Proper Preparation for Labor Law Mediations

I consider myself fortunate to have settled a majority of construction accident mediations in which I have participated. When I think about the cases that did not settle, my takeaway was that a lack of preparation was almost always a substantial factor in bringing about that suboptimal result.  So, in this article, we will explore what steps can be taken, by the lawyers, their clients and by the insurance carriers, to properly prepare for a Labor Law mediation.

Labor Law Cases Are Different

Anyone who has handled a Labor Law case knows that they are extraordinarily different than your garden variety negligence claims.  The following are at least three reasons for these differences.

1. There is an exceptionally wide array of mechanisms for potential injury at construction sites.  When we look at the nature of construction work, we see hazards of all kinds- falling objects, unguarded openings, faulty equipment, hazardous chemicals, unstable structures and so on.  The list is practically endless and, as we have seen from appellate decisions on Labor Law Section 241-6 claims, not even the New York State Industrial Code covers every hazard.  Moreover, because of the weight, force and height involved in these construction site dangers, the resulting injuries are often significant.
2. At the risk of stating the obvious, people who get hurt at construction sites are working people.  So, there is generally much more at stake, as their cases will almost always involve substantial economic claims for lost earnings and lost benefits, both past and future.
3. Recognizing the inherently dangerous nature of construction work, the legislature in the State of New York has created relatively easy paths of recovery for injured workers.  Labor Law Sections 240 and 241-6 not only allow injured workers to recover damages without having to prove negligence on the part of the defendants, but these statutes also place the financial responsibility for these claims on the upper tiers of the construction hierarchy- the property owners and the general contractors in charge of the overall project.

The unique nature of construction accident cases makes proper preparation crucial if a mediation is to be successful.

Deciding to Mediate a Labor Law Case

We all know that the overwhelming majority of civil cases in New York State are settled before a final verdict is announced.  Even cases that go to verdict on liability and damages will often get settled at some juncture in the appellate process.  So virtually every Labor Law construction accident case is a good candidate for mediation and settlement.  The question is, at what point in the litigation do we see the “sweet spot” for successful mediations in these cases? 

Since Labor Law cases tend to be more involved (more parties, more significant damages, more indemnity, and insurance issues), it is often necessary to allow the discovery process to play out before the attorneys, clients and carriers are in the right position to fully assess their potential risks and rewards.  And that's okay!  The parties really need to know where they stand on all liability and damages issues before they can get a grasp on where they want to end up on a settlement.  So, all important expert exchanges, doctors, economists, vocational rehabilitation counsellors, life care planners and so on, must be made well in advance of the mediation.  This gives all sides the opportunity to know precisely what is at stake and how their clients and carriers might be impacted if the case cannot be resolved at a mediation.

The nearly ubiquitous summary judgment motions that we see in these matters can play an important role in getting a case mediated successfully.  Summary judgment motions, of course, are generally made after the completion of all discovery, and they are decided neither quickly nor easily.  Arguably, this is the best window of opportunity for successful mediation.  The uncertainty regarding the court's looming decisions on the motions can be leveraged to get the parties to be more flexible in their settlement positions.  That leverage is minimized, and perhaps lost completely, if summary judgment is granted to one or more parties.

Evaluating Positions and Managing Expectations

Perhaps the most important, and also the most difficult part of preparing for a Labor Law mediation is getting your clients and carriers to fully appreciate the risks involved in not settling their case.  Leaving this crucial task until the day before the mediation is usually a recipe for an unsuccessful session.

Let's look at the plaintiff's side, first.  The attorney or attorneys handling the mediation must establish a rapport with the clients in advance of the mediation session.  This requires time, patience, and solid communication skills.  The attorney having this crucial conversation must, first and foremost, have a complete understanding of the underlying facts of the case, as well as the applicable law.  But the more challenging aspect here is being able to explain the importance of the facts and the law to a lay person…and not just any lay person, but the one who may have been seriously and permanently injured.  The emotional aspect of the case cannot be overlooked.  The conversations will not be easy, especially in cases involving significant injuries and economic loss.  The attorney must be able to empathize with their client, without losing sight of the objective realities of the case.

The defendants' side is very different, but still quite challenging.  While some construction companies have significant input into settlement decisions, most of the crucial preparatory conversations that a defense lawyer will have before a mediation will be with claims professionals from various insurance companies.  Carriers are, by nature, cautious and conservative entities.  They require documentation concerning the risks involved in any given case. The establishment of potential exposure will most likely be an important factor in the parameters for settlement decisions.

