Mediation

Mediation is the ADR process most often used to resolve medical malpractice disputes outside of the courtroom. It involves face-to-face negotiations between all counsel and insurance carriers, and always includes the claimants themselves being physically present for the entire process. If the physician or hospital has consented, or has no right to consent, it may be decided among the parties that their presence, although welcome, is not mandatory. If the physician has not consented, then the physician will be present to actively participate in the process.

The mediator generally asks the parties for documents to be submitted prior to the scheduled mediation session. Mediation focuses on obtaining information and creating dialogues, so separate ex parte contact between counsel and the mediator is not prohibited. Indeed, many mediators prefer to start the mediation in an asymmetrical manner by meeting first with each side before the mediation session.

There are no formal court procedures or rules of evidence in mediation. Unlike a judge or arbitrator, the mediator has no authority to render a decision or force the parties to accept a settlement if a full resolution is not voluntarily reached. The mediator’s role is to assist the negotiating parties.

Typically, the parties, party representatives, insurance representatives and mediator initially meet in a joint session. After introductory remarks by the mediator, plaintiff’s attorney is given an opportunity to make a short opening statement. Plaintiff is then given a chance to explain how he or she has been affected by the occurrence. Everyone present may be permitted to ask the plaintiff questions. Defendant’s attorney and defendant are then provided with a similar opportunity to make an opening statement and presentation.

After the joint session, the mediator meets with each party separately. In each caucus, the mediator discusses the risks of the case, such as best and worst outcomes, the quality of evidence and the costs of litigation. The mediator also discusses possible settlements. These need not be limited to financial compensation. Creative settlements such as apologies and changes in policies or procedures can be considered. For example, money has been donated to charities or hospitals have endowed educational programs to honor family members of the claimant. It is common for the mediator to go back and forth between the parties for a number of caucuses. However, the mediator does not disclose what is discussed in each caucus unless authorized by the respective party to do so. Furthermore, a mediator does not side with any party or argue the facts or law on behalf of any party.

Most cases are scheduled for a daylong meeting that starts in the morning and ends by normal business hours. Some cases go into the evening or a second day, but many are resolved in a few hours. Sometimes parties leave with offers on the table to go home and think about for a few days prior to making a decision. The concept, however, is to assemble all the decision-makers in one place at one time. Mediation is about information, risk assessment, humanizing the conflict, catharsis and choice.

Communications within the mediation process are protected by Pennsylvania state law from disclosure in subsequent legal proceedings. The mediator does not become involved in the litigation and may not be called to testify or otherwise participate in any court or administrative proceeding regardless of the outcome of the mediation. The confidentiality of the entire mediation process continues even if the case is settled. In many ways, mediators are akin to emergency room physicians, who have limited contact with the parties and then transfer the case from their "service" back to the counsel, the parties, the insurers or the courts. Most mediators expand the confidentiality beyond the courtroom by having the parties sign a contract stating that no communications made during the mediation process will be disseminated to the public.

Any case where a defendant is amenable to settling is suitable for mediation. In cases where all defendants have determined the case is defensible and prefer a court resolution, mediation is not the proper ADR process.

In most cases, the parties agree to have the case mediated. However, Rule 1042.21 of the Pennsylvania Rules of Civil Procedure provides for court-ordered mediation upon motion by a health care provider, even prior to the exchange of expert reports, in a medical professional liability action. The MCARE Act also provides that "[u]pon the request of a party to a medical professional liability claim within the fund coverage limits, the department may provide for a mediator in instances where multiple carriers disagree on the disposition or settlement of a case."

Arbitration

If the parties are unable reach agreement at mediation, they may explore another ADR process such as binding arbitration to resolve outstanding issues. Sometimes parties have a good faith disagreement on the economic value of a claim despite a consensus on issues of negligence and causation. Some institutional health care providers, with insurance carrier, physician and MCARE approval, have agreed to let a third-party neutral, usually an experienced lawyer, sit as a trier of fact and law to issue a final and binding decision. After an evidentiary hearing, usually lasting one or two days, a decision is issued. This is private and its distribution is on a need-to-know basis. If the physician is found liable, then it has the same effect for National Practitioner Data Bank reporting purposes as a settlement or jury verdict. There is no appeal from an arbitration award. If the arbitrator’s decision is in favor of the physician, there is no reporting. Arbitration may also be used to apportion damages between multiple defendants who are not able to do so themselves. One of the authors has served in this capacity numerous times over the years.

