Vol. 7

July 2005

In this issue:

Georgia Tort Reform Legislation: Effect on Mediation

Henning Neutral Profile
Strapping on the Tool belt

Henning and Our Neutrals in the News

News from the Courthouse — Mediation/Arbitration Updates
Agreements To Arbitrate Insurance Disputes Found Invalid

ADR Tips

Georgia Tort Reform Legislation: Effect on Mediation

One is the end of joint and several liability.  In the past, a case with multiple defendants would share liability equally.  Under the new law, blame can be apportioned, meaning, for instance, a physician who is sued for an event in a hospital could bear a larger portion of liability than the hospital. “For instance, if the jury finds a hospital 15% negligent and a physician 85% negligent, the physician will have to pay 85% of the verdict,”says Jim Stewart, Henning neutral. Attorneys we spoke to felt physicians would be surprised at this element of a bill that was designed to help alleviate their medical malpractice insurance burdens.

The section of the law which has provoked the most ambiguity has to do with offers of judgment and the possibility of shifting the attorney fees.  One attorney noted that under the new law opposing offers of judgment could create a situation in which each side would have to pay the opposing attorney’s fees. This theoretically occurs when opposing offers are close enough that 25% above one and 25% below the other intersect.

“Most legislators may have been trying to do the right thing,” says Terrence Croft, Henning neutral.  “However, both sides are troubled by the ambiguity and convolutions of the law.  It was passed too quickly without enough study and debate.”

“There was a feeling that the pendulum had swung too far in the plaintiff’s favor,” says Art Glaser. “Now there’s a feeling that it’s gone too far in the other direction.”

Henning neutral Glaser, who moderated a panel at a recent ICLE meeting on the law’s impact, says attorneys and their clients on the panel from both sides were disturbed by the law’s ambiguities.

Interestingly, one of the provisions of the law reflects a recent ADR Tip from Henning.  Since mediation is not like a trial, a defendant would be wise to tell a personal injury plaintiff up front in the mediation that they are sincerely sorry that the plaintiff has been hurt.  This goes a long way in the negotiation process.  The bill allows physicians to apologize for an incident, without the apology being used to assign blame.

What does the new law mean for mediation?  Glaser feels the statute regarding shifting attorney’s fees is especially confusing.  People are not sure if it applies to both plaintiffs and defendants as written.  It will affect the offers made before mediation. According to Glaser, this will be the biggest effect on mediation.   “The ballpark may be smaller but it’s the same game, the same struggle between plaintiffs’ and defendants’ numbers,” says Glaser.  Jim Hiers says, “..smaller ballpark, same game.” 

“People go to mediation for three reasons,” says Croft. “Mediation saves time, saves money and eliminates uncertainty. The ambiguities of the new law, until better defined by the courts, will make mediation even more attractive to both sides.”

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Henning Neutral Profile: Jim Stewart

“The window frames of my house all needed to be replaced and for the first time I had the time to do it myself instead of hiring someone,” says Stewart. Self-taught, Stewart learned how to replace the frame by taking one apart to analyze its construction.

Born in Atlanta, Army brat Stewart grew up in Springfield, Illinois where he attained a degree in business from Eastern Illinois University. After college, he came back to Atlanta. His first job was as an assistant manager for Kresge at Lenox Square, when it was still an open-air mall.

His career goal was to be an insurance adjuster, a real estate agent and an attorney in a small town – to do it all. Following Kresge, Stewart got a job in claims at Liberty Mutual but was fired for going to Woodrow Wilson College of Law at night. No hard feelings, in fact, Stewart thinks it was a blessing because it got him into the medical malpractice arena with St. Paul. “Sometimes I think the reason I passed the bar was I was lucky enough that one of the St. Paul defense lawyers wrote a medical malpractice question on the bar exam,” Stewart chuckles.

This background gave him a solid footing for a successful career as a personal injury plaintiff’s attorney. He still handles a small number of cases but enjoys doing mediation full time.

