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

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.

Privacy Issues When Predators Cause Comp Claims

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In the #MeToo and #TimesUp era, employees may be more ready to assert sexual aggression claims than in the past. These situations could lead to a workers compensation claim, a civil suit or even criminal proceedings. Privacy is an issue in each setting, but only in comp is the claims professional engaged in the victim’s medical treatment. Privacy issues merit consideration throughout the life of the claim, including at time of resolution.

The applicability of SB 863 and Labor Code §4660.1(c) regarding the compensability of psych claims is outside the scope of this post.

Who is the adjuster?
Advocacy based claims handling emphasizes empathy with the injured worker.  Adjusting a claim for physical injury from rape, actual or attempted, or a psych claim arising from sexual aggression may call for special attention to who will see the injured worker’s records.  A female adjuster may be best suited to handle a woman’s claim.  But reports of Kevin Spacey’s and others’ behavior remind us this problem is not limited to aggression against women.

An important concern with #MeToo claims is to avoid a string of claims personnel who have access to the injured workers’ medical records as they make treatment authorization decisions. Some companies have procedures to limit access to sensitive records. However, the longer a case is pending, the more likely it is that multiple people will need to see these records, possibly causing additional stress for the injured worker.

Confidential Resolution
As with all other workers compensation claims, early resolution is best. Mediation is the most private place to resolve sexual aggression claims.  Unlike with an informal meeting, mediation confidentiality is mandated by law.

A WCAB hearing may create additional psychological issues for someone who has had these experiences. Assure that person or their representative that participants are barred from disclosing what happens in a mediation in other forums.

Additionally, caucusing enhances a claimant’s privacy. Once I have separated the parties into separate spaces,they can talk to me without fear that anything will be communicated to those in the other room without their permission. As the mediator, I can reframe the injured worker’s concerns to maximize privacy. This environment facilitates case settlement.

Mediate to Comply with this Regulation

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Ready to file that DOR?  Not so fast. If you can’t show you tried to settle, you may be wasting everyone’s time.
Mediation Shows Readiness
8 CCR §10414(d) requires that “All declarations of readiness to proceed shall state under penalty of perjury that the moving party has made a genuine, good faith effort to resolve the dispute before filing the declaration of readiness to proceed, and shall state with specificity the same on the declaration of readiness to proceed…. [emphasis added]”The way to show a genuine, good faith effort at resolution is to mediate the disputed issues.   Here’s how you meet the regulation’s requirement to state with specificity:”The parties attempted to resolve the described dispute through mediation with mediator Teddy Snyder on [date].”

How often will you need this language? Almost never. The reason is that once parties mediate their dispute, more often than not they resolve it.

Convening
Convening, the process of getting everyone to agree to a time and place to mediate, can be the trickiest part. Some practitioners remain unfamiliar with mediation. They may confuse it with arbitration. We are all afraid to try new things, sometimes even when clients tell us to. You need to communicate your readiness to resolve the issues in a setting where those issues can be fully explored and the parties are in control of the outcome. Mediating is the win-win choice.

Convening is best done by the attorneys, though the mediator can assist. If you are still trying to get the other attorney’s attention, you may indeed have to file that DOR. Once you get a response, even if it takes going to the Board, immediately suggest mediation as a way to cut to the chase, resolve the issues and avoid future unnecessary Board appearances.

Don’t Get Hangry

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Hungry negotiators are bad negotiators. The term “hangry” arose because hunger actually makes people angry, hence “hangry.”

If the mediator provides you with a sandwich menu to order food, it’s not just a courtesy. Nourishment keeps people focused on the mediation instead of their tummies. Take advantage of that menu to keep up your blood sugar. If you are released for lunch while the mediator is caucusing in the other room, go get some lunch. Don’t be shy about brown-bagging or bringing snacks for everyone on your team to save time and money.

For some reason, negotiators seem loath to take meal breaks. On one occasion, the injured worker let everyone know he was hangry. He became visibly agitated and wanted to terminate the mediation early, even though negotiations were progressing. Now I bring nutrition bars to mediations to mitigate the problem. But why have a problem at all? Go ahead and eat.

Plan How To Start Your Mediation

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The way mediations start is important. A bad start can result in a lot of wasted time getting to the place you should have been at the beginning.

The First Move
The best way to start is to start. Don’t be afraid to make the first offer to settle. Setting a settlement floor or ceiling tells your negotiating opponent where you are. Silence can falsely communicate that you are in the same ballpark.

Even if your offers did not get a response before, making a new offer now re-defines the settlement ballpark. An offer made “in light of new information” (even if that is simply a reconsideration) is not bidding against yourself.

Start Very Big or Very Small
Think about how your negotiating opponent will react to your opening. Your initial offer should not be so ridiculous that your opponent will walk out. On the other hand, research tells us that an extreme number can lead to a final result closer to the speaker’s expectation than does a more moderate opener.

Pick the Tiny Issue
Seldom does settlement turn on only one issue.  Plan to start with the issue where the parties have the smallest evaluation difference and continue on as the challenge size increases. You may have to skip and come back to the thorniest issues regardless of size. Isolating issues and knocking them down one by one is an effective way to reach agreement.

3 Reasons Why I Talk to the Injured Worker

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TRUST, CATHARSIS, COMPREHENSIVE RESOLUTION

 

Near the start of every mediation, once each side is in their own caucus room, I spend time talking directly with the injured worker. There are at least three reasons to do so.