High-Low Agreement

"High-low" contracts are often utilized within the trial or arbitration setting to limit risk for all parties. Parties agree that no matter what the outcome of a jury verdict or an arbitrator’s decision, the final amount will be molded to be within pre-agreed amounts. For example, if the high-low is $200,000 and $500,000 and there is no liability finding, the claimant still receives the minimum $200,000 and there is no data bank reporting requirement. If the opposite happens, and the verdict is $1,000,000 instead, then only $500,000 is paid. If the amount is between the minimum and maximum, then that amount is paid.

Mediation is currently being used successfully in medical malpractice cases throughout Pa. However, two institutions have been in the forefront of developing ADR programs for use in medical malpractice disputes. These institutions are the University of Pittsburgh Medical Center (UPMC) and Drexel University College of Medicine (Drexel Med).

UPMC instituted a formal mediation program, which is facilitated by JUSTUS MMG, in the fall of 2004. Thirty-seven medical malpractice cases have been referred to JUSTUS by UPMC over the past year. Mediations utilizing a single mediator have been conducted in 27 of the 37 cases with 24 successfully settling. One of the three cases that did not settle after mediation has been scheduled for arbitration. The other two cases in which mediation did not result in a settlement are scheduled for trial within the next six months. Mediations have been scheduled, but not yet conducted, in four of the remaining ten cases. The mediation sessions were cancelled in the other six cases, primarily because the parties were able to settle the cases on their own.

UPMC has found mediation to be a cost effective and efficient way to manage appropriate cases. First, cases that successfully proceed through mediation are resolved much more quickly. Secondly, UPMC has realized significant litigation cost savings. To date, they estimate that they have saved over $1 million in defense costs, as opposed to going to verdict. Although harder to quantify, they also believe that mediation has reduced settlement and verdict ranges.

A variation of the traditional single mediator model being utilized by UPMC and others has been implemented by Drexel Med in Philadelphia. Drexel Med’s program is based on a mediation program created by the Rush-St. Luke’s-Presbyterian Medical Center in Chicago. It utilizes two co-mediators, both medical malpractice lawyers trained in mediation, unless otherwise agreed. Both attorneys are selected by plaintiff’s counsel but paid for by the defendants in equal shares.

Drexel Med has referred 30 cases to mediation since launching its program in March, 2004. As of August 31, 2005, twenty cases have gone to mediation. The remaining ten cases are either too early in discovery, awaiting agreement by all parties, or in the process of being scheduled. Of the 20 that have been mediated, 17 settled. Carl (Tobey) Oxholm III, General Counsel for Drexel Med, believes that utilizing mediation in these cases resulted in substantial cost savings. Drexel Med obtained defense verdicts in the three cases that were not successfully mediated, thus disputing the notion that an agreement to mediate is a sign of weakness in a defendant’s case.

In a case mediated successfully during fall, 2004, involving three physicians as defendants, the case settled with two physicians consenting and their insurers paying on their behalf, and one physician being dismissed from the case. One of the consenting physicians had the following to say: "Everyone was, however, very satisfied that a reasonable compromise had been reached, that the uncertainties of trial were avoided, and that the issue had finally been put to rest. This outcome would not have been possible without the skills of the mediator who approached the problems methodically, without apparent bias, calmly, patiently, and above all, with a constant smile. The mediator showed care and concern for all parties and for all points of view. In medical situations wherein damages have occurred and there were opportunities for physicians, hospitals, nurses, or other caregivers to prevent those damages, mediation under the direction of a skilled mediator is clearly superior to the uncertainties of a jury trial in the threatening environment of a courtroom."

Mediation is not right for every case. However, where there is at least some merit to the claim and the risk of proceeding to trial is deemed to be too great, mediation or another form of ADR should be considered. ADR can result in the fairer and more efficient resolution of health care disputes.