“I’ve been a part-time mediator for 17 years. I feel fortunate because there are 10,000 people out there who want to be mediators,” says Stewart. “I love it. You get to meet different people every day, great people, on both sides, who want to come to a resolution.

I feel like I’ve really accomplished something good at the end of the day. My wife, Gail, knows, though, by the look on my face when I come home if I haven’t resolved a case.”

Gail, an educational consultant, and Stewart have a daughter, Elizabeth who at 15 is trying out her acting chops this summer performing in Highlands, North Carolina.

For more information on Jim Stewart, go to www.henningmediation.com

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Henning and Our Neutrals in the News

• Pat Siuta and Ann Clanton provided mediation training for 33 employees of the Tennessee Department of Labor’s Workers’ Compensation Division in Nashville at the end of April.
  
  
• Henning neutral Hon. Dorothy Beasley, former Chief Justice of the Georgia Supreme Court has just returned from presenting three lectures in Linz, Austria on “International Commercial Arbitration in a program sponsored by Georgia State University.  While there she attended a special briefing by Manfred Heider at the international Arbitral Centre of the Austrian Federal Economic Chamber.
  
  
• Henning neutral Rex Smith will be giving a speech on “Chilling the Hype: The Tone and Tenor of Mediation” at the Fiduciary Law Institute Seminar July 14-16 at St. Simons Island, Georgia. He will also be speaking on “Detecting Fraudulent Psychological and Neuropsychological Injury Claims” at the 20th Annual Seminar and Expo on Insurance Fraud, September 7-10, 2005 in Phoenix Arizona.
  
  
• Art Glaser moderated a panel discussion on the effects of Tort Reform at the ICLE Seminar “Winning at Mediation – Civil Justice Reform Impact on Mediation: Is the Crystal Ball Broken?” May 20, 2005 in Atlanta.
  
  
• Henning neutral Jim Stewart will be speaking at the GTLA Auto Torts Seminar at the Hilton Head Crowne Plaza at Hilton Head Island, SC on August 5-6 on effective mediation of auto cases. 
  
  
• Henning neutral Rex Smith will be participating as a panelist on “Selecting a Neutral Mediator or Arbitrator” on July 13, 2005 at a private “Lunch & Learn” for associates at McKenna Long & Aldridge.  

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News from the Courthouse--Mediation/Arbitration updates

Georgia Supreme Court Holds Agreements to Arbitrate Insurance Disputes Invalid

In Love et al. v. Money Tree, Inc., decided June 6, 2005, the Georgia Supreme Court addressed two issues:  1) whether the sale of memberships in automobile clubs constitutes the sale of insurance; and 2) whether the Federal Arbitration Act (FAA) preempts the Georgia Arbitration Act, OCGA section 9-9-2(c) (3), which provides that agreements to arbitrate disputes regarding “contracts of insurance” are invalid.  Money Tree, Inc. made consumer loans and offered consumers the opportunity to purchase automobile club memberships in conjunction with the loan. The loan documents included a provision requiring arbitration in the event of a dispute between the parties.  Money Tree subsequently filed a motion to compel arbitration arguing that the FAA governed the dispute.  Although the trial court and Court of Appeals found for Money Tree, the Supreme Court reversed, finding that the sale of automobile memberships should be considered insurance and, therefore, Money Tree was engaged in the business of insurance.  The court noted that the FAA generally preempts state law to the contrary.  In this case, however, another federal statute, the McCarran-Ferguson Act, prohibits the application of any federal law when it would invalidate or impair any state law enacted for the purpose of regulating the business of insurance.  The Supreme Court held that section 9-9-2(c) (3) of the Georgia Arbitration Code is a state law enacted for such purpose and, therefore, was not preempted by the Federal Arbitration Act.

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ADR Tips from Henning

If your case involves only the amount of money to be paid and the negotiation range has substantially narrowed during mediation but you are still at an impasse, consider using the ending points of the negotiation as the basis for a "high-low agreement," and arbitrating the dispute with another neutral, so you can resolve the matter.

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