Insurance carriers are generally an essential party to a mediation, but what if they resolutely deny any coverage? Booth v. Davis, No. 10-4010 (D.Kan. 2014), was a substantial legal malpractice lawsuit. One group of insurers agreed to attend a mediation session, but others refused based on their denials of coverage. Plaintiff asked to court to compel the “denying carriers” to attend, but the court refused. The narrow reason for the ruling was a local rule that required attendance at a mediation of the party or an authorized representative, and since Defendant was going to personally attend, the local rule’s requirement would be fulfilled, and the court lacked the power to compel other entities to attend.
The broader reason cited by the Court, however, was that the presence of the “denying carriers” would not serve any purpose because of their coverage denials. But was that true? What if those denials of coverage were questionable? The non-attending carriers would certainly refuse to contribute towards a settlement if not in attendance at the mediation, and Plaintiffs might consequently believe that the mediation was not presenting all of the available resources to put together a settlement. If those carriers were required to attend, on the other hand, even if they refused to contribute a penny, Plaintiffs would feel like they at least had a fair opportunity to get some contribution from those entities.
One of the keys to a successful mediation is getting plaintiffs to believe that they are getting the best deal the defendant has to offer, and defendants feeling confident they are paying the lowest amount the plaintiff will take to settle. No one wants to walk away from a mediation thinking they left money on the table. There may be cases, therefore, where having certain parties attend a mediation will increase the chances of success, even if those parties will almost certainly refuse to contribute a penny, because plaintiffs will feel like they had a fair opportunity to obtain the best possible settlement.
You may also be interested in my recent article in the Chicago Bar Record about how to ensure that a mediated settlement is binding.