A look at the process of mediating rather than litigating products-liability and other mass-tort claims
“Mass-tort litigation emerges when an event or series of related events allegedly injure a large number of people or damage their property, giving rise to a large number of cases.” (Report on Mass Tort Litigation, 187 F.R.D. 293, 300 (1999).)
The Report on Mass Tort Litigation points out that such litigation is not a temporary phenomenon. The 1999 report noted that, “the opportunities for mass injuries caused by a common course of conduct have substantially expanded with advances in modern technology, manufacturing, distribution, and marketing” and “is probably here to stay.” Mass-tort claims have become even more prevalent in the past few years, and not surprisingly, parties have become aware that resolution of such claims, through mediation, is far preferable to resolution in the courts.
A few years ago, I was retained to mediate a products-liability mass-tort case involving 68 plaintiffs who had filed suit in federal court against a product manufacturer, alleging personal injury resulting from the use of a hair product. The claims, each of which was required to be separately negotiated, were settled in less than four days of mediation. Resolution through litigation would have consumed considerably more time, at much greater expense for all parties.
Aside from the usual considerations present in choosing mediation over litigation in products liability or other personal-injury matters involving few plaintiffs, there are at least two overriding factors mandating mediation in the mass-tort context: It is virtually impossible to fulfill the interests of either party through litigation, and the practicality of trying a case with hundreds of plaintiffs is not only expensive, but virtually requires a dedicated courtroom. The interests of plaintiffs are not served by the delay in resolution, the uncertainty of outcome, and the expert and other expenses associated with proving the claim in trial. The interests of defendants are not served for the same reasons, with additional considerations, including adverse publicity and damage to reputation of the company and its products.
A distinction should be made between what the Report on Mass Tort Litigation refers to as “single event” and “disbursed” mass torts. The former results from a single catastrophic event such as an airplane crash, while the latter may involve exposure to a product or substance that could cause injury years after exposure such as asbestos, toxic waste or a drug, or, as the report notes, it could combine characteristics of both types of cases.
The Report notes that disbursed mass torts:
…pose problems never anticipated by the present mechanisms for resolving torts. Consequently, dispersed mass torts strain existing procedural mechanisms and judicial capabilities. Because exposure may occur over many years, with injury often appearing years after exposure, and because causation may be uncertain, the number of persons who have been injured or who could claim injury is unknown and their identification is difficult. Ambiguities of causation and identification occur not only when conduct is repeated over time or a product is used by many consumers, but also when a single-event tort affects an uncertain number of victims — for example, when a nuclear power plant accident releases a harmful agent whose precise effects are difficult to detect over long periods of time and uncertain distances.
While possessing some attributes of class-action mediation, the mediation of mass-tort claims requires consideration of a number of factors not necessarily present in class-action mediation. This article will focus on the preparation needed for the mediation of mass-tort claims.
Choice of mediator: factors to consider
By far, the most important factor to consider is the mediator’s understanding of mediation process. Subject-matter expertise might be important in some specific areas (e.g., construction), but for the most part, the parties can educate the mediator in the law in any particular area in which it might be required (e.g., regulations relating to the storage of natural gas). But resolution of the mass-tort case depends, for the most part, on the extent to which the parties are motivated to reach agreement, the ability of the mediator to organize the mediation in a way that makes the best use of the time allotted for the mediation, and the mediator’s knowledge of negotiation tactics and ability to guide the parties in the process.
It is important to exercise due diligence by seeking out those of your colleagues who have engaged in mass-tort mediation to ascertain their experiences with mediators. Conduct interviews of the prospective mediator. What is his/her approach to mass-tort cases? How does the mediator intend to deal with your clients’ concerns, as well as the concerns of the other party? Give the prospective mediator an idea of issues that might be involved to ascertain familiarity with those issues, and experience in dealing with them. How does the mediator deal with the issues of settlement authority, and the need for persons with authority to be present? What experience and success has the mediator had in dealing with mass-tort cases?
Seek out references the mediator might be able to give you, both from the plaintiff’s and defense side. Also, if there were insurance carriers involved in prior mass-tort cases conducted by the mediator, find out who represented the carrier. Interview everyone those inquiries reveal. Remember, mass-tort cases are generally not completed in a few days. Everyone involved will be investing a great deal of time and money into achieving a resolution. The opinions of those who have utilized the mediator’s services become even more important in the mass-tort context.
You might also seek the recommendations of a service provider you have worked with before, or who has a good reputation with respect to its panel make up. Obtaining the names of prospective mediators in this way will make your selection process easier.
