22 Aug Navigating Mediation: Addressing Coverage and Liability Issues
Think of mediation as planning a road trip to Settlement-ville. Unless one or more parties are set on going to Trial-town, mediation is typically aimed at reaching a mutually acceptable destination, even if it’s not the precise neighbourhood each party initially wanted. But what if a party wants to take the next exit to a place called Not My Responsibility? In cases involving serious liability disputes, settlement negotiations can quickly fall apart.
This blog post provides tips for managing significant liability disputes before and during mediation to ensure a smoother journey towards Settlement-ville.
HANDLING COVERAGE AND LIABILITY BEFORE MEDIATION
In any case involving insurance, addressing coverage and liability issues upfront is essential. Key issues include:
*Coverage Matters:
Discuss whether claims are covered, the status of additional insured parties, or disputes between insurers. Early resolution of these issues can prevent complications during settlement talks.
*Liability Disputes:
Plaintiff lawyers may want to consider offering liability experts for informal examinations or hot-tubbing in advance of the mediation if one or more of the defendants is disputing liability. Similarly, if multiple defendants may share liability, discussions between them sorting out who is or who is not liable and any apportionment of liability should happen in advance of a mediation, if at all possible. The proportion of liability a party is ultimately assigned can significantly alter their willingness to negotiate and their position relative to the zone of potential agreement.
*Pre-Mediation Conference:
Use a pre-mediation conference to identify any unresolved coverage issues. This ensures that all parties are properly represented and have the authority to negotiate. It can provide a platform for the parties to create a plan for resolving these issues and ensure that all documentation and reports necessary for parties to make firm offers will be ready and shared prior to mediation.
ASSESSING RISK AND NEGOTIATION STRATEGY
When multiple defendants or insurers are involved, assessing risk and determining appropriate settlement offers can be complex. Sometimes, a party may refuse to settle and push for trial. In such cases, the other parties might choose to negotiate without the holdout, possibly using partial settlement agreements like Mary Carter or Pierringer agreements.
*A Pierringer agreement will end the lawsuit against the settling defendant.
*A Mary Carter agreement will keep the settling defendant in the lawsuit to participate in the trial.
DEALING WITH UNEXPECTED ISSUES DURING MEDIATION
Even with thorough preparation, coverage and liability issues may arise or reappear during mediation. A skilled mediator will appreciate and learn about coverage and liability disputes without losing sight of other aspects of the case and should manage information exchange in a way that does not completely sideline a party that may not have an interest in this issue.
CONCLUSION
Complex coverage and liability issues can send a mediation session careening off the road if not dealt with sufficiently in advance. However, even if these issues arise at a mediation, a skilled mediator who senses potential trouble ahead will help navigate the detour in an effort to get you (closer) to a mutually agreeable destination.
ABOUT THE AUTHOR
Logan Cooper joined the Cooper Mediation team in November 2017 and devotes 100% of her professional time to mediating at roster-rates. She has mediated over 400 cases in the areas of personal injury, property damage, long-term disability and other insurance-related disputes. She has handled global mediations, cases with multiple parties, self-represented litigants and cases with complicated technical and interpersonal challenges.
Logan can be reached at logan@coopermediation.ca or (416) 726-1344.
To schedule a mediation with Logan, visit: https://coopermediation.ca/logan-cooper-online-calendar/.