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A very few years ago mediation never even came into our vernacular. For the majority of most of our professional careers, there were mandatory settlement conferences scheduled by the courts and that was the time that settlement was discussed, not before. Those of us who specialized in specific areas of law dealt with the same opposing firms, usually the same individuals and many times the same insurance companies. The mandatory settlement conference was usually when discussion of settlement was initiated. For whatever reason, we just weren't thinking settlement up until that time. A few years ago things changed, at least in California. The courts became so crowded and the judicial officers became so scarce that the courts essentially were no longer able to provide the mandatory settlement conference forum. At that point, lawyers from the local bar association were selected, usually with little or no training in mediation techniques, to act as de facto judicial officers for settlement conferences. On a hit or miss basis some were effective, and some were not. The cases that did not settle got tried.

At about this same time, a number of retired judicial officers decided to form independent mediation type services. In California, the best known is JAMS (Judicial Arbitration & Mediation Services). This cottage (garage) industry saw retired judges and some individual attorneys specializing in mediation of pending lawsuits. Over a short period of time, the responsibility for resolving cases outside of trial fell onto the private sector which blossomed with a number of different individual companies offering this same mediation service.

From the plaintiff's perspective, this transition came as somewhat of a shock. All of a sudden, there was a request to mediate early in the case. Certainly from a plaintiff's perspective, mediation and settlement should be attempted at the earliest opportunity for a host of reasons. We have learned that sound economic reasons dictate that mediation is also in the insurance company's interest. Those economic interests of the industry merged with our own to create a growth industry termed mediation. The mediation industry seems to have evolved within a few years to become the alternative of choice to the legal profession in seeking to resolve cases. As we now know, there are hundreds of judges and now hundreds of lawyers who do nothing but mediate disputes. Additionally, there are courses and even schools wherein mediation techniques are taught, and the practitioners of mediation have become just as skilled as any advocate or judicial officer. I don't believe we have reached the end of the evolution of mediation, and I expect it to grow as our needs for problem solving in our country grow as well.

II. What Does the Plaintiff Want out of Mediation?

The plaintiff wants resolution of the case. Many times in insurance bad faith matters, plaintiffs are desirous of a forum to express their frustration and anger and a forum for an apology to be transmitted to them. Additionally, plaintiffs are looking for both compensatory and additional damages based upon the perceived harm or wrong that they have suffered. The insurance company is looking for a way to resolve the case expeditiously and extract itself from litigation which is time consuming and expensive both to the company, its lawyers and its personnel. Additionally the company is looking to resolve cases that will not bring its company name and its company practices into public consciousness. Insurance companies perceive that if their name is displayed in the press as a result of a jury verdict, it will only spawn more litigation and may bring about unwanted attention of regulators. Therefore, if matters can be resolved informally and out of the public eye, the insurer benefits as well. Again, the time is money axiom comes into play.

Therefore, the economic interests of both plaintiffs and their attorneys, the defendant insurance companies and their counsel coincide or overlap at the mediation table. Given a company's desire to resolve a dispute and the plaintiff's desire to resolve the matter, the mediator has an opportunity, on a case by case basis, to resolve social conflict.

There are a number of mediators today who approach this phenomenon from almost an institutional point of view. Mediators gain experience with individual insurance companies and even individual claims personnel they begin to create a fabric of understanding of the intricacies and uniqueness of each company's philosophy and culture. This information is found in the underlying facts of the case as well as the interaction that the mediator has with both the insurance company's counsel and its professional claims staff. This interaction, in the long haul, is proving to be very beneficial. It allows the mediator to be very candid with the insurance company's counsel, based on continuity of mediations and gain some general understanding of the value of cases over the long haul.

Perhaps the latest entry into the field, the plaintiff's lawyer and his client, become the ones that are outsiders. They do not have the perspective of continuity since the client is engaged in litigation for the first time. There are of course some exceptions in that some lawyers handle volumes of insurance cases with individual insurance companies and get to know the culture and their adversaries which enhances the ability to settle cases in the long haul.

Overall, the responsibility and technique of the mediator is to find a middle ground between the demands of the plaintiff and position of the insurance company and restate a settlement based on encouragement of one or both sides to resolve the matter. The techniques involved in that process vary by personality, jurisdiction and company culture. Perhaps the most important variable is the facts of each case.

The purpose of mediation is to provide a private alternative to a very public system, our courts. Certainly insurance bad faith cases are well suited to the mediation process, and, in today's world, it is very desirable to mediate these cases. Usually there is an agreed upon group or list of mediators to choose from, or in other circumstances, there may be a specific mediator that would be agreed upon by both sides. In my experience, a meaningful mediation should be the subject of a full day of meetings between the parties. At first, each side may be more interested in learning the other side's best number rather than revealing their worst number. It usually takes a half day for the public positions to be stated and some jockeying of ideas to occur. Thereafter, the mediator really gets down to the meat of the matter and begins working on both sides. Prior settlement negotiations or discussions between counsel, depending on the personalities, is usually a positive aspect that allows each side to know what the other is generally thinking in terms of their position on the case. Pre-mediation communications also provide the mediator with a starting point upon which to work on both sides. If the parties learn prior to the mediation that they are too far apart, it may save the parties the waste of a fruitless mediation with no possibility of success. In this situation, it may take a non-consensual development such as a rejected summary judgment motion for the parties to become close enough together for mediation to be viable.

Most importantly, assessing the plaintiff and/or the plaintiff's witnesses will be important for the insurance company in that its evaluation will be influenced by the plaintiff's appearance to an ultimate decision maker such as a judge or jury.

Clearly, the most important people to attend the mediation are the plaintiff or plaintiffs and any decision makers that may be with them, i.e. a spouse, guardian or conservator. On the other hand, the insurance company should be expected to bring with it, in person, a decision maker with ultimate claims making authority.