Protocol for mediation
It is essential that the parties agree in writing on a protocol for mediation, which should include provisions for the exchange of information, and a general statement of the factors to be considered in selecting the order in which the cases will be mediated. Storage and exchange of documentation, and the extent to which authority is to be given to obtain medical records must be addressed. The parties may also desire a tolling agreement and/or a stay of any litigation, as well as an agreement to refrain from making extrajudicial statements.
Many mediators may eschew the use of Mediation Confidentiality Agreements, in part because the jurisdiction in which the mediation takes place might have statutory protections of confidentiality, such as those in California under Evidence Code section 1119, which the parties consider adequate. It is suggested that in the mass-tort context, you do not simply rely on the statutory protections, but rather, enter into an Agreement to Mediate/Confidentiality Agreement. If the mediator has a form of agreement, you might use that as a template, but make certain that you pay attention to some key terms.
Because a mass-tort mediation may involve parties who are not based in California (or any single state for that matter), reach a pre-mediation agreement on what law you want governing the proceedings with respect to the issues contained in California Evidence Code sections 1115 through 1128. Issues such as mediation confidentiality (§ 1119), types of evidence not covered by the confidentiality (§ 1120), mediator reports and communications (§ 1121), and the issue of compelling the mediator to testify (§ 1127). If there is more than one jurisdiction involved, consider applying the confidentiality rules of multiple jurisdictions, specifying which law will apply in the event of a conflict. This can be done through the mechanism of having the jurisdiction with the greatest degree of confidentiality protection applicable to the mediation proceedings.
You might also include a provision:
The decision of any party or their counsel to produce documents or other evidence at the mediation is solely the decision of the party and/or their attorney. The parties and their counsel further acknowledge that the production of such evidence in the context of mediation may not confer upon it the same protections afforded to mediation communications under California law.
Reach an agreement on who will be responsible for the mediation costs and fees. Understand that these costs and fees may not simply be those charged by the mediator during a mediation session. If the mediator needs to review extensive documentation, videos, photographs, reports, as in most mass-tort mediations, and/or has to incur travel expenses, set out the responsibilities of each party for those expenses.
If the mediator is to be required to make a report to a court as to outcome, include the extent of his/her authority to do so.
Because many mass-tort mediations take place over a period of months, there may be time gaps between sessions. Consider a waiver or extension (permitted by statute) of California Evidence Code section 1125(5) which provides that the mediation ends if there is no communication between the mediator and any of the parties for 10 calendar days.
Although it need not be contained in the Agreement to Mediate, agree in advance on the documents to be exchanged following the resolution of each claim, and the mode of execution of those documents. Consider how documents will be transmitted to the individual claimants following resolution of that person’s claim, the mode of executing those documents and the means of transmittal of those to the defendants’ counsel. Agree on the time frame for the issuance of payment, to whom payment is to be transmitted, and to whom the checks/drafts are to be paid.
Pre-mediation conferences with mediator
Pre-mediation conferences between the mediator and each party’s representative are useful in most mediations, but are essential in mass-tort mediation. The mediator will need to meet (in person or by telephone) with not only each party’s representative, but also the representatives of each insurance carrier who will be participating in the mediation. There are a number of reasons for this.
It is essential that the mediator understand the interests and goals of each participant in the mediation. Otherwise, it will be difficult to achieve a resolution that comes close to achieving those goals. It is also important because it is not always clear that the goals of the carriers and the goals of the insured coincide. For example, if the carrier has not taken a position on coverage under the applicable policy, there may be an issue of whether the initial funding of the settlements might be from the insured (which might be the case in any event if there is a large deductible or self-insured retention). The carrier’s goal may be simply to pay as little as possible to resolve claims, while the insured’s goal is likely to include protecting the brand name.
Meeting with each insurer’s representative is helpful to the mediation process as well. To be effective, the mediator needs to have a handle on the concerns and settlement approach each carrier has. Meeting with each carrier will also help the mediator establish key understandings with regard to the conduct of the mediation. For example, many carriers become very defensive when you tell them you need to talk with their insured – alone. Mediators can diffuse uncomfortable moments, even in the face of a carrier asserting a “right” to be in the room during discussions between the mediator and insured. The fact is that mediators need to have the flexibility to speak with any party or combination of parties separately from others, when the mediator believes the settlement process is enhanced by such separate meetings. If the mediator has laid the groundwork for such separate discussions by telling the carriers’ representatives in advance that such discussions may take place, the awkward moment, disrupting the flow of the mediation may be avoided.
During the separate pre-mediation discussions, the mediator will gather information useful in minimizing the potential impact of coverage issues (whether or not those issues are to be resolved in that mediation). For example, disputes over when the triggering event occurred may impact which carrier or sets of carriers need to be involved in the decision on the amount of offers or demands.
