Conference Issue 2016


Mediators debate who should be present

By Kate Tilley, Resolve Editor

Mediation is a vexed subject — even a panel of mediators at the NZILA conference in Queenstown couldn’t agree on who should be present.

Brisbane-based commercial mediator Ian Hanger QC said it was essential insurers be present, although in 50% of mediations he conducted they were not. "I have had insurers say no after a mediation that’s taken all day and they have not even heard the arguments."

Michael Parker, a partner with Queenstown-based Parker Cowan, disagreed. "I represent insurers and I should be given parameters within which to settle," he said. "Sometimes there’s an outrageous request, like $100,000 becomes $1 million, but that’s rare. It’s a resource issue for insurers and I should be doing my job."

Speaking from the floor, Melbourne-based Chris Rodd, who is now a consultant after being an insurer’s inhouse lawyer for many years, said: "It’s critical for the insurer to be there; they make the decision."

Nina Khouri, a mediator and senior lecturer at the University of Auckland’s Law Faculty, agreed the decision maker should be present. She said there may be a fear that being present was a tacit agreement to pay something.

Mr Hanger said listening to a plaintiff was worthwhile for the other party. "Just to be there and have someone acknowledge [your position] is often worth a lot of money. An apology means a lot and sometimes we overlook that."

Ms Khouri agreed, saying "being in the same room can seal it".

She told the session she was "a big fan" of pre-mediation discussions, even if it was only 10 minutes. If a client was unfamiliar with the process it helped them "get into the right head space and it helps me to get a road map of possible sticking points".

"Once you have decided to mediate, you are strategically engaging with the other side to strike a deal. Intake conferences are part of the mediation process."

Mr Hanger said he invited parties to an intake conference a week before the mediation and did not charge a fee for it, but less than half took advantage of that. "A poor little plaintiff can feel left out if everyone else is on a first names basis. A cup of tea in chambers a week before can put a plaintiff at ease."

A question from the floor asked if that implied bias. "Isn’t it like the referee meeting the All Blacks before a game?"

But Mr Hanger said he offered the opportunity to both sides. "Parties are happy for me to do that."

Mr Parker said there was no detriment in not having a "touchy-feely meeting beforehand, but I recognise it could be important", particularly for lay plaintiffs.

Panel session moderator and conference chair Richard Johnstone asked the mediators how they began sessions.

Mr Hanger: "I follow the text book. The longer the opening session goes, the better the prospects of success. They can swap ideas and all the cards come out on the table."

Mr Parker: "I prefer everyone in the room to be completely frank and open. People take time to warm to that. Lawyers can get in the way sometimes [and you] need the plaintiff to speak and get around the lawyer whose initial advice may not have been as robust as it should."

Mr Hanger agreed, saying if lawyers were an impediment he could ask to see the parties alone. "Clients are paying good money because they want to get [the dispute] resolved."

The panel participants agreed a joint session’s purpose was not to reach agreement but to flesh out issues, put aside what was agreed, and get to the nub of the dispute.

Mr Parker said some lawyers gave formal addresses, as though they were in court, as their opening statements. Ms Khouri said she was lenient if that occurred. "The joint session is for each side to take the other’s measure."

Mr Hanger said he was reluctant to interrupt, "even if they are boring me stupid. They feel they must earn their fee".

Mr Johnstone said he liked his clients to speak first, but agreed he had "listened to soliloquies that have made an outcome less likely".

He said mediation was often about "lancing the boil of [a plaintiff’s] distress", particularly with Christchurch earthquake claims that were unresolved so long after the event.

Mr Hanger agreed mediation could be cathartic.

Discussing various mediation techniques, Mr Parker said it depended on the dynamics in the room. "There’s no one way to do it." Ms Khouri agreed. "Part of the mediator’s role is to let the parties know the consequences of their actions."

Mr Hanger said the mediator had to encourage reality testing of the arguments. "You need to reduce expectations. If they make a silly offer, all you can do is put it or ask how they think the other party will react. It’s demeaning if you have to make 10 offers and counter offers. Sometimes people are reluctant to back down. It’s a good idea to ask how they justify an offer and [get them to] break it down."

Ms Khouri said when everyone got "tired and irritated, you must identify your negotiation currency and spend it wisely.

"Sometimes an insurer can offer a little less so a plaintiff can counter offer and feel they have had a victory."

Mr Hanger admitted he had "tossed a coin with the consent of the parties" and said a mediator’s offer, as a "last hurrah to get it finished ... generally works". But he admitted he didn’t always pick the mid-point between both parties’ offered amounts.

Mr Parker said good mediators had "a bag of tricks" to get mediations over the line when they faltered late in the session.

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Resolve is the official publication of the Australian Insurance Law Association and
the New Zealand Insurance Law Association.