1. I want to build trust in the mediation process.

The injured worker needs to feel part of and emotionally invested in the mediation process.  The injured worker is probably unfamiliar with the mediation process and may be apprehensive. The parties may distrust each other. Empathy is one of the traits of a good mediator.  I assure the injured worker that nothing will happen that the injured worker does not agree to. When the injured worker trusts the mediator and the mediation process to be fair, the likelihood of settlement increases.

2. Catharsis is part of the settlement process.
The mediation may be the closest the Injured Worker will get to a day in court.  Telling the story is a prerequisite to accepting settlement.  I want to make sure the Injured Worker gets the chance to tell the story in a neutral setting. Letting out emotions is good, and crying not uncommon.  Occasionally an attorney will intercede and take the place of the client to tell the story from the client’s viewpoint.  This is a mistake.
3. Sometimes the Injured Worker’s concerns are not being addressed.
At one mediation, when it looked like the attorneys had wrapped up all the issues, the Injured Worker asked me, “When will I be able to go back to work?”  A return to work was not part of the attorneys’ deal, and I had to rewind the process to make sure the Injured Worker’s concerns were addressed.  When the Injured Worker feels able to speak directly to the mediator, this type of omission– which could lead to problems for all participants later– is less likely to occur.

I participated in many workers compensation mediations before I became a mediator.  I never saw a mediator take the time to talk to the injured worker. Instead, I saw mediators create a barrier between themselves and the injured workers that made settlement more difficult. I work hard to make sure no communication barriers exist.

Mediator Proposals

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I see cases– sometimes years later– where the parties were oh-so-close to settling when negotiations broke down. Nobody would compromise their bargaining position to give that last inch, and they didn’t have a mediator to help them bridge the gap.
A Secret Response To An Offer Nobody Made
A “mediator’s proposal” works like this. I come up with a figure, sometimes with conditions such as CMS approval, which I believe will settle the case. Neither party has made this settlement offer, but, based on the negotiations which have occurred so far, it is a figure I believe all parties can accept.The mediator’s proposal depends on confidentiality. Parties are in separate rooms at this point. These separate sessions are called “caucuses.” I have always communicated my mediator’s proposals aloud in the caucus room, but some mediators write the proposal on two pieces of paper (one for each side) and sometimes put them in envelopes to be opened once the mediator has left the caucus.

If both parties accept the proposal, we have a settlement. (Hurray!) If one party accepts, but the other does not, there is no settlement, and the refusing party never learns that the other side accepted. I only tell parties there is no settlement. If both sides refuse, I tell them there is no settlement, but, again, parties do not know if the other side accepted the mediator’s proposal.

There are many benefits of the mediator’s proposal. Principally, no one has forsaken their last offer to settle. If a mediator’s proposal does not succeed, the parties can continue negotiating from their last position.

Blame it on the mediator
The mediator’s proposal allows mediation participants to save face. “It wasn’t our idea; it was that darn mediator’s.” Sometimes attorneys hesitate to be completely forthright in their recommendations to their clients, particularly if they are the second or third attorney on the file.  The mediator’s proposal opens the door for a frank discussion while allowing the attorney to shift responsibility to the mediator for an idea the client may find distasteful.

Mediators don’t stick their necks out to come up with a proposal unless they are pretty sure it is going to be accepted.  These things don’t happen early in the mediation.  More likely, you will see a mediator’s proposal when it looks like parties are heading to an impasse. Because my mediator’s proposal is a reflection of the parties own negotiation to this point, it is generally accepted.

Stop Hiding The Ball: What You Need To Tell The Other Side

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Your best friend in negotiation can be your opponent—provided you put your report where your mouth is. Too often parties withhold evidence which would support their position. Sure, your opponent’s initial reaction may be to denigrate your evidence. But they may not have anything to refute it. It might even be too late for them to try to work up something.
Help Your Opponent Convince Their Client
So why did it take so long to get to this point? Because you have been hiding the ball. If you expect large sums for a life pension or for treatment the carrier had denied plus penalties plus fees, be prepared to show why the employer was wrong. You can’t expect opposing counsel to advise their client to change their case evaluation if you’ve been keeping secret the reports that crush their position. Of course, timing is important. There are many reasons why you might not want to show your hand too early. But by the time you are at the mediation table, you must be prepared to put your cards on the table.

How Mediation Confidentiality Helps
Perhaps you have a sub rosa video or some other smoking gun the other side doesn’t know about. Your mediation brief can be confidential– for the mediator’s eyes only. When you are in caucus (a private meeting with the mediator,) you can discuss secret information with the mediator. If you don’t want it disclosed to the other side, it goes no further. But putting the mediator in the picture allows her to frame the issues in the case to maximize the potential for settlement.

Negotiations succeed when parties are in the same ballpark. If you don’t communicate what your ballpark is, your opponent will assume that their evaluation is the correct one. It’s hard to play in the same game when one of you is at Dodger Stadium in L.A. and the other is at Angel Stadium in Anaheim. To bring everyone to the same field, you have to communicate.

America Runs On . . .

You’ve probably seen the ad:

Courtrooms– even WCAB courtrooms– run on evidence. It’s your job to make sure you have evidence to support your view of the case.

The advice to communicate your evidence so your opponent can help you “sell” your position assumes you’ve done everything necessary to gather that evidence.  That could mean obtaining a narrative medical or vocational report or ordering a Medicare Set-Aside allocation report.

Mediations are efficient and successful when everyone comes prepared with information to support their demand or offer.