These discussions might also impact on the organization of claims to be addressed at any particular mediation session. For example, if there are multiple carriers, and the parties have agreed that there is a subset of claims which involve only one or two of those carriers, the sessions might be organized so that unnecessary parties do not have to attend.
The pre-mediation conferences are essential to enable the mediator to organize the mediation in a way that makes the best use of the parties’ time, and enhances the likelihood of resolution.
Document exchanges – submissions to the mediator
Mass-tort matters generally result in a tremendous amount of documentation. It is essential that the parties, well prior to the mediation, exchange all documents each side will need to make an informed assessment of the risk of not reaching an agreement, the value of the claims, and the amounts to be offered in resolution. The use of a central repository of documents should be considered. The goal is to avoid surprises at the mediation, so that the decision makers have the opportunity to consider evidence supporting the other side’s positions. The parties should be as open as possible with respect to documentation.
Make certain to give the mediator sufficient time to review the documentation. It will be very difficult for the mediator to most effectively advocate your position to the other side if you do not provide him/her with sufficient information upon which such advocacy can be credibly accomplished. Everything that is provided to the other side should also be provided to the mediator. Effective presentations may include before and after pictures and videos, documentation of expenses, statements of witnesses, and videos of the claimant explaining his/her use of the product, and damages, including the impact of the injury on the claimant’s life. This gives both the defendants and the mediator a feel for the party’s presentation as a witness in his/her own behalf.
Pre-mediation exchanges of demands’ offers
Consider exchanging pre-mediation demands and offers. This gives each side an idea of which claimants are viewed by the other as having similar injuries, and allows the mediator to suggest (if the parties have not already agreed) the order in which claims should be mediated. For example, if there are 100 plaintiffs, and the demand is $50,000 each for 20 of them, the defense will likely conclude that the plaintiffs’ counsel views those 20 as having similar injuries and/or damages. The defense counter offer to 15 of the 20 might be $10,000. A different amount or amounts might be offered to the remaining five.
This will allow the mediator to suggest that the 15 with the $50,000 demands and $10,000 offers be mediated together. The mediator will be able to explore whether the parties do, indeed, view the 15 as having similar injuries. Resolution of those 15 (or a high percentage of them), may facilitate the mediation of other plaintiffs’ claims later in the mediation, if the parties agree the injuries to other plaintiffs are similar to the resolved claims. Of course there are a variety of factors, other than simply the nature of the injury, impacting on the amount of demands/offers. However, if the evaluation of damages leads each to the conclusion that a number of parties’ damages might be the same as others, that may provide a starting point for negotiating the resolution of multiple plaintiffs’ claims at the same time.
Whatever the nature of the injury, a point system to evaluate your clients relative to each other may be useful. Depending on how you view their priority, consider factors such as nature and extent of injury, impact on employment/ profession, geographical location, and anything else you might feel relevant in assessing damages. Look at jury verdicts for similar injuries (if any), and discuss probable and possible recoveries with trusted colleagues. The development of the point system will enable you to assess the probable initial offer.
Mass-tort mediations require a great deal of thought and planning with respect to scheduling. Flexibility is necessary, even when mediation sessions are planned months in advance. Consider the number of claims to be addressed during any given session, session length, and the number of sessions needed.
Also, if there are attorneys, parties and company representatives who are not local, give thought to the logistics of beginning of week and end of week sessions. How long will all parties needed to resolve the matter be available? Make your plans realistic when it comes to the length of sessions. While 10-hour sessions are common, by the end of a week of 10-hour sessions, productivity can diminish. Good mediators follow up sessions with communications to the parties. Given that fact, it is often counterproductive to extend a mediation session to the point where it impacts on the ability of the parties to function in the following day’s session, or results in parties hardening their positions.
Preparation of a negotiation plan
Thought has to go into your approach to the negotiation of mass-tort claims to an even greater degree than if you are representing one or two plaintiffs. In part, this is because offers and demands made in the mass-tort context impact not only the party whose claim is being mediated at any given point in time, but also the other parties you are representing.
Even before the preparation of a negotiation plan, it is essential that you speak with your clients about your evaluation of their case, possible recovery, risk, cost, limited waiver of conflict, and their expectations. Make certain you have authority to demand a particular number as well as a reservation point (“bottom line”) number. Assure the client that you will be keeping them apprised of offers and demands throughout the mediation. Also consult with them on whether they are to be present during the mediation. In that regard, most times those plaintiffs who appear at the mediation rarely help their case by appearing. The risk is a defense reaction of, “she doesn’t look as bad as she did in the submitted materials.” The appearance of a claimant can also slow down the process, as the mediator spends time talking with the party about various matters. A better alternative, except in the minority of cases, is to have the party available by telephone to keep him/her apprised during the negotiation of offers and demands.
