Talking About the Confidential Part of a Mediation is Like Talking About the Wet Part of the Ocean

As we noted yesterday, some members of the insurance policy holder bar suggest that coverage counsel hold non-confidential “mediations,” either by calling them settlement conferences or by agreeing that no party will subsequently assert the mediation privilege.

Why?  Because policy holder counsel is concerned that the insurance carrier will commit acts of bad faith during the mediation without having to answer for its wrongful conduct due to the protections of the mediation privilege.

I propose here that talking about the confidential part of mediation is like talking about the wet part of the ocean.

(right — the wet part of the ocean — photo by beglib at morguefile)

Why?  Because confidentiality is what makes mediation possible.  It is what permits the parties to take a time out on the battlefield where everything we say and every move we make can and will be used against us. Private, confidential mediation time is a time when the parties can come together as people rather than as combatants.  And this is true no matter how many zeros follow the first number at issue nor how “fictitious” the “people” are.  Legal entities like corporations, after all, can and do work only through people who have personal interests at stake in, and genuinely felt emotions in response to, the litigation.

Mediation time is a time when the law allows people to recognize that they share a mutual problem, one that yokes them together. It is a time when they can give up carrying the burden and cost of the dispute alone; a time when they are given the opportunity to realize that by drilling a hole in the other guy’s side of the boat, they will sink their own.

But What About the Unremediated Bad Faith?

Mediation commences and ends on dates certain.  If the insurance carrier commits bad faith in refusing to accept a settlement offer during the mediation, you can rest assured that it will continue to commit bad faith thereafter.  So what if you can’t reveal the offer and counter (or refusal to deal) that occurred during the mediation.  Make the same offer again after the mediation is over.  The carrier will once again respond with the same bad faith counter or the same refusal to deal.  Or, to your vast surprise, act in good faith and pay the claim and all damages associated with its earlier refusal to be accountable for the policy terms.

I cannot think of a circumstance in which acts of bad faith that take place during a mediation session couldn’t or wouldn’t be replicated both before or after that mediation session.  The carrier has 365 days of the year, 24-hours in the day and seven days every week in which to commit bad faith.  And the plaintiff may gather evidence of that continuing wrongful conduct on every single one of those days other than the day the parties mediate their dispute.  

All we’re asking — the alternative dispute resolution squad — is one day — a single day — to assist you in the resolution of your lawsuit according to mediation principles and practices.  I don’t think that’s too much to ask, is it?

                        author

Victoria Pynchon

Attorney-mediator Victoria Pynchon is a panelist with ADR Services, Inc. Ms. Pynchon was awarded her LL.M Degree in Dispute Resolution from the Straus Institute in May of 2006, after 25 years of complex commercial litigation practice, with sub-specialties in intellectual property, securities fraud, antitrust, insurance coverage, consumer class actions and all… MORE >

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