Mediation Opening Statements: You Gotta Know When To Hold 'Em, Know When To Fold 'Em

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Explore:  Mediation

In most insurance coverage disputes, the parties arrive at mediation fully aware of the other side’s position. An insured makes its position known when it submits the claim or during the claim adjustment, and an insurer presents its position when it either accepts or denies coverage.

Odds are, there will be no “smoking gun” document waived around at mediation—no “ah-ha” Perry Mason moment. Typically, the mediation opens with both sides showing their best photos of the loss or damage, an estimate, and maybe an expert report or two. After this big production, the parties split to their respective conference rooms. A common scenario to follow typically involves an initial demand from the insured for millions of dollars and an initial settlement offer from the carrier in the range of $10,000.

This kind of scenario, involving seemingly-meaningless presentations (because they are often followed by essentially the same response regardless of the strength of the parties’ respective positions) raises the following questions:

• Is there any value in presenting an opening statement at mediation?

• Do opening statements assist in resolving the case or do they make settlement less likely?

• How can opening statements be made more effective?

Know When To Hold ‘Em

Parties settle cases for a variety of reasons, but often the insured concludes that the proposed deal is better than the likely alternatives. Opening statements can be effectively used to illustrate what those alternatives might be. Rather than simply showing the strength of the insurer’s position, show the insured how the case could play out in trial or through pretrial motion practice. Give the insured a reason to accept an offer other than the fact that the insurer’s argument is simply better.

Another reason to give an opening statement from an insurance carrier’s perspective is that it is an opportunity to speak directly to the insured—the onethe insurer’s the contractual relationship with—without going through opposing counsel. Mediation may be the insurer’s one and only opportunity to speak directly to the insured. Often, opposing counsel can be a filter that reduces the strength and value of a position before it ever reaches the insured. Opposing counsel can also intentionally or unwittingly increase the strength and value of the insured’s position in the insured’s mind. The opening statement is a chance to have an insured see and hear the insurer’s position and recognize that there are rational people on the other side, not a “big, bad” insurance company.

Know When To Fold ‘Em

There are also several reasons why a party might not want to give an opening statement. For example, if the adjuster is at odds with the insured, which sometimes happens and could be the reason the case went into litigation in the first place, it may not be prudent to remind the insured of why it was so angry to begin with. And if the insured felt bullied by the insurance company, an opening statement may add insult to injury.

Also consider the personality of the insured’s attorney. An aggressive litigator, even if he or she doesn’t know much about the facts of the case, can sometimes take an opening statement as an opportunity to beat his or her chest while rattling off phrases such as “bad faith” or “millions of dollars.” You might take the wind out of opposing counsel’s sail by foregoing the opening statement and save the attorney’s antics for another day.

Finally, consider how long the parties are scheduled to mediate. If it is scheduled to be a half-day mediation, precious time may be wasted giving opening statements—although a common experience is that things significantly speed up during mediation at approximately 4:00 p.m.

Decide How To Play Your Cards

Assume there actually is a smoking gun document. Do you want to show all your cards at opening, or is it best to discretely hand that document to the mediator,ask him or her to show it to the insured, and see what happens? How about a hybrid approach? With a hybrid approach, the parties don’t give a formal presentation, but each side speaks for a few minutes about their position and then ends with the requisite “but we are here to negotiate in good faith and hope to resolve this case today.” The negotiation process can then include discussion of certain key facts and evidence.

There is also another strategy to consider. Send the other side a copy of the position paper provided to the mediator prior to mediation. Be specific in the position paper and attach photos, exhibits, case law, and deposition testimony. This way, all cards are on the table and the other side has had the opportunity to digest the strengths and weaknesses of the case before mediation. Often times, an exchange of position papers can negate the need for any opening statements.

If you decide to give an opening statement, do not let it go to waste. Use it as an opportunity to educate the other side on the law and apply the law to the facts of the case. Tell the other side what it will have to prove by showing what the jury charge will look like. When you do this, speak to the insured. Make it clear that the insured is the ultimate decision maker, not the attorney. The sole purpose for an opening statement is to set the stage for mediation. Show only a limited number of photos—choose wisely. Focus on the issues without making any personal attacks and do not tell the other side that it is wrong. Focusing on the risks at play is more likely to result in settlement than trying to convince the other side of your position.

Look At All Of Your Cards

Whether to give a mediation opening statement, in our opinion, should be a game-time decision. You can learn a lot before mediation starts:

• What can you tell from the body language of the opposing party?

• What can you tell from the body language of the opposing party’s counsel?

• Who shows up? How early (or late) do they arrive?

• Do they seem angry, or receptive and cordial?

• Do they hand you a business card? Do they shake your hand?

The mediator can also assist in the decision of whether to have opening statements.

• Does the mediator give a long opening statement?

• Does the other side seem receptive to it? Are they already looking at their watch?

Very often the mediator can set the stage for whether an opening statement is appropriate. Take the cue. Even if the parties have not seen both sides’ position papers, the mediator has.

Go With Your Gut

If the client is receptive to a game-time decision as to whether to make an opening presentation, coverage counsel should use his or her best judgment when the cards are being dealt at mediation. Opening statements can sometimes destroy the possibility of settlement and, likewise, effective presentations can sometimes set the stage for a successful resolution. If the case fails to settle, you may question whether the decision to give an opening statement was the right one. Is it worth the gamble?

TIPS Property Insurance Law Committee Fall 2013 Newsletter - January 17, 2014

 

Topics:  Mediation

Published In: Alternative Dispute Resolution (ADR) Updates, General Business Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Zelle Hofmann Voelbel & Mason LLP | Attorney Advertising

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