Presumably, the defense firm has been diligently reporting all significant developments and has also been explaining the impact of those developments on the insured's position in the case.  Nevertheless, a comprehensive review is often required in advance of the mediation, so that the claims professional can make decisions (usually in conjunction with their supervisors) about what they might be willing to offer.  One of the first things that a defense lawyer must do in order to properly prepare for a mediation is find out what the carrier needs in order to make these important decisions.  Whether it's a comprehensive narrative report, a specific pre-mediation form, copies of all medical records or all of the above, the carrier must be given all of the necessary information and documentation well in advance of the mediation.  

Then, the defendant's attorney must have the same sort of meeting with the carrier's representatives that the plaintiff's attorney has with their client.  Obviously, the dynamics of that meeting will be quite different for the defense lawyer as opposed to plaintiff's counsel, but the goal of the meeting is basically the same – identify all of the potential risks and rewards involved in going to trial, and then determine how much money can be offered at the mediation.

Here are some additional questions that should be addressed by attorneys in a Labor Law case, in order to assist their clients in making good decisions about how to proceed.  (Note- Several of the items in this bullet point list come from instructions given to counsel participating in the Med-NJ Mediation Program in the Supreme Court, New York County.)

• What are the strengths of my case?
• What are the most obvious weaknesses?
• When will the case be tried?
• Is interest running?
• What is the sustainable verdict value of the case?
• What are the financial costs of going to trial, as opposed to settling the case?
• What have been the obstacles to a settlement up to this point?
• What are the strengths of my adversary's case?
• What are the most obvious weaknesses of my adversary's case?

Interest can be a significant factor in these cases.  Always remember that interest on a judgment in New York is assessed at 9%.  If the plaintiff has summary judgment, they will be awarded interest at that rate, from the date of the service of the order with notice of entry on the summary judgment motion.  This means that a two or three-year hiatus between summary judgment and trial (not unheard of in some counties in New York City) will result in an 18-27% addition to any award that a jury might make.

The overall goal of this evaluative process is to establish a reasonable settlement range.  You need to know where you want to end up before the mediation actually starts.  But, as we will discuss in the final section of this article, you need to be prepared to change your “bottom line.”

Deciding Who Should Be Involved in the Mediation

The true decision makers must be involved in the mediation process.  Without the involvement of the right people, a mediation is doomed to failure.  Fortunately, there are several ways to get the decision makers involved, and technology, including virtual platforms like Zoom, gives us tremendous flexibility here.

Our list, of course, starts with the injured plaintiff.  Only they know the true impact of the accident on their life and at the end of the day, it is “their” case more than anyone else.  But we have also seen the strong influence that spouses and close family members can have in these situations.  So, it is incumbent upon the plaintiff's attorney to make sure that their client, and anyone else who will influence the settlement decision, is an active participant in the mediation.  That does not necessarily mean that the decision makers must be physically present in the room. However, the attorney must be able to communicate with their clients quickly and efficiently, throughout the proceedings.

The defendants' side can be more complicated here.  If the client, as opposed to the carrier, has any input on settlement, then defense counsel must make sure that a representative is available in person, virtually or by phone.  Of course, the same is true for the representative from the carrier, as they must be consulted on every offer and counteroffer.

The carrier representative's involvement gets more complex when there are multiple policies in play.  Much has been said about having a defendant's excess carrier involved in a mediation.  Some will argue that it sends “the wrong message”, as you are conceding that the primary policy will not be sufficient to resolve the case.  That may well be true, but defense attorneys must be realistic here.  As noted above, the damages in these cases can be substantial and they often exceed the primary policy limits.  If it is at all possible that the excess carrier's policy will be needed, you have to get them involved in both the evaluation process, as well as the mediation itself.      

The “Defense-Only” Session

Every litigant in a Labor Law case must know the full extent of all available insurance coverage for every party.  The recent amendments to CPLR Section 3101(f) mandate such disclosure within ninety days of the service of the defendant's answer.  It is imperative that complete copies of all primary, excess and umbrella policies be obtained.  As discovery plays out, the parties will hopefully be able to better understand which policy or policies will be most at risk.