Your negotiation plan should:
- Assess the interests each side wants to fulfill on each of the issues, to assist you in determining what positions will be taken by the other side, and what positions you should be taking.
- Assess the information you need from the other side, and the information they need.
- Analyze the relative power of the parties. Who has the better alternatives if the matter does not settle?
- Consider how competitive you want to be with your opening demand and with subsequent demands.
- Plan a preliminary agenda for the mediation. This involves an analysis of the similarity of opening offers and demands, as discussed above, but also involves a determination of those claims whose resolution will have the greatest impact on the mediation of other claims. Prior to the mediation session, discuss this with the other side, or have the mediator do so.
Conduct of the mediation
Mass-tort mediation is generally conducted in the same manner as other mediations. A separate caucus allows the mediator to discuss the reasons for the analysis of claims with each side, and gain an appreciation of where the parties’ differences in assessment might be, whether by way of value or similarity/lack of similarity of injury/damage assessment. The separate caucus also allows for a discussion of counters to offers and demands, and other negotiating issues generally present in mediation of smaller numbers of claimants. An effective negotiating tool for mass-tort mediation is the use of bracketing after the initial offers and demands have been exchanged. Bracketing allows the parties to adjust the bargaining range by presenting conditional offers or demands.
Setting the agenda for the mediation is very important. During the separate caucuses, the mediator will have the opportunity to obtain the parties’ thoughts on the order in which the claims will be mediated. It is up to the mediator to make suggestions on the agenda based on the expressed desires of the parties. This will require the mediator to analyze the reasons for proceeding in one particular direction or another direction, and essentially to mediate the agenda. This is an important step in the process.
Generally, parties want the larger claims to be mediated first, but this is not always the case. The separate caucuses allow the mediator to see how the parties prioritize. Do they want the larger claims resolved to possibly create a “ceiling” on claims, or do they wish to resolve the largest number of claims?
When an apparent impasse is reached with respect to any particular claim, overcoming that impasse might involve tabling further negotiations with respect to one particular party until other parties’ claims have been resolved. Typically, the defense has a particular settlement budget in mind, and the resolution of one claim for less than the amount anticipated will have an impact on the funds available for another. Conversely, resolution of claims overall for amounts exceeding anticipated levels may result in a reassessment of the amounts it will take to resolve all the claims. Often, holding off further negotiation of a particular claim until a later time is the prudent path to take.
Decision makers should be present
In planning a mass-tort mediation, it is essential to determine who should attend in person. Having the decision makers present with the highest possible authority on the defense side is essential. Lack of planning in this regard can lead to unnecessary delay while those present attempt to communicate with the “real” decision makers. This is inconvenient in cases involving two or three parties. It is a real impediment to the process in mass-tort cases. The element of time is important in mass-tort cases for a number of reasons. The parties will typically have an initial goal as to the number of claims to be mediated at any given session and the fewer claims resolved at any given session means that there will be more to resolve later, lengthening the mediation.
With respect to claimants, as mentioned above, be very selective on who appears. While claimants rarely increase the settlement value of the case by making an appearance, there are times when you may have little choice. If the claimant has not been examined by the defense in an Independent Medical Examination setting, the defense may insist on seeing the plaintiff in person before offering money, or increasing an offer past a particular point. For the plaintiff’s counsel, this creates a real dilemma. It is difficult to determine just what effect any particular plaintiff will have on the decision makers if he/she appears. Further, this requires agreement to a set of ground rules for the appearance before the defense side. Will he/she be allowed to speak at all? Will questions be allowed? If so, who will answer those questions? Further, it is important that plaintiff’s’ counsel actually meet his/her client before such a session is agreed to. This may create logistical and expense problems for the plaintiffs’ side, just as such problems may exist by reason of the appearance at mediation at all.
Mediation of mass-tort cases requires extensive preparation on the part of the parties and mediator. It also requires a degree of cooperation among the parties on issues such as scheduling, agenda, documentation needed, protocol and agenda during the mediation, and required settlement documents. Flexibility and planning are essential in mediating mass-tort cases.
Leonard S. Levy, a full-time mediator and arbitrator at ADR Services, Inc., has been a neutral since 1998, after a 30-year career as a trial attorney commencing in 1973, primarily handling complex insurance, surety and commercial matters. He attended UCLA and Loyola Law School, where he is also an Adjunct Professor teaching negotiation. In his practice as a neutral, he specializes in mass-tort, personal injury, medical malpractice, insurance, real estate, commercial contract, general business, surety and construction matters. He has been named as a Super Lawyer in Alternative Dispute Resolution each year since 2014. He can be reached at firstname.lastname@example.org.
by the author.
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