Mediation (a form of settlment conference) is now used in nearly every long term disability insurance case I handle.  Mediation is most similar to a settlement conference in that it is confidential, not subject to the rules of evidence, or rules of court, not recorded or transcribed and requires voluntary cooperation by the parties to reach a resolution.  Voluntary is not quite as voluntary as it used to be, since an increasing number courts are ordering cases to mediation prior to reaching a trial or final hearing, but settling the claim is entirely up to the parties.  If the claim does not settle, it goes back to the judge for a decision. 

Most typically mediation takes place anywhere from three to six months after a federal long term disability lawsuit is filed.  For unknown reasons, in my experience mediation is rarely used until a lawsuit is filed.  Maybe it should be.

At the mediation a mediator (usually an experienced attorney with knowledge of long term disability cases and ERISA) acts as a neutral to work with the parties to try to reach an acceptable buyout (lumpsum payment) of the long term disability insurance policy.  There is no formula for how this number is reached, but involves lengthy discussions of the strengths and weaknesses of each side, the risks of winning or losing at trial and the value of finality to the claim.  For the more optimistic a final settlement is seen as a win/win resolution to a lawsuit, while those tilting towards the pessimistic may view the result as lose/lose.  Thus, a compromise.

Given that approximately 95% of all cases, including long term disability insurance cases, either ERISA caes or private individual cases, are going to reach a settlement prior to trial, working with an experienced mediator can be a highly effective and efficient to reach a resolution of a case.  Likewise, it is important to have an attorney representing you who has a great deal of experience with mediations.  Having practiced law (all litigation) for 25 years, I have represented clients in hundreds of mediations and settlement conferences, and recently trained for the role of mediator.  I believe clients are best served by an attorney who thoroughly understands the mediation process and mediation negotiations, given nearly all court cases are going to resolve through this process.

The topic of mediations is worthy of much more discussion, in particular a primer on the mechanics of a mediation, and why mediation produces results.  More on upcoming posts.  Please feel free to ask any questions you may have about the role of mediation in your long term disability insurance claims.  Randy Noah