A Lot of Common Sense and a Little Mazel Can Go a Long Way

Recently I mediated a contract dispute between a health care provider and an insurer. The main issue concerned billing practices for claims submitted. The plaintiffs alleged that claims were underpaid or denied improperly through use of a method outside the industry standard. The parties were in the midst of litigation.  Summary judgment was denied after mediation was initiated. An interlocutory appeal likely was not viable and the case was factually complex.  Potentially hundreds of individual claims were in dispute. The parties had an ongoing business relationship so were concerned that more claims could accumulate before a final judicial decision would issue.  A jury trial of approximately 3 weeks with experts on both sides was looming, with no date set in the near future due to pandemic caused court backlogs. Counsel  were experienced and treated each other professionally.  Understanding that settlement would benefit all involved, counsel had attempted to negotiate a resolution at several earlier points.  However, all their efforts had failed.  Anxiously and skeptically, they turned to mediation.  

After a mere 2 hours of mostly joint session by video conferencing, and much to the surprise of counsel and their clients, the parties settled the entire matter.  How did this happen?  On reflection, a lot of common sense and a little mazel (Yiddish for luck) made their agreement possible.

1. Preliminary Caucuses By Phone.

The Common Sense. After receiving each side’s Mediation Statement, I conducted conference calls with counsel together, followed by separate call with each counsel and his client.  In this way I was able to introduce myself to counsel; to listen to their respective demands and positions;  to assess how well they were communicating with each other and with their clients;  to determine everyone’s facility with Zoom;  to explain in detail to the clients the elements and stages of the mediation process;  to answer their questions about it;  and to begin to establish trust and rapport among everyone.  These calls replicated what often transpires during the opening session of in person mediation and allowed everyone to “hit the ground running” at the beginning of the Zoom session.  Additionally, these calls allowed me to demonstrate my respect for the desire all expressed for an efficient mediation process.

The Mazel. In reviewing the Mediation Statements and in listening to counsel, I realized that their focus was solely on their clients’ economic interests in this particular case, and not at all on their shared long-term non-economic interests. So, I asked in a neutral tone whether any consideration had been given to aligning their respective internal business processes as a way to prevent future disputes from boiling over into litigation.  That one question gave them permission to “think outside the box” creatively with their clients without losing face with them. That single question reframed the dispute by expanding possible solutions for the parties to investigate. Each side agreed to develop a proposal for improved business processes before the Zoom session.  I gave them the option to submit it to me confidentially or to share it with each other. At the outset of the Zoom session they exchanged proposals.  At that moment, the impasse dissolved. It was as if the parties had turned the key in a lock, revealing a large vacant room.

2. The Joint Zoom Session.

The Common Sense.  When introductions were made everyone agreed to use first names.  I emphasized to the parties that their active participation was welcome and would be vital in crafting a solution they would be required to implement in the future without counsel looking over their shoulders, notwithstanding that counsel were present during mediation. My explanation of the relative roles of the participants created a safe space for the parties to interact.  I listened to them, posed questions to them and encouraged them to negotiate directly with each other. They did, and counsel wisely did not interject inappropriately. 

The mazel. One of the defendant’s lawyers was a math and technology whiz.  With information provided by plaintiff’s lawyer before the joint session, he recalculated plaintiffs’ claims until he was satisfied with their accuracy and then explained to plaintiff’s lawyer the mistakes he had made. At the outset of the session, plaintiff’s counsel admitted his errors, which allowed the parties to negotiate from an agreed basis as to the maximum value of plaintiff’s claims and defendant’s exposure. Further, by the date of the Zoom session plaintiff was sufficiently comfortable with the prospect for a successful outcome that it dropped its demand for pre-judgment interest which had been accumulating steadily since suit had been filed over 4 years ago. The defendant’s senior representative (1 of 3 present) was a new employee authorized to examine the insurer’s internal bill review policies and recommend appropriate changes to them. He recognized that the parties’ proposals presented during mediation were both closely aligned and represented a major departure from their prior negative business dealings. Feeling empowered in the safe space of the mediation setting, he volunteered to discontinue the practices that had given rise to litigation and to designate a senior adjuster with whom plaintiff’s claims manager could work directly going forward. This demonstration of good faith shifted substantially the energy between the parties. 

Now they were ready to turn in earnest to settlement of the monetary claims.  Defense counsel sensed the importance of building on the positive dynamic evolving among the parties. He said that a fresh start with the plaintiff would be more important to both sides in the future than woodenly staying with defendant’s settlement number and jeopardizing settlement altogether.  Accordingly, with permission from his client, he generously took the unorthodox step of “negotiating against himself” to try to bridge the difference in this case between monetary offers and counteroffers. At this point a bit of self-deprecating humor spontaneously initiated by one of defendant’s representatives sent everyone to caucus wearing a smile.

3. Caucuses in Breakout Rooms.

The Common Sense.  Each side held a private conversation between lawyer and client.  They asked to caucus in order to digest the information that had been exchanged so swiftly during the joint session. Each side invited the mediator to join them after a few minutes.  Zoom made this arrangement easy to execute.

The Mazel. The parties generated an agreement with minimal assistance from the mediator. Before the mediator joined the caucuses, counsel probably had advised their respective clients that the time value of money favored settlement by the plaintiff now even at a lower amount than originally sought. 

Moreover, all counsel likely had emphasized that resolution through mediation would avoid the stress, cost, and delay that litigation promised no matter who won. And, agreement now would let each side return to work on new footing.

4. Return to Joint Caucus. 

The Common Sense. The parties agreed on a number both considered realistic and rational.  They agreed that defense counsel would draft a Settlement Agreement and Release.

The Mazel. Hopefully, the parties have entered into a durable agreement because they created it, not counsel and not the mediator.

5. Conclusion. Perhaps the abundance of common sense coupled with the small amount of mazel on display in this dispute produced a resolution that could  be replicated in one of your matters.

                       

Nancy Shuger

Nancy B. Shuger is based in Maryland.  After retiring as a trial judge in 2011, she launched her mediation business. Her practice is multicultural, focusing primarily on family, small business, workplace, and congregational matters. She is experienced in, and enjoys, working with self-represented parties.  MORE >