Last week, I mediated a case in which two injured plaintiffs seemed ready to negotiate, but could not — held hostage by a dispute between two corporate defendants over additional insured status and contractual indemnity obligations.
Although both plaintiffs were prepared to engage and the gap, on its face, seemed manageable, settlement negotiations on their claims could not begin without first clarifying the defendants’ respective legal and contractual obligations.
Instead, the day was consumed by discussions between the defendants — each contending that they were owed indemnity by the other. As a result, plaintiffs’ injury claims were never addressed.
To his credit, general counsel for one of the corporate defendants acknowledged that the indemnity issues should have been addressed prior to the mediation, and he offered to reimburse the other parties for their share of the mediation fee. It was a thoughtful gesture and assuaged some of the frustration felt by the plaintiffs and their respective counsel — but the fact remained that an opportunity to negotiate had been needlessly postponed.
At times, the obstacle to resolution is simply a failure to prepare.
The issues most likely to derail a mediation are almost always identifiable in advance. Had the indemnity dispute been brought to my attention beforehand, it may have been possible to structure the process differently — for example, by staggering the arrival times of the parties, or by devoting an initial half-day to the indemnity issues and reserving a subsequent half-day for the negotiation of the plaintiffs’ claims. By the time the issue came to my attention, it was too late to take those steps.
These issues are best identified and addressed through a brief pre-mediation conference with the mediator — whether at the mediator’s invitation or at the initiative of counsel. Such conversations help ensure that the mediation is focused on the issues that matter most and structured in a way that allows negotiations to be most productive.
t may not always be necessary to fully resolve indemnity obligations, coverage positions, and other threshold questions before settlement negotiations begin — but those issues must be identified and fleshed out sufficiently for productive negotiations to get underway.
Until those issues have been addressed, the negotiation itself remains a hostage.
As always, it would be my pleasure to assist you and your clients in the dispute resolution process. Please don’t hesitate to contact me if I can be of service.
Best regards . . .
Floyd J. Siegal