Mediation Is Not Case Evaluation   Before discussing the particulars of transformative mediation, the term “mediation” must be defined. Many people use the terms “mediation” and “case evaluation” interchangeably. While both processes are defined in the Michigan Court Rules, they are very separate and distinct processes. MCR Rule 2.403 defines case evaluation (which years earlier was known in the Court Rules as “mediation”), as the process in which parties present their cases to a three person evaluation panel. The panel in turn places a monetary figure on the case, which can then be accepted or rejected by the parties. A party rejecting the case evaluation runs the risk of paying sanctions to the other party based on the amount of the subsequent verdict.

What is Mediation?  Nearly ten years ago Michigan Court Rules 2.411 was adopted.  MCR 2.411 defines mediation as “a process in which a neutral third party facilitates communication between parties, assists in identifying issues, and helps explore solutions to promote a mutually acceptable settlement. A mediator has no authoritative decision-making power.” During mediation, the mediator facilitates the discussion by assisting parties in “peeling the onion” in order to get past the positions of the parties to identifying each party’s needs. The mediator actively works to assist parties in identifying areas of mutual agreement, building consensus on those points, and encouraging the parties to examine possible ways of resolving their dispute. At points in the mediation, the mediator may decide to separate the parties and talk to them individually. This is called a “caucus”. Unless otherwise agreed to by the caucusing party, everything discussed in the caucus remains confidential and is not shared with the other party. While the mediator has no authority to impose a resolution, the mediator actively works to get the parties to the point of resolution. In this type of mediation model, the mediator, while always remaining neutral, uses a number of tools in his/her tool bag to move the parties from point “A” to point “B”.

What is Transformative Mediation?  Transformative mediation is premised on the theory that individuals in conflict have an innate ability to resolve their own disputes provided they are empowered throughout the process and they recognize the other party’s needs, interests, values and points of view. Like the mediation process defined above, transformative mediation involves a third party neutral mediator. But unlike the mediation process described above, the mediator takes a less directive role in the mediation, allowing the parties to decide how the mediation process will proceed. Transformative mediation allows parties to openly discuss the issues they believe are important to their dispute in a manner that can “transform” their relationship. This open discussion often helps the parties recognize each other’s point of view. The parties, rather than the mediator, have the power to decide whether and how issues will be resolved. The parties also decide if and when they wish to have a caucus with the mediator. The mediator’s job is not to even the table, but to support the parties.

In transformative mediation the mediator listens to the parties, follows the conversation (not leads it), focuses on the interactions of the parties, and offers reflection and summarization to clarify what is being said by the other party. The ultimate goals for the mediator are to support the parties so they continue to have a sense of empowerment and also provide reflection of the conversation so that each party truly recognizes the dispute from the other party’s point of view. When party empowerment and recognition of the other’s point of view exist, the parties are able to resolve their dispute.

Does Transformative Mediation Work?  Absolutely! This form of mediation has been used by the United States Postal Service (REDRESS® – Resolve Employment Disputes Reach Equitable Solutions Swiftly) since 1994. Because the movement of mail through the postal service requires everyone to do his/her job with precision and in a timely manner, disputes and conflicts between postal workers can interfere with the movement of mail. As an approved mediator in the REDRESS program, I have been impressed with the interdependence of the postal workers in performing their jobs. In serving as a mediator I have also witnessed disputing parties resolve their issues and go back to the job, being more productive than prior to the dispute.

What Does the United States Postal Service Have in Common with the Health Care Setting?  Both environments require the workforce to work cooperatively and collaboratively to either deliver the mail or deliver quality health care. Delivering quality care is premised on each person in the chain of care doing their job, from the physician, to the other healthcare providers and support staff. These interdependent relationships can be disrupted if a conflict arises anywhere along the chain of care. Transformative mediation would be very useful in not only resolving the dispute, but re-establishing or redefining the relationship between the two disputing parties, so that the delivery of health care can again flow smoothly.

Examples of disputes that could be resolved through a transformative mediation process include:

– Disputes between management and the medical staff over program development

– Conflicts over reallocation of resources between units

– Medical staff and nursing unit “turf wars”

– Conflicts over work expectations between shifts on the nursing unit

– Dealing with disruptive personnel

– General conflicts arising out of “doing more with less”

– Workplace conflicts seen in non-healthcare settings

These are only a few examples of conflicts seen in the healthcare setting. Using the transformative mediation model is not only helpful in resolving the conflict, but assists in restoring or at least improving the communication between the disputants. Working in such an interdependent environment as healthcare, restoration of communication is imