Preparing the Lawyer
Lawyers often balk at being told how to prepare for something as commonplace as mediation. Suffice it to say that, as with trial, success (at least avoidance of failure) comes with preparation. The most successful coverage mediations are where counsel has necessary facts and positions at hand and can present a clear path through a maze of policy endorsements, indemnity agreements and sometimes confusing legal concepts. Mediation preparation is no time for counsel to rely solely on legal briefing and expect to be passively “mediated.”
Preparation requires development of a mediation strategy, including anticipated responses to questions from the mediator, how and when to disclose certain work product that could cause the opposing party to make a substantial move and, in cases with multiple issues or parties, where to place the focus of your settlement efforts. Preparation requires all facts to be at hand. Whether mediation is premature is often due to one or more parties lacking seemingly basic information.
In preparation by policyholder lawyers:
Have all policies been identified?
Is other coverage available to the client, for example, as an additional insured?
Have all carriers been notified and requested to attend the mediation?
Are there indemnification agreements?
Has the carrier counsel provided you with what you need to evaluate the case?
In third-party coverage cases, are you sufficiently familiar with the facts and legal theories in the underlying case to the extent they affect indemnity exposure, coverage, and allocation among carriers?
In preparation by carrier lawyers:
Has all other coverage potentially available to the insured been identified?
Have you coordinated coverage issues with carriers on other triggered policies?
Will the mediation turn into an allocation dispute?
Are you and the mediator prepared for ways to deal with that? Has underlying exhaustion or aggregate limit information been obtained?
Are there retention issues that need to be addressed?
Has the status of an underlying case been updated and a coverage evaluation done?
Have reserves been properly set to allow a settlement at the end of the day?
Do you know what conditions may be imposed upon the payment process and how quickly a check can be cut if a settlement is reached?
Finally, particularly in multi-party coverage mediations, sharing strategies with lawyers for similarly situated parties is always helpful. A group or subgroup can better present positions and share its ideas with the mediator. The mediator can be helpful in identifying such groups and logistically dealing with them. An auditorium of isolated parties makes for a long, frustrating day.