Does your mediator know the difference between “gross” and “net” exposure? If not, read this before your next coverage dispute.
Mediating a coverage dispute is not the same as mediating a casualty loss or a commercial dispute. Coverage mediations bring a different set of expectations, and they require a different approach.
In coverage disputes, the parties are often highly entrenched. They understand the law, the risks, and the potential rewards of their position, at least from their own client’s perspective. They expect the mediator to be just as knowledgeable: familiar not only with the cases cited in argument but also with the cases that may have been overlooked.
The scale of the dispute also significantly shapes the process. Mediating a $1 million case is very different from mediating a $10 million (or larger) exposure. A capable mediator must grasp whether the dispute is based on “gross” or “net” exposure and understand who the true parties at interest are, and (of course assisted by the parties’ pre-mediation briefs”) whether there are either overlapping areas, or where the risk analysis requires adjustment by one or both parties in order to resolve the case. Many of the cases cited in the briefs will be new to the mediator, and the parties must decide how much preparation they want the mediator to undertake and, even if they want the mediator to educate themselves on the case law. Both parties will likely advise the mediator what they consider the presiding judge will decide, however the mediator should have an understanding of the areas which a judge and separately if applicable, what a jury will need to consider.
While mediators are not expected to “decide” who is right, they are expected to understand the nuances of the issues, the appellate structures (especially since many coverage disputes escalate if unresolved), and, ideally, the inclinations of the judge assigned to the case.
For arbitrations, the dynamic shifts again. Some parties seek arbitrators who will stick closely to precedent; others prefer a decision-maker who is open to arguments about fairness or the equities of the situation. Knowing what you need in an arbitrator is just as critical as in a mediator.
In short: do your homework.
Research your mediator or arbitrator carefully. Make sure they fit the specific needs of your dispute. This avoids the all-too-common frustration of a mediation devolving into little more than a shuttle service for offers.