You’ve undoubtedly been in a mediation where the lawyer on the other side has asked for a break so she can call her client’s insurance carrier in order to get a response to your latest settlement offer. You wait — reliant on her summary of your devastating statement in the mediation about how the carrier will have to pay out to the policy limits after the verdict — but your demand is rejected.
If only that insurance representative had been there to hear you, rather than getting a watered down version of your position. Can you get a Court to order that an insurance representative attend the mediation in person? What do the mediation rules say about a physical attendance at mediation?
Well, they are pretty clear. Rule 4 of North Carolina’s Revised Rules Implementing Statewide Mediated Settlement Conferences designates an "insurance company representative" as a person who "shall attend a mediated settlement conference." It also specifies that:
Each such carrier shall be represented at the conference by an officer, employee or agent, other than the carrier’s outside counsel, who has the authority to make a decision on behalf of such carrier or who has been authorized to negotiate on behalf of the carrier and can promptly communicate during the conference with persons who have such decision-making authority.
But the Rules don’t specifically give a Court the power to order attendance by an insurer representative. Judge McGuire nevertheless ruled in an unpublished Order last month in Elliott v. KB Home North Carolina, Inc. that the Business Court "has the requisite authority to issue an Order to compel [an insurance carrier to mediation]." Order ¶9.
He found that power in NC appellate decisions "which have recognized the discretion of the trial court to issue sanctions against parties and those obligated to appear in mediation under the Mediation Rules, but who failed to appear without good cause." Order ¶9. Judge McGuire said that "[i]t follows from these cases that the Court has the authority to issue an order to compel attendance at a mediated settlement conference." Id. Decisions from Courts in California and West Virginia bolstered his conclusion. Order ¶10.
If you have that Order in your pocket, how easy is it to get the Business Court to order the representative of an insurance carrier to attend a mediation? It’s most likely tough. The circumstances of the Elliott case were pretty unique. The parties had met for mediation four times. Three insurance carriers had potential liability for Plaintiffs’ claims. A fifth mediation was on the horizon at which the parties said a "global resolution" could not be reached without all carriers being in the room. One carrier had said that its representative would appear. That carrier had attended all four of the previous sessions. Another carrier, whose representative had appeared at two of the previous mediations, opposed the requirement that it attend again. The third carrier said that its representative would be on vacation during the scheduled fifth mediation, but that he could be available by telephone.
Judge McGuire recognized the costs that the carriers would incur by attending and that they had all attended at least some of the previous mediations, but said that:
the spirit of the Mediation Rules requires that the necessary parties continue to participate in the mediation process until either a resolution has been reached or the mediator has determined that an insurmountable impasse has occurred.
Judge McGuire’s Order required the attorneys for all three carriers to attend what will hopefully be the final mediation session. and for representatives of two of the carriers to appear in person. The representative who had an already planned vacation? He doesn’t have to appear in person, but was ordered to be available by telephone "from the starting time of the mediated settlement conference until such time as the mediator declares the mediation closed." Order ¶14. That requirement could still ruin a vacation.