Of course, experience tells us that these insurance and related indemnity issues are often complex and rarely uncontested.  In many instances, these questions must be addressed before any type of offer can be made to the plaintiff.  This brings us to the notion of a “defense-only” mediation session, where the attorneys for the defendants and third-party defendants, along with their primary and excess carriers, can discuss various proposals for funding the overall settlement with the plaintiff.  This method avoids the all-too-common scenario where the injured party and their counsel wait around all morning or even all day for the defendants and their carriers to resolve their differences, only to learn that no consensus was reached and therefore no offer of any consequence could be made.  While incredibly frustrating for the plaintiff's attorney, this result will be even more aggravating for the injured party.  With presumably little understanding of the intricacies of these issues, they may well see the mediation process itself as a total waste of time, thereby making subsequent negotiations more difficult if not impossible.

The “defense-only” session can also give the defendants and carriers an opportunity to be candid about their opinions concerning the reasonable settlement range of the plaintiff's case.  Indeed, this subject must be broached by the mediator during the “defense-only” session so that the parties have an idea as to what their percentage contributions will amount to if an overall settlement with the plaintiff can be reached.

A “defense-only” session can be dispensed with where the insurance and indemnity issues are straight-forward, or where they have already been resolved, via tender acceptances, summary judgment motions and/or related declaratory judgment actions.  The key takeaway here is that the question of whether to have a “defense-only” session needs to be considered well in advance, so that the sessions can be scheduled accordingly.

The Mediation Mindset – Listening is the Key

One of the wonderful things about the mediation process is that once the parties have all agreed to mediate a case, they have a common goal- a global settlement of the litigation.  This means that the mediation will be more of a collaborative endeavor than a trial, where everyone wants to win and there are, inevitably, massive disappointments.  But the collaborative nature of a mediation will only work if every attendee- counsel, client, carrier- comes to the mediation with an open mind.

No one in the history of the world ever learned anything just by talking.  In order to learn, we must read, observe and, above all, we have to listen.  So, one of the most important items of preparation for a mediation is reinforcing the importance of listening to all that is said, and of responding in a way that helps to move the process forward. All mediation participants are well-advised to stay away from certain words and phrases.  If an initial demand seems too high, a response like “That's a non-starter!” or “We're not gonna bid against a number like that!” could easily bring the session to a crashing halt.  Perhaps a better response might be to tell your adversary that the number seems high and then invite them to better explain or even itemize their assessment of the damages.

It may seem counterintuitive to spend so much time and effort on evaluating the case before the mediation, only to have you revise your numbers later.  But the evaluation of Labor Law claims is enormously subjective and reasonable minds will differ.  So, the question is not just what YOU think the case is worth; it is also what range of numbers will achieve the desired goal of getting the case resolved.  Those figures may be higher or lower than those which you were considering in advance of the mediation.  It is important to maintain flexibility so that we can avoid having to say, “But we were SO close!”

One last thing to consider, before your case gets sent out for jury selection, you will likely have a settlement conference with the judge in the trial assignment part.  After jury selection has been completed, you will have more settlement discussions with the assigned trial judge, before opening statements.  Settlement positions will change, more money will be offered by the defense and a lower settlement figure will be considered by the plaintiff.  Why were these figures not discussed previously?  The answer may well be that the parties did not come to the mediation fully prepared to listen to their adversaries and to adjust their positions accordingly.   

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Reprinted with permission from the January 4, 2024 edition of the NEW YORK LAW JOURNAL © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or [email protected]

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Michael B. Titowsky, Esq. is a member of NAM's (National Arbitration and Mediation) Hearing Officer panel and is a highly experienced attorney who has focused the majority of his legal practice representing clients in litigation and private mediation focusing on personal injury and labor law matters. Throughout his 40-year legal career, he has represented clients throughout the New York Metropolitan area in thousands of cases, both in court litigations and private mediations. Prior to joining NAM, Mr. Titowsky was a partner in a prominent New York law firm. During his 29-year tenure with the firm, he handled a variety of personal injury related matters including high-exposure NY labor law, premises liability, motor vehicle, general liability, insurance coverage/indemnity, and medical malpractice cases from inception to trial and appeals. He possesses an exemplary ability to communicate and connect with all parties to resolve the case in a cost effective and satisfactory manner. Mr. Titowsky is available to mediate and arbitrate cases throughout New York State.

For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at [email protected] or at 646-737-1414 ext. 128.