Mediation of Insurance Coverage Cases

Bruce A. Friedman, Esq.

Bruce A. Friedman, Esq.

by Bruce A. Friedman, Esq.

Resolving insurance coverage disputes through mediation requires careful assessment of three unique elements:  the insurance policy, the rules applicable to the application of the policy and the cases construing the policy.  Evaluative mediation provides the best approach for resolving these disputes.  It requires parties, counsel and the mediator to evaluate the strength and weaknesses of coverage issues, and it provides for input from the mediator as to possible outcomes of the case.  There are also other issues unique to insurance coverage cases that must be addressed in the mediation process.

Why the Evaluative Approach?

More than any other type of case, the outcome of an insurance coverage dispute relies heavily on precedent.  Counsel must educate the mediator regarding both the policy provisions at issue and how court interpretations of those provisions apply to the case at hand.  The evaluative approach provides the most appropriate mechanisms for doing just that.

Choice of Law

Different states’ legal precedents can have a significant impact on the interpretation of a policy; therefore, choice of law issues should be addressed in the mediation brief and discussed in the mediation.  California, for example, has a rule that requires the insurer to prove that it has been prejudiced by late notice of a claim or suit.  Other states may enforce the notice provision of the policy without regard to prejudice to the insurer.  Another issue may involve the issue of waiver of coverage defenses.  The California Supreme Court has adopted a rule that the insurer does not waive coverage defenses not mentioned in the initial denial or reservation of rights letter.  Other states have a more policyholder-friendly rule that provides that coverage defenses are waived if not specifically raised by the insurer at the outset of the claim.  Law and precedent regarding other key issues arising in coverage disputes, such as the standard for rescission of an insurance policy or the application of an exclusion for a known loss, also differ significantly from state to state.

Burden of Proof

There are also different burdens of proof as to the coverage grant in the policy and the exclusions that must be addressed in the mediation.  The policyholder generally has the burden of proof to establish that the risk is covered under the coverage grant of the policy.  The insurer bears the burden of proof with respect to the applicability of exclusion.  This shifting burden of proof may have a significant impact on the coverage analysis in a duty to defend context.  Here, if the insurer is relying on an exclusion, it must be able to demonstrate that there is no possibility that the claim may fall outside of the exclusion.  If it cannot do so based on a summary judgment standard, the insurer must defend the case.

For the rest of “Mediation of Insurance Coverage Cases,” please read the full article from Law.com by clicking here.

Developmental Negotiation: Preliminary Stage

Alexander S. Polsky, Esq.

Alexander S. Polsky, Esq.

by Alexander S. Polsky, Esq.

Developmental negotiation involves a plan and execution of the development of all five stages to maximize the likelihood of a beneficial outcome.  The five stages are preliminary, preparation, information, negotiation and closing.

Let’s take a closer look at the first stage, preliminary.  In real time, your client has met with you and has been signed up, and you are considering approaches.  When signing the client, you developed a thorough understanding of the client’s needs, interests and capacity for risk, both financially and emotionally.  Now you have initial decisions and recommendations to make.

Should there be an initial and early effort at negotiation?

There are many interests to be balanced here.  One is whether protracted litigation will adversely impact the client’s reputation, business interests and/or ability to fund the case if you are not trying to negotiate.

Another centers on your assessment of the quality of the case and client.  Imagine a situation where the client does not present well, has a greater than 50 percent chance of an unsatisfactory outcome and cannot otherwise afford to litigate.  This client needs an early resolution process, perhaps pre-suit.

Let’s examine a claim for sexual harassment, hostile workplace and wrongful termination.  The claimant is a 48-year-old who has been with the company for 10 years; the respondent is a large department store chain.  You represent claimant.  This person is angry and has a bent for vengeance and for creating procedural changes to better address complaints.  When you analyze the interests of the respondent, what do you consider as possible motivating factors for early resolution?

  • The impact of protracted discovery will be disruptive to the business;
  • The impact of protracted discovery could bring out other complaints;
  • A favorable judgment could bring out even more claims;
  • Insurance considerations.

To continue reading Mr. Polsky’s discussion on the prelimary stage of mediation for successful negotiators, please read the full article from Law.com by clicking here.

