While insurance lawsuits involving claims directly between an insurance company and its policyholder make up a relatively small percentage of our courts dockets, cases triggering liability insurance from automobile accidents to securities class actions constitute a very large percentage of all cases before our courts.
It is a common understanding among trial lawyers that decisions are made emotionally and not rationally. We are always looking for the emotional hook on which to hang the case and sway a jury to see the case through that emotional prism. Now science is teaching us that decision-making is actually physical.
We have all encountered the spiteful litigant. Maybe it’s the husband in a divorce who says that he is going to Las Vegas and putting the marital estate on red or black at the roulette wheel. If he wins he will split it with his ex; if he loses, neither of them get anything. Or perhaps it’s a partner in a dispute that says that he would rather the business fail then have to share its value with his soon to be ex-partner; or a litigant that states that he would rather drive the defendant into bankruptcy even if it means that he would not recover for his injuries.
I have encountered some confusion among lawyers and mediators over conflict of interest and disclosure requirements applicable to mediators in California. Some say there are no requirements at all. Others say that there are rules requiring disclosure. Turns out, both sides are right. In court ordered mediations conducted by panel mediators, California Rules of Court, Rule 3.855 provides guidelines regarding conflicts of interest and disclosure.
The end of the day is nearing and the mediation has ground to a halt. The parties have narrowed the gap between them, but cannot close it. Is it time to suggest a mediator’s proposal? Does a proposed settlement amount coming from the mediator have a reasonable likelihood of acceptance? Are the parties interested in having the mediator make a proposal? If the answer to these questions is yes, then it is time to employ the ultimate impasse busting technique, the mediator’s proposal.
After the evaluative method has been exhausted, and the parties have narrowed the gap between them, the question on the table is what does it take to settle the case. Should the party with the stronger case, make a final effort to bridge the gap? Is there a settlement premium that should be paid or accepted?