Mandatory mediation for workers' compensation cases was introduced in North Carolina in the mid-1990's, and it has proven extremely successful. John Schafer, deputy commissioner and dispute resolution coordinator for the North Carolina Industrial Commission, reports that the total number of cases referred to mediation in 2011-2012 fiscal year was 8,523. This is the twelfth consecutive year in which the number of cases mediated exceeds 8,500.
When an issue arises in a case, many parties choose to mediate in lieu of litigating the matter through the full evidentiary hearing process. Other parties often look to mediation as a venue for final resolution once the claimant reaches maximum medical improvement. John Schafer, Deputy Commissioner and Dispute Resolution Coordinator for the Industrial Commission, reports that the total number of cases referred to mediation in 2011-2012 fiscal year was 8,523. Deputy Commissioner Schafer stated this is the twelfth consecutive year in which the number of cases mediated exceeds 8500.
The statistics tell the truth: mediation works. Many claims are either fully resolved or no longer require a hearing after mediation. Deputy Commissioner Schafer indicated that resolutions during mediation continue to rise, stating “our mediation settlement rates have remained very high - 70.6% at mediation conferences, and 75.6% when settlements of cases at or before mediation conferences are included. Both of those settlement rates are slightly higher than the settlement rates for the 2011-12 fiscal year.” Per Deputy Commissioner Schafer, this allows the hearing docket to remain stable and manageable for the Deputy Commissioners.
In North Carolina, any time a Form 33 hearing request is filed, the matter is automatically referred to the mediation section. At that point, Deputy Commissioner Schafer issues an Order requiring the parties to mediate. The exception to this rule is if the plaintiff is proceeding pro se. If the parties feel strongly that mediation is unnecessary or would not be fruitful, they may also file a motion to dispense with mediation. This will be considered and ruled upon by the Deputy Commissioner that is the head of the mediation section.
If the parties wish, they can also participate in a voluntary mediation. At that point, the parties can simply agree to mediate and file a Form MSC 1, Consent Order for Mediated Settlement Conference with the Industrial Commission, followed by a designation of mediator. Additionally, either party can file a motion for mediation. This can happen at any point in the claim. Typically, these are filed when a party is non-responsive to negotiations. In order to request the mediation under these circumstances, either party may file a Form MSC 2, Petition for Order Referring Case for Mediated Settlement Conference.
Once mediation has been ordered, the parties must designate a mediator. Pursuant to Rule 2 of the Rules for Mediated Settlement Conferences, the parties have fifty-five (55) days from the filing of a Form 33 to file a designation of mediator. It is very important to have a mediator designated within that time frame; otherwise, a mediator from the NCIC Mediator Database will be appointed. Additionally, if the parties cannot agree on a mediator, the Industrial Commission will appoint one. The mediation must then be completed in 120 days of the Order referring the case to mediation. Pursuant to Rule 3 of the Rules for Mediated Settlement Conference, the mediation shall not be a cause of delay for the proceedings, including a hearing. If the mediation is not scheduled within the 120 days allowed, the case will proceed anyway. This means that it is possible that the hearing could occur before the mediation if the deadlines are passed.
At a mediated settlement conference, a neutral mediator will preside. The mediator is not a judge and does not make findings of facts or conclusions of law. Instead, the mediator’s job is to analyze each side’s respective position in the case and facilitate negotiations that hopefully will result in some kind of resolution. Both parties will be given an opportunity to educate the mediator about the facts of the claim and the issues in dispute. Thereafter, the parties will break into private sessions to begin negotiations. While the rules governing mediations require that the parties physically be present, either party may consent for the other party to be on telephone standby. While on telephone standby, the mediator has the authority to request to speak directly with that party.
The mediator’s fee is split between the parties; however, the defendants must pay the claimant’s share up front (i.e., the carrier pays the entire bill initially). If a final settlement is reached, the defendants may deduct the claimant’s share of the mediator’s fee from the final amount owed. If an agreement is reached at the mediated settlement conference, the parties will enter into a Mediated Settlement Agreement. This is a legally binding contract. Pursuant to Industrial Commission Rule 502, there is specific language that must be included in order for a Compromise Settlement Agreement to be approved by the Industrial Commission. Similarly, that language must be included in a Mediated Settlement Agreement in order to be enforced if the settlement later becomes an issue. If the claimant later refuses to sign the compromise settlement agreement, a party may request a hearing to enforce the mediated settlement agreement.
This article originally appeared on February 19, 2013 on the Workers’ Compensation Institute’s website, and is republished here with permission.
This legal update is published as a service to our clients and friends. It is intended to provide general information and does not constitute legal advice regarding any specific situation.
ABOUT THE AUTHOR
Chrystina F. Kesler is an attorney with McAngus Goudelock & Courie. Founded in 1995, MG&C is a full-service law firm with offices in Columbia, Greenville, Charleston and Myrtle Beach, SC, and Asheville, Charlotte and Raleigh, NC. The firm’s practice areas include workers’ compensation defense, employment, banking and consumer law, administrative law, government relations, construction litigation, commercial litigation, products litigation, business law, real estate law and health care and regulatory issues. Ms. Kesler may be reached at 919.719.8200 or by email.