Page 3 - Alternative Dispute Resolution

NYLJ.COM |
Alternative Dispute Resolution | MONDAY, NOVEMBER 16, 2015 | S3
Complex disputes and investigations require experienced financial experts. Do you have the right team on your side?
EisnerAmper’s team assists clients with complex financial analysis and expert testimony in dispute and investigation settings, including commercial disputes, intellectual property disputes, marital disputes, forensic investigations, bankruptcy and restructuring, and business valuations.
Our experienced professionals have the skills and expert witness experience to provide effective, quality services. Make the right call. Contact EisnerAmper.
Read more at EisnerAmper.com/Disputes
Let’s get down to business.® eisneramper.com 212.891.4028 DennisS.Neier [email protected]
doomed to fail. Requiring an opening round of negotiations in the multi-defendant context forces the confrontation and resolution of these complex issues and avoids a pointless mediation with plaintiff.
Even in simple two-party mediations with- out excess insurance issues, the requirement of an opening round of negotiations prior to mediation ensures that the carrier has fully conferenced the case and obtained the req- uisite level of authority. This process also protects the defense attorney from showing up at a mediation with his or her hands tied. Countless mediations have ended with a frus- trated defense attorney telling the mediator and plaintiff that he cannot reach the adjust- er or the adjuster cannot reach his or her superior or “claims committee.” Here, even though the parties may desire to continue negotiations, the process stalls because the decision makers are not only absent from the room but the structure of the insurance company is such that they are not able to
The requirement of an opening round of negotiations prior to mediation ensures that the carrier has fully conferenced the case and obtained the requisite level of authority. This process also pro- tects the defense attorney from showing up at a mediation with his or her hands tied.
make decisions during the pendency of the mediation. Sharpening the issues and defining the settlement range in advance of mediation goes a long way to eliminate these issues and instead gives mediation a real chance at success.
Insisting on an initial round of negotiation before mediation may also obviate the need for mediation itself. A first offer may open a dialogue directly between decision makers and lead to a settlement without incurring the expense of mediation. Encouraging an honest and direct dialogue between the principals to a settlement can rarely cause damage and will usually sharpen the issues for the mediator.
The opening round of negotiations may also cause parties to revisit their expectations and valuation. A thoughtful practitioner won’t react with anger to an adversary’s very dif- ferent evaluation. Instead, it is the best prac- tice to respond with careful reconsideration and to determine whether or not the points learned have merit or how to persuade the other side to see the case your way. There is some chance that the reaction to a pre-media- tion demand or offer may result in the parties “digging in” and of course, that’s why we have trials. However in many instances, reflection on the respective and relative strengths and weakness of a case may cause litigants to reevaluate and reengage in negotiation and mediation from a position of reflection.
The benefits of requiring an initial round of negotiations before mediation are enjoyed by both sides. There can be no question that
a mediation set up to bridge a defined gap between sharpened issues is in a much bet- ter position to succeed than one that starts without any real parameters; this saves time, money and resources for all involved. How- ever, requiring a defendant to make an offer in advance of mediation also comes with some strategic meaning that is unique to the plain- tiff. In fact, from the plaintiff’s perspective, insisting on a pre-mediation offer may be the best and only way to mediate on an even playing field.
It is common knowledge that the vast majority of civil lawsuits settle before trial. This often creates a natural belief amongst negligence defendants (and their insurance carriers) that most plaintiffs come to media- tion to settle and will ultimately accept the last and best offer in lieu of incurring the cost, work, risk and wait of going to trial. The tradi- tional pattern of a plaintiff’s demand followed immediately by agreement to mediate before any negotiations only reinforces that belief. When a plaintiff agrees to mediate without the defendant giving any firm indication of their position, the defendant can easily perceive weakness or a desire to settle for the “last and best” offer. Insisting on a pre-mediation offer sets firm parameters that plaintiff will negotiate in good faith but only if that good faith is returned by the other side.
Requiring a pre-mediation offer will help identify a defendant that intends to use media- tion as a tool to see how low they can get the plaintiff to go without any real intention of settling the case. This tactic is often used for the purpose of setting a new ceiling for future negotiations at trial. Insisting that the defen- dant and their insurers have some “skin in the game” will weed out those window shoppers and lead to mediations where everyone at the table has already bought into the process and has come prepared to put their “best foot” forward. If a defendant is unwilling to mediate under those terms, then the plaintiff that declines mediation doesn’t lose any real opportunity to settle the case because the defendant was not serious about settlement in the first place.
Consider for a moment if the scenario were reversed: A defendant asked a plain- tiff to mediate and solicited a settlement demand. In response, the plaintiff refused to make a demand and instead insisted that the defendant negotiate with blind parameters. It seems highly unlikely that any defendant would mediate under those circumstances, and if they agreed to mediate without the plaintiff putting a price tag on the case, would that not signal desperation or fear on the part of the defendant? Would it not increase the plaintiff’s leverage going into the media- tion? Yet, in comparison, the vast majority of mediations in this jurisdiction happen with no pre-mediation offer and the signal sent is heard by the other side loud and clear.
Some may suggest that insisting on a pre-mediation offer can stifle settlement negotiations as some insurance carriers are unfamiliar with the concept or unwilling to engage in pre-mediation negotiations. This is a false narrative. If an insurance carrier is unwilling to make any offer at all in response to a settlement demand, then that case simply was not in a position to settle. In fact, walking away from the mediation may be » Page S11
Take a “Modern View” of the NYS Legislature. We did.
Our new “Modern View” design improves your work experience through easier navigation, new features, and improved system stability and responsiveness.
Tracking legislation is easier with Modern View!
Sign up today and get
THREE FREE MONTHS
added to your subscription!*
(518) 455-7633
(800) 356-6566 [email protected]
*Offer expires 6/30/16