal ball is in the shop for repairs, try one of these methods.

Medicare Set-Aside
You don’t need a Medicare Set-Aside for claims outside the review thresholds, but claims professionals often order one to get the medical expense analysis. If the report’s only use will be for internal purposes, there is no requirement to share it. If you disagree with a report, you can provide further information to the provider and request revision. Or you can order another report from a different provider. Applicant’s counsel can request the claim professional order an MSA.

Don’t forget that the Medicare Set-Aside amount does not include amounts for co-pays, deductibles, or non-Medicare-eligible expenses.

 

 

Historic Expenses
Don’t be shy about requesting a copy of the print-out of expenditures. Spending some time with the medical expense print-out can be revealing. Total the expenses for the last two or three years and divide by the number of months being reviewed to obtain the average monthly expenditure. You can include claim administration expenses to show what the employer has been spending or omit those expenses to better reflect the actual expenses likely to be incurred post-settlement.

Review the expenses to see if some items are atypical. Is there a major surgery which will not recur? Has the injured worker stopped taking expensive opioids? Omit those items from your calculation, but include the expense for substitute treatments or medications. Conversely, if credible medical reports indicate a future large expense, the evaluation can be increased.

Revisions are not usually a problem because it’s easy to omit a past surgery from the historic total or to change the time period under review. One-time future large expenses can be added as a lump sum.

Once you have determined the average monthly medical expense, your structured settlement broker can quickly calculate the present value of future lifetime care, including an inflation factor to account for rising prices. This figure can purchase monthly payments to be paid to the injured worker or a medical expense account. The broker’s services are free, but be sure to keep that broker in the loop for future settlement discussions.

 

 

Health Insurance Premiums
Many injured workers can get health insurance for their medical expenses after workers compensation coverage stops. Some may already have that insurance. Injured workers who lack health insurance should check with a health insurance agent or www.coveredca.gov to determine their access to an appropriate policy and the cost.

Once you know the premium amount, add in a generous inflation factor plus an allowance for any co-pays and deductibles. Again, your structured settlement broker can calculate a present value, and, voilá!, you have your medical expense evaluation.

 

 

No Claim Too Difficult
Every claim can be evaluated and settled. It’s only a question of how to calculate the settlement components. Whether the disagreement is about DOI, AWW, underpayments, overpayments, scope of the industrial injury, or the cost of future medical care, we can figure it out together in mediation.

Turn Workers Comp Straw Into Gold

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Remember the story of Rumpelstiltskin, a little man who could turn straw into gold? The mediation process does the same thing. When provided with the basic ingredients, the mediator can create gold: a win-win settlement.

But the parties have to provide the “straw”:
 
An Open Mind
One reason a case stays open may be that parties are not paying attention to what the other side views as important. Try to discard pre-conceived notions of what the other side needs and come to mediation willing to listen.

Preparation
What does your side really need to settle this case? Is it purely a dollar figure—or are there non-monetary concerns?  Which issues must parties resolve for settlement to happen? Communicating those issues to the mediator in advance makes for an efficient mediation.

A Willingness to Settle
The right people need to be at the mediation with adequate authority. Parties need to spend time calculating a reasonable settlement range in light of all factors before negotiation can bear fruit—or gold. The decision-maker must be at the mediation as well as any necessary support people. That might include family members, clergy, or other advisors to the injured worker, a nurse case manager or structured settlement broker for the employer. If the decision-maker can’t/won’t close the deal without the support person’s input, that person needs to be there or at least available by phone. Coming to mediation with the right people and proper authority shows respect for others at the table and enhances the opportunity for a good result.

When everyone brings the right straw to the bargaining table, they are likely to walk away with a golden settlement. Rumpelstiltskin is the bad guy of his story, but your mediator can be the hero of yours.

3 Reasons Why Mediation Is Better Than An Informal

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