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In the context of an NC Workers’ Compensation case, a Mediation–formally referred to as a “Mediated Settlement Conference”–is an attempt by two or more parties to resolve an outstanding dispute through voluntary agreement. Often, this attempt comprises an effort by the parties to “Settle” the claim in its entirety, for a lump sum of money. Although the parties can negotiate toward settlement of the case outside of mediation, many parties find the structured, yet informal, setting of a mediation to be an effective means of working toward settlement.
The mediation is conducted by an independent “mediator” and provides the parties with the opportunity to resolve their differences without the time, expense, and uncertain risk of proceeding to an evidentiary hearing, or trial, in the case. The mediator is an individual person–generally a very experienced lawyer in his or her own right–who is highly trained in the art of negotiation. The mediator’s professional goal in such a setting is to help people and companies resolve their disputes. The mediator has no personal stake in the outcome of the legal matter, and the mediator has no judicial or decision-making power in the case. Instead, the mediator’s responsibility is to schedule and control the mediated settlement conference, and–if possible–to guide the parties toward resolution of the dispute.
A mediation may be scheduled as the result of an agreement by the parties to try and negotiate in such a setting. It may also be scheduled as the result of an Order by the North Carolina Industrial Commission, directing the parties to participate in mediation. If the parties to a North Carolina workers’ comp case are ordered to mediate the claim, a mediator must be selected by the parties (or their lawyers) within 55 days of the Commission’s Order, and the mediation must be completed within 120 days of the Order. Often, the lawyers will agree upon an appropriate mediator (and some mediators are certainly selected more frequently than others). However, if the parties or their attorneys do not select a mediator, then the Industrial Commission will appoint one, from a list of eligible individuals.
In a North Carolina, mediation in a workers’ comp case is governed by the “North Carolina Industrial Commission Rules for Mediated Settlement and Neutral Evaluation Conferences.” When the Commission orders the parties to mediate a case, it is often because at least one party has filed a Form 33 Request for Hearing with the North Carolina Industrial Commission. The requirement is not applicable when the parties are not represented by counsel.
Because the scheduling of a mediation involves the coordination of the schedules of multiple individuals–including the parties, their lawyers, and the mediator–it can take considerable time to set a date for the conference. In some cases, mediation is conducted remotely, by way of internet video conference–indeed, as of the date of this writing, such appears to be the case in most workers’ comp claims following the Covid-19-related changes of early 2020.
When the day of mediation arrives, the injured worker and his or her attorney will be present (remotely or otherwise), along with the attorney for the defendants (the employer and its workers’ compensation insurance company). Also present, of course, will be the mediator selected by the parties. Occasionally, a representative of one or both defendants will also be in attendance. The mediator will convene the mediation and provide a brief overview of the rules and conduct of the conference. The parties’ attorneys will then each introduce the case from the perspective of their respective clients. Thereafter, the mediator likely will choose to separate the parties into individual rooms (either physically or virtually, depending on the format of the mediation).
The mediator will then travel between the separate rooms, facilitating negotiations along the way. If, the parties ultimately reach an agreement to settle the workers’ comp claim, the mediator will prepare a “Mediated Settlement Agreement” for the parties to sign. if such an agreement is signed on the date of mediation, then the case is settled in a legally binding fashion. The Mediated Settlement Agreement cannot be set aside, except in the event of fraud, misrepresentation, undue influence or mutual mistake–all of which are exceedingly rare.
Generally, within a few days after the execution of the Mediated Settlement Agreement, the attorney for the defendants will draft a longer version of the settlement agreement, referred to as a “Compromise Settlement Agreement.” This longer agreement is often also referred to, informally, as a “Clincher.” The clincher must also be signed by the parties. It is then submitted to the Industrial Commission, along with all applicable medical records of the injured worker, for review and approval.
If no settlement agreement is reached on the date of mediation, then (of course) no mediated settlement agreement or clincher will be signed by the parties. If the mediation resulted from an order by the Industrial Commission following a Request for Hearing by one of the parties, the case will then proceed to the requested hearing or trial.
Before deciding to settle any North Carolina workers’ compensation claim, an injured workers should carefully consider the likely need for future medical treatment and disability benefits. The injured worker should also consider the potential impact of the settlement agreement on other legal interests, such as private disability insurance benefits or other benefit plans, Social Security Disability benefits, Medicare, private health insurance plans, or other interests.
An experienced North Carolina workers’ compensation attorney can help the injured worker navigate the process of mediation and settlement. Please do not hesitate to contact our firm if you believe we may be of assistance to you!