Does having Insurance impact the use of mediation and potential settlement?

Mediation can be used to resolve almost all types of civil, commercial and workplace disputes. Sometimes, one or both parties have insurance, whether that be health, home, travel or personal insurance, that could cover the claims at issue in a dispute. Even when insurance companies are involved, mediation can still be considered as an alternative to litigation to settle a claim.

Insurance companies care about how much a case is likely to cost them if it goes to trial and therefore mediation could be the way forward as not only are success rates high, but Mediation also provides a cost-efficient, less adversarial, and quicker solution compared to traditional litigation. If the parties to a case do decide to use mediation, then it is most likely that a representative from the insurance company will want to attend or be available on the day mediation takes place. This is largely because they must approve or know about all settlement offers and, if a settlement is reached this must be approved by the Insurance company.

All insurance policies have policy limits or maximum amounts that they will pay for the claims at issue. Therefore, it is important that a representative from the insurance company is present so that they can provide the insured party of these limits especially if there are other pending claims.

If both parties to the claim have insurance, then what the parties want tends to be secondary as both insurance companies aim to pay as little as possible to make the claim go away. However, mediation can still be beneficially as all parties have to agree to any settlement offered.

At the end of the day chances of success at trial will have an influence how much the parties might agree to settle at the time of mediation or whether either party would prefer to go to court. As we have observed going to court can be risky, even with a strong case, as witnesses fall apart, or judges make surprising decisions.

As mediation is voluntary, confidential, without prejudice and binding, it shows why mediation is increasingly used to settle disputes even when insurance companies are involved.

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