Page 16 - Phoenix Vol 10 No 9

AMY LIEBERMAN | Mediation
Working with Multiple Parties in Mediation
The multi-party mediation pres- ents its own set of unique chal- lenges. What can you do to in- crease the odds that the process runs smoothly? Here are some things to think about to help you prepare.
MULTIPLE PLAINTIFFS
In class or collective actions, typi- cally one or a small group of people will be designated as “class represen- tatives,” and be given decision-mak- ing authority. In an action with two or more individuals, however, they each will have separate claims against the defendant. Con icts arise when one wants to settle, and the other does not. In most cases, the Defen- dant will not want to resolve a case unless it truly resolves all the pending lawsuits and claims.
Another potential con ict is when the Defendant says, “I have $200,000.00. We don’t care how you split it up between the parties.” is creates the con ict of, “My case is worth more than yours!” In one re- cent mediation, one party had a stronger case on liability – but the other case had a much better case on damages. How does the lawyer help the parties to value their claims and resolve the matter? If an attorney has the claims on a contingent fee, and he is willing to adjust his fees to get a settlement, must he do it for both parties? Will all parties know what the others are getting?
SOME SUGGESTIONS
Agree in Advance to a Percent- age Split. Have the parties reach their own agreement that, no matter
what the settlement is, they will split the amount 50/50, or some other agreed- upon ratio. at way, even if the de- fense feels the cases
should be valued di erently, the par- ties are aligned, and the con ict re- moved.
Agree in Advance that their Claims have Di erent Values and can be Separately Negotiated. is means that the parties will likely end up in separate private sessions with the attorney and the mediator to dis- cuss their potential settlements. If this is the case, you should also agree in advance whether or not the par- ties will disclose their negotiations to each other. is avoids having to confront this issue at the mediation.
Consider Separate Counsel. In the event there ends up being a lim- ited amount of money to be split, if the parties don’t agree, independent counsel for each party may be not only helpful but necessary.
MULTIPLE DEFENDANTS
When two or more parties are ac- cused of causing harm to a Plainti , such as two or more cars in an auto accident, two or more employers in a harassment case, or two or more con- tractors in a construction case, the most likely scenario is that each party is going to point ngers at the other. “We did not do anything wrong, but if anyone did, it’s the other guy!”
If that is the case, most likely the parties will need to be in separate caucus rooms. Here are several ques- tions to confront in advance:
• Will the mediator be authorized to tell each party where the ne- gotiations are at any or all points during the mediation?
• Will the plainti be willing to settle with one and not the other? • Would a settling party have a
claim for indemni cation against
the other?
In one recent mediation, the two
defendants blamed each other all through the litigation and would do so at trial. We all anticipated a long
day in mediation. However, for the purposes of mediation only, the De- fendants agreed to split any settle- ment contribution 50/50. ey stayed in the same room during negotiations and agreed on each move together. is collaboration enabled the par- ties to work together and settlement came quickly.
DEFENDANTS AND INSURANCE COMPANIES WITH COVERAGE ISSUES
Sticky situations can arise in medi- ation when an insurance company is defending on a reservation of rights, which means they are paying to de- fend the case, but have not necessarily agreed to pay any settlement or judg- ment. Certain claims might be sub- ject to insurance coverage, and oth- ers may not. e Defendant insured will want the carrier to pay the entire amount of a settlement or may want the insurer to pay an amount higher than the insurer values the case at. e insurer may want the insured to pay a portion of the settlement. eir interests diverge.
In another recent mediation, the Defendant’s insurer had denied cov- erage completely for a pending law- suit. e Defendant hired “coverage” counsel to le a claim of bad faith against the insurer. e day before mediation of the lawsuit, insurer’s counsel in the bad faith case asked to attend mediation. Ultimately, the insurance company agreed to fund most of the settlement with a global resolution of the bad faith claims against the company. ere were ne- gotiations going on several fronts. While the parties were initially hesitant, it was a last-minute game changer that worked for all parties.
Moral to the story: Multi-party cases can be complicated, but pro- ductive. Seek as much agreement as possible in advance.
Amy L. Lieberman is a full-time professional mediator of employment and business con ict. She has repeatedly been listed in the Best Lawyers in America, Southwest Super Lawyers, and Arizona’s Finest Lawyers in Alternative Dispute Resolution, and is the author of the book, “Mediation Success: Get It Out, Get It Over, Get Back to Business.” For more information, visit www.insightmediation.com or call Amy at (480) 248-3366.
ATTORNEY AT LAW MAGAZINE · PHOENIX· VOL. 10 NO. 9 16