III. The Role of the Attorney

The role of attorneys in a mediation is to present the facts, be an advocate but also to understand that their role is an integral part of the mediation process. Becoming a heated advocate or intransigent at the mediation table when facing the opposition is not an effective technique for case resolution. Appearing knowledgeable and desirous of a fair resolution presents a position of strength as opposed to weakness. If an attorney at a mediation is angry and boisterous, it can signify that the attorney is worried about the case and probably posturing to cover its legal and factual weaknesses. Whether any information or evidence should be held back or if all should be presented should be decided on a case by case basis. Normally, if there is some negative yet highly important fact, it should be presented and made known to the other side. If the negative fact is not revealed to the other side, the mediator should be informed, with a restriction on disclosure. The mediator then has to advise the other side but make known to the other side that there is an important factor yet to be considered. It then becomes the responsibility of the mediator to convey in some way that potential threat to the other side. I believe that is a two way street. The real question becomes the trust that both sides place in the mediator. Usually that trust evolves with the mediator over a period of time. The ability and technique of the mediator in presenting that evidence in an appropriate way being careful to maintain its confidentiality.

It has not been my experience that testimony of witnesses at a mediation benefits either side. I believe that the process evolves based on how the mediator analyzes the case. Again, both sides must have confidence in the mediator's knowledge, resourcefulness and ability to properly analyze the case. Judges have gone into the mediation business not just because they have learned those mediation skills in conducting many mandatory settlement conferences in the past, but also because of the respect that they may command from their often vast experience in the civil trial system. Supplementing this group is a whole industry of mediators who are educated outside of the courts has developed who have further refined mediation and elevated it to a new level as a legitimate technique. These mediators may lack experience but they may often be able to contribute through the application of studied techniques, treating mediation as a science.

At this point, there are some law schools who are actually focusing on problem solving as a basis for legal education. That philosophy will result in a future generation of lawyers with more refined training. I believe that a lawyer who receives mediation training will become a more effective advocate. Understanding mediation skills and the dynamics of what is taking place on opponent's side of a mediation is a very important asset for a lawyer in today's world.

IV. The Resolution of a Case

At the time a case is resolved, depending upon the practice of the mediator and the relationship between the parties, a simple handshake is sufficient, particularly when there has been a long relationship between the parties. If the parties are new to each other and to the mediator, usually the mediator will require a written document to be executed and signed at the time by both parties to finally resolve the matter.

The value of the process is preserved when both sides are ultimately bound and the agreement should be memorialized at the conclusion of the mediation. Even a form settlement agreement should be available from one or both sides and should include the specific terms of settlement. I believe this will be a part of future mediation resolutions. Incorporating these details into the mediation itself can bring a far more immediate sense of finality and avoid the possibility of a party or an attorney to develop "second thoughts."

V. The Future of Mediation

In the not so distant future, I expect there would be electronic mediations, that is mediations that occur by either telephone or audio visual transmissions wherein we see everyone on the television and we can have a mediator from any location. The process would include a responsible party from the insurance company at its home office, or even at their home, so travel costs are reduced. Counsel and the parties can be available from their homes or from a central office. The mediator could proceed either from a central location or their home. However, this should not be over emphasized in that part of the mediation process that provides the magic of settlement includes the ability of people to meet face to face and eye to eye. There is nothing more important today than that process. It may well be, because of the nature and evolution of the electronic media and the internet, the parties will have the ability to resolve cases on a electronic basis, but will find that a face to face mediation is much more likely to result in a settlement.

I believe we will also see specialized mediators. Just as there are specialized litigators for plaintiff and defense, there are mediators specializing in the different areas of disputes. It may take a half day in mediation time to explain to a mediator how much a company producing a TV movie spends in production and man time to achieve a result when these elements are fundamental to the ultimate resolution of an underlying dispute. However, when a mediator is endowed with the appropriate skills in the area, that half day can be utilized to discuss the substance of the case.

In insurance matters, if the mediator is a skilled professional in the area of insurance in question, he or she can avoid the technical learning curve and move directly to the specific issues that are in dispute between the parties to work out a resolution.

I believe there will evolve a standard type of settlement agreement that will be either brought to the mediation by one side or by the mediator. Certain paragraphs will be selected for inclusion in a final draft of a settlement agreement, printed and signed by all parties at the time of settlement constituting the final document. That could be accomplished today because many firms offer the same form settlement agreement. There is no reason that those same basic terms cannot be restated in a generic document that has 90% applicability to most insurance disputes.

Additionally, there may very well be mediators selected by insurance companies after a case is filed, or even before a case is filed, so that there is a forum for an insured's counsel prior to filing a lawsuit. The most advantageous circumstance for an institutional litigant, such as an insurance company, is to have a forum that is known and available to plaintiff practitioners providing probable resolution of the case, i.e. a genuinely objective neutral and a company willing to listen before a lawsuit is filed. This outlet would provide for a significant cost reduction to the insurance company and to the plaintiff's counsel and would enhance the prospect of settlement even before litigation is commenced.

Some companies are willing to negotiate cases before litigation and do so on occasion. Insurance companies in the future may want to encourage this process and expand it. It is not a sign of weakness by the insurance company to offer that alternative because it knows that the only option for a plaintiff is to bring an action in a state or federal court. A lawsuit immediately involves far more expense than the informal resolution behind the private closed doors of a mediator's office. All such mediation efforts would be privileged and not admissible at trial.

VI. Conclusion

Mediation may very well be one of the most important aspects, if not the single most important aspect, of litigation as we begin the next millenium. Hopefully our law schools will encourage and promote problem solving as opposed to pure litigation as a means to an end which is the expeditious resolution of a client's problems.

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