If your long-term disability (LTD) insurer has rendered a final denial regarding your claim for benefits such that you are unable to file any more appeals to the insurer, you have “exhausted your administrative remedies” under the plan. This means your next step is likely filing a lawsuit against the insurer for wrongfully denying your benefits under 29 U.S.C. § 1132(a)(1)(B). After the lawsuit has been filed, and while the case is pending at court, it’s common for the parties to engage in settlement discussions to see if a resolution can be reached without the need for protracted litigation. In fact, studies suggest that up to 95% of lawsuits end with a pre-trial settlement. Mediation can serve as an effective tool in helping the parties reach such a resolution.
What is Mediation?
Mediation is a voluntary and confidential process designed to facilitate dispute resolution between parties in conflict. It involves a neutral third-party mediator who helps guide the discussions towards a mutually acceptable resolution. The process typically begins with an introductory session where the mediator explains the ground rules and establishes a respectful and cooperative atmosphere. Private caucuses may occur where the mediator meets separately with each party to discuss confidential matters and encourage candid communication. During these private sessions, each party has the opportunity to express their concerns, interests, and desired outcomes. The mediator then facilitates settlement discussions by exchanging information, including settlement offers and counteroffers, between the two sides. The mediator may also employ various techniques to assist parties in generating options for resolution. Ultimately, the goal of mediation is to help parties reach a mutually acceptable agreement that addresses their underlying interests and concerns. If successful, the agreement is formalized into a written document, providing a basis for resolving the dispute without resorting to costly and time-consuming litigation.The Benefits of Mediation for LTD Cases
- Time-Efficient: Mediation often leads to faster resolutions compared to litigation, which can drag on for months or even years. By engaging in structured negotiation facilitated by a trained mediator, parties can address key issues, explore solutions, and reach agreements in a more expedited manner. In fact, a recent study suggests 78% of mediated cases ended in settlement.
- Risk Mitigation: Unlike a lawsuit, resolutions reached via mediation are almost always a compromise among the parties. This helps alleviate the stress and uncertainty associated with traditional litigation.
- Control and Flexibility: Parties involved in mediation have more control over the outcome of the case. They can actively participate in crafting solutions tailored to their specific needs and circumstances, rather than relying on a judge to make decisions for them. This level of control and flexibility is empowering for all parties involved.
- Confidentiality: Mediation proceedings are confidential, providing a safe space for parties to discuss sensitive issues and explore potential resolutions without fear of public scrutiny. This confidentiality fosters open and honest dialogue, which is essential for reaching meaningful agreements.
How to Prepare for Your Mediation
Working with your attorney to prepare for mediation is an important step to maximize your chance of reaching a favorable outcome. Here are some steps to keep in mind as your mediation date approaches:- You should collaborate with your attorney to ensure all relevant documents—including pertinent medical records, doctors’ statements, your LTD plan, etc.—have been gathered and organized in advance of mediation. Attorneys often prepare a “Mediation Statement” for the mediator’s review before mediation. This statement will provide a concise summary of the relevant facts and each party’s position on key issues. By preparing a well-organized and comprehensive mediation statement, parties can effectively communicate their positions, streamline discussions, and work towards a successful resolution during the mediation session.
- Ensure you are familiar with the location and venue of your mediation, regardless of whether it’s in-person or virtual. If it’s in-person, make sure you allow yourself sufficient travel time (including time to find parking). If it’s virtual, be sure you have the proper technological equipment to join the session and that you know how to navigate the platform. Common video conferencing platforms include Zoom, GoToMeeting, and Microsoft Teams. You will also want to make sure your computer’s microphone and camera are functioning properly. (It’s advisable to use a laptop or computer for virtual mediations, rather than a phone or tablet.)
- Talk with your attorney about your settlement goals in advance, but come to mediation with an open mind. Keeping your attorney apprised of your settlement goals will allow them to devise an effective negotiation strategy. That said, a certain level of flexibility—e., compromise—is essential to reaching a mutually acceptable agreement with the other side.
Things to Keep in Mind During Your Mediation
There are a few things to keep in mind on the day of mediation to help you to get the most out of the process.- Often times, there’s a surprising amount of “down time” during mediation, particularly when the mediator is meeting with the other side. While these time blocks can be used to strategize with your attorneys, they also provide a great opportunity to take a breather, have a rest, get a snack, etc. Mediations often last an entire day, so take advantage of these built-in brain breaks.
- Don’t blame the messenger, i.e. the mediator. They are often tasked with delivering frustrating or discouraging news, such as a counter offer that is too low, or they may hold a mirror up to your case’s weaknesses to help you realistically assess your risk level. This does not mean they are against you; rather, their job is to guide the parties towards a mutually agreeable result that balances the party’s strengths versus weaknesses and risks versus rewards.
- Don’t hesitate to ask to speak with your attorney privately, especially about sensitive matters. Unlike the mediator whose job is to get the parties to come to an agreement, your attorney’s job is to zealously advocate for your best interests, prioritize your goals, and focus on reaching a settlement that meets your needs and interests. A mediator should always respect your right to speak about sensitive matters privately with your legal counsel.