Start Spreading the News: Mandatory Mediation Comes to New York

Lorraine M. Brennan, Esq.

Lorraine M. Brennan, Esq.

By Lorraine M. Brennan, Esq.

As someone who started her legal career as a litigator, I, like many other litigators, viewed mandatory mediation with both skepticism and some suspicion.  When my client was sent to court-ordered mediation by a judge in the SDNY in the 1990s, I assumed that my adversary and I would merely tick the “attendance” box and return to the judge to let him know that mediation had failed to resolve our complex dispute.  But it was not to be.  Our mediator, a retired partner from a prestigious law firm, literally saved the day.  He pointed out to both sides the risks inherent in going to court.  Weaknesses in my case that I had dismissed as minimal were suddenly food for thought—who really knew what a jury might do?  Similarly, my adversary had his eyes opened to the fact that his case, while not completely frivolous, was quite weak and that he stood to lose it all if he insisted on going to court.  The mediator spent the entire day with us, and at the end of it, we had a fair and reasonable settlement that both sides could live with.  We saved time, money and a lot of unnecessary hostility on both sides.  I became a believer in the process.  It worked.

Thus, when I learned that the “The Chief Judge’s Task Force on Commercial Litigation in the 21st Century” had issued a June 2012 report recommending a pilot project that called for one in five commercial cases to be sent to mediation, I was enthusiastic.  The pilot program is set to begin on July 28, 2014, and will apply to cases in the New York County Commercial Division only.  The pilot is scheduled to run for 18 months, to give the users and the courts time to assess its efficacy and to determine if the program should be expanded to other counties.  The program has some flexibility, including an “opt out,” or exemption on good cause shown.  While undoubtedly there will be some resistance, my belief is that many parties who go through the mediation process will be satisfied with it and will return—even voluntarily—to mediate other matters.  When mediation works, it is a “win” for the client.  A matter that might spend years in the court system can often be resolved in a day or two, thus saving the client considerable time, money and the inevitable business disruption that a litigation brings.  The solutions reached in mediation can be innovative and creative, and in many cases serve the clients in a better fashion than a judicial decision.

For the rest of “Start Spreading the News:  Mandatory Mediation Comes to New York,” please read the full article from Law.com by clicking here.

Make the Most of Your Mediation: The Brief

Hon. Lynn Duryee (Ret.)

Hon. Lynn Duryee (Ret.)

By Hon. Lynn Duryee (Ret.)

Lawyers wonder, what’s the point of writing a good brief when it seems that judges barely skim them?  Judges grumble that briefs are notoriously dense and barely readable.  And yet an informative and concise brief is the time-honored way to convince the judge of the merits of your case.  In mediation as well, the brief presents a golden opportunity to have your case viewed by the neutral in the best-possible light, free of annoying objections and interruptions from your opponent.  So is it worth the effort?  According to Chief Justice John G. Roberts, “There’s nothing better than a well-written brief.”

Let’s get to work.  Here are 10 pro tips to make your next brief a winner:

1.  Start writing two weeks before the brief is due.  No one, but no one, can write his best brief the day it is due.  The process of writing and thinking is deep and mysterious.  Even great writers accept that they can only go so far in one day.  You need time to develop your thoughts and arguments.  Set the stage for success by starting the brief well in advance of its due date

2.  Force yourself to complete a draft.  Many lawyers, disheartened by the enormity of the task before them, stare at a blank screen for hours, writing and rewriting the opening paragraph, unwilling to go on until it is perfect.  Instead, try thinking of your first paragraph as a placeholder, something that you will change once you write a draft all the way through.  A terrible first draft will be far more valuable to you the following day than a perfectly crafted opening paragraph because you will have thought about your case from start to finish.

3.  Lead with the big picture.  Your reader needs context to appreciate the details in your brief.  Lead off with a one- or two-sentence introductory description of your case.  For example:

  • This admitted-liability high-speed car crash caused traumatic brain injury to plaintiff.This lawsuit between neighbors in Tiburon pits plaintiff’s million-dollar view against defendant’s vintage oak trees.
  • Remember, a brief is not a mystery novel; the reader shouldn’t have to wait until the final page to figure out what kind of case it is.

To read on to section 4. Overcome writer’s block, please read the full article from Law.com by clicking here.