Mediation: Understanding the Process Helps Practitioners Achieve Success

WDC Journal Edition: Fall 2004
By: Ann Lampiris

Mediation is a cooperative problem solving process where a neutral professional assists parties in clearly defining the issues in dispute and reaching agreements that are in the best interests of all concerned.

One of the first Wisconsin forums to mandate mediation as a regular step in the conflict resolution process was medical malpractice litigation as governed by Chapter 655 of the Wisconsin Statutes. As of September 1, 1986, the director of state courts was charged with establishing a mediation system that complied with Ch. 655, Wis. Stats.

While § 655.44 makes a “request for mediation” optional prior to suit, § 655.445 mandates that a request for mediation be filed within 15 days of filing a court action. Additionally, no discovery, pretrial conferencing or scheduling may be held in the Circuit Court until the expiration of the mediation period (90 days after the director of state courts receives the request if delivered in person or 93 days after date of mailing). The Health Care Liability and Compensation statutes (Ch. 655) carefully outline a procedure and the establishment of mediation panels in an effort to resolve disputes outside of the court system. The procedure was set up to be inexpensive; the filing fee is minimal at $11.00 and since there is no record of the mediation and no experts are allowed, there are no stenographer or expert fees.

The establishment of Ch. 655 came at a time when there was at least a perceived crisis in the medical malpractice arena and the law was intended to speed up the process, make it accessible to all parties and keep costs low so that malpractice insurance premiums did not escalate at an unacceptable rate. Initially, the case was heard by a panel of three: a lawyer, a doctor and a lay person who rendered a decision which was admissible at trial if the decision was not accepted by the parties. Trial to the panel was abandoned, some believe, as a trade off for caps on damage awards. Currently, while the statute appears to mandate the request for mediation before proceeding with the circuit court action, practically speaking this is often waived by agreement of the parties, recognizing that attempting resolution of the case before discovery and without opinions is premature and ineffective. Completion of the mediation within the time specified in the statute will not be a jurisdictional bar to the action in trial court. -1

As of July 1, 1994, Circuit Court Judges were empowered with the authority to order alternative dispute resolution civil cases under § 802.12, which provides that any one of these ten methods of ADR can be considered: binding arbitration, direct negotiation, early neutral evaluation, focus group, mediation, mini-trial, moderated settlement conference, nonbinding arbitration, settlement alternative or summary jury trial. The parties are encouraged to select a method of ADR but if they cannot reach agreement, the judge can specify “the least costly settlement alternative” that the judge believes is likely to bring the parties together in settlement. However, without the parties’ consent the judge cannot order binding arbitration, nonbinding arbitration or summary jury trial or more than one of the following: binding arbitration, early neutral evaluation, focus group, mediation, mini-trial, moderated settlement conference, nonbinding arbitration or summary jury trial.

If the parties cannot agree on a person to provide the service, the judge can also appoint someone who has the necessary skills to bring the parties together in settlement.

By incorporation, at least to some extent, these statutes also apply to Actions Affecting the Family under § 802.12 (3). Whatever occurs during the course of the ADR (except for binding arbitration) is confidential and is treated as compromise negotiation for purposes of §§ 904.08 and 904.085, Wis. Stats.

Development of the Mediation Process
Between 1992 and 1994, Model Standards of Conduct for Mediators was developed by a joint committee composed of delegates from the American Arbitration Association, the American Bar Association and the Society of Professionals in Dispute Resolution. The Model Standard has been approved by all three groups. This was developed as a general framework for the practice of mediation for lawyers and other professionals. The Model is intended to be a tool to assist mediators in their practice by serving as a guide for conduct, informing the mediating parties of the process and promoting public confidence in the mediation process as a means of resolving disputes. The Model consists of nine standards with which mediators should comply.

Standard I. Self determination: A mediator shall recognize that mediation is based on the principle of self-determination by the parties. The fundamental basis of mediation is that the parties are in the position of determining their own outcome. This is a voluntary process involving uncoerced agreement. The mediator’s job is to share information about the process, raise issues, and help the parties explore options toward voluntary resolution. The parties can explore proposed options and ultimately determine if they can come to terms of agreement. The parties may also withdraw from the process at any time.

Standard II. Impartiality. A mediator shall conduct the mediation in an impartial manner. The core of the mediation process mandates that the mediator remain impartial to the parties involved and the outcome. If during the process the mediator is unable to conduct the mediation impartially, withdrawal is mandatory. The mediator should avoid even the appearance of partiality to one of the parties if the public is to have continued confidence in the mediation process as a means of dispute resolution. For example, if during the course of a mediation of a bodily injury case the mediator realizes that the plaintiff attorney’s representation of the client is inadequate, the mediator cannot become an advocate for the plaintiff and the mediator should withdraw.

Standard III. Conflicts of Interest. A mediator shall disclose all actual and potential conflicts of interest reasonably known to the mediator. Once the disclosure is made the parties can opt to continue unless the conflict would cast serious doubt on the integrity of the process. A mediator should not enter into a professional relationship with either party in a related or unrelated matter since this would raise questions about the integrity of the entire mediation process. In the example in the preceding standard, the mediator should not accept the party as a client after withdrawing from the mediation. Additionally, in referring or recommending other professional services, care should be taken to avoid the appearance of conflict.

Standard IV. Competence. A mediator shall mediate only when the mediator has the necessary qualifications to satisfy the reasonable expectations of the parties. While anyone may be selected as a mediator provided the parties agree, often training and experience in a certain area or field enhances the mediation process and makes the

process more effective in reaching resolution. In court ordered mediation in the Family Court setting, certification is required under § 767.11(4) Wis. Stats. It should be noted that there is some discussion in professional mediation organizations toward certification of mediators in all settings. This will be discussed in greater detail later in this paper.

Standard V. Confidentiality. A mediator shall maintain the reasonable expectations of the parties with regard to confidentiality. Under §§ 907.08 and 907.085, Wis. Stats., discussions during the mediation process are confidential. This is to encourage candor during the process and encourages negotiations leading to resolution of the issues. The parties may make their own rules about confidentiality, but if this is done, it must be discussed in detail with all parties and reduced to writing and signed by the parties before proceeding with the mediation. If during the course of the mediation it becomes apparent that a party is engaged in illegal activity or is a danger to him/herself or others, this must be reported appropriately. For example, this could arise during a family mediation session where physical abuse is threatened.

Standard VI . Quality of the Process. A mediator shall conduct the mediation fairly, diligently and in a manner consistent with the principle of self-determination by the parties. The mediator should encourage participation by all parties and continue to work toward resolution without delay. A mediator’s full attention should be on the mediation process, encouraging mutual respect among the parties. The mediator is there to facilitate a voluntary agreement between the parties. The mediator is not there to give professional advice and should refrain from doing so. If it is apparent that other professional advice is needed to complete the process, the mediator should recommend that the parties seek outside professional advice or consider another form of ADR or trial. If the mediator steps into a role other than impartial facilitator, the integrity of the entire process has been compromised. Also, if a party’s participation is compromised by drugs, alcohol or other physical or mental incapacity, the mediation should be stopped or postponed.

Standard VII. Advertising and Solicitation. A mediator shall be truthful in advertising and solicitation for mediation. The mediator should not promise or guarantee results and should not misstate education, training or experience. The goal is to instill trust and confidence in the process with the public consumers of the services. For attorney mediators care must also be taken to comply with SCR 20:7.2.

Standard VIII. Fees. A mediator shall fully disclose and explain the basis of compensation, fees and charges to the parties. This discussion should be done before the parties decide to retain the mediator’s services. The fees should be reasonable considering the expertise and education of the mediator, the complexity of the case and the prevailing customary rates in the community. Any unearned funds must be returned to the parties. There can be no contingent fee agreements or referral fees. Again, for attorneys, consider the requirements of SCR 20:1.5.

Standard IX. Obligations to the mediation process. Mediators have a duty to improve the practice of mediation. This standard includes education of the public about the process and availability of mediation as an option for dispute resolution, correcting abuses and improving their professional skills.

Ethical Guidelines
The Wisconsin Association of Mediators has developed ethical guidelines which mirror and incorporate the Standards discussed above. These guidelines were adopted by its Board of Directors on April 4, 1997. Wisconsin Supreme Court Rules, Chapter 20 contains the Rules of Professional Conduct for Attorneys. When an attorney is acting as a mediator, these rules continue to apply to the attorney’s conduct. The Preamble to Chapter 20 states: “In all professional functions a lawyer should be competent, prompt and diligent.” Additionally, “a lawyer’s conduct should conform to the requirements of the law…in the lawyer’s business and personal affairs.” While a lawyer may not be dispensing legal advice as a mediator, the rules still apply. Attorney/mediators should also keep in mind Rules 20:1.6, regarding confidentiality; 20:1.7, 1.8, and 1.9, dealing with conflicts of interest; 20:2.2, acting as intermediary (even though there is no actual representation of either party) and 20:8.3, reporting professional misconduct.

Practical Considerations in the Mediation of Tort Cases
When selecting a mediator, consider who your client is and what kind of mediator will make him or her most comfortable with the process. The background and expertise of the mediator is important. Mediating a medical malpractice case requires a much different set of qualifications than mediating an auto accident case. Chose someone who can remain impartial and neutral during the process to preserve the integrity of the mediation session and be sure the mediator you choose will take the time to be prepared to enter the mediation with knowledge of the pertinent information. This will allow the mediation to move along smoothly. Explain the mediation process and the roles of the participants to your client beforehand. The information you give to the mediator prior to the mediation should include some personal information about the plaintiff (a deposition if it has been taken). This allows the mediator to develop rapport with your client and will make the client more comfortable. Also supply the accident report, if it is an auto accident case, a permanency or medical report, an independent medical examination report, a summary of the special damages and a position statement. Most mediators will also want to know the status of the negotiations prior to the mediation.

It should be mandatory to have all of the parties and the attorneys present at the mediation. Many insurance companies, especially subrogated carriers, appear by telephone or not at all. The decision makers must be present if the goal is to settle the case. If a structured settlement is an option that may be considered, it is helpful to have a representative from an annuity company present and prepared to calculate different options. Be sure to know the amount of available funds for payment (i.e. policy limit).

Put the final agreement in writing and have all parties and attorneys sign it. This enhances enforceability in the event a party later has a change of heart. -2

Enter into the mediation process with a good faith attitude to settle the matter. This does not mean you have to give up all of your defenses. If you honestly believe that, from a defense standpoint, there is no liability, and no settlement offer will be made, inform the Court of this and ask to be relieved of the obligation to mediate. You could be risking sanctions if this is not done. -3

When to use mediation
Mediation is most successful when there is disagreement as to the value of a case but liability is relatively clear or can be negotiated. The breakdown in negotiations may have occurred due to personalities involved or due to client control problems. Sometimes a client needs to tell their story and telling it to the mediator is sufficient to satisfy this need. Mediation is often successful when there are multiple defendants and they cannot reach agreement between themselves. In this case a total sum due the plaintiff may have been reached and only the defendants mediate the split of liability. Be ready to be creative in the discussion. You may get concessions from lien holders or subrogated parties if they think they will get nothing at trial or if they wish to avoid trial attendance or take the lead in presenting their case if the plaintiff settles without them.

Some advocate that an appropriate use of mediation is to assist a party in evaluating the case. This puts the mediator in the position of advocating for one party or the other and compromises the neutrality of the mediator and the mediation process. If asked, the mediator can give an opinion as to value, but this should not be the primary function of the mediator or the mediation session. If an attorney does not have the confidence to evaluate the case, s/he should consider referring it to someone with more experience.

Mediation is a process that is becoming more prevalent in resolving many kinds of disputes. It promotes resolution of conflicts without clogging up the court system. It allows parties to determine the outcomes to their conflicts without requiring a “winner” and a “loser”. In order to preserve the professionalism of the process, there is movement underway to require the certification of mediators. One model that has been prepared for basic mediation training comes from Wisconsin Association of Mediators and includes training in ten components over a period of forty hours with an additional fifteen hours of practicum with supervision. Questions arise as to who will control and monitor the certification process and the mediators once they have been certified. Many mediators are not attorneys and are not subject to the Supreme Court’s oversight. These issues are left unresolved at this time.

Mediation is a process that successfully allows parties to resolve their own disputes with the assistance of neutral facilitators. It is most successful when the experience and expertise of the mediator are consistent with the nature of the issues to be resolved. It is a system that is growing and evolving and will most likely have some certification in place at some point in the future.

1. Schulz v. Nienhuis, 152 Wis. 2d 434, 448 N.W.2d 655 (1989), Seaquist v. Physicians Ins. Co, 192 Wis. 2d 530, 531 N.W. 2d 437 (Ct. App. 1995), Bertorello v. St. Joseph’s Hospotal of Marshfield, 685 F. Supp. 193 (W.D. Wis. 1988).
2. Laska v. Laska, 2002 WI App 132
3. Gray v. Eggert, 2001 WI App 246

Ann Lampiris has a mediation/arbitration practice concentrating on bodily injury, family and divorce mediation and conflict in the workplace. She is a member of Wisconsin Association of Mediators, the Association for Conflict Resolution and the ADR section of the Wisconsin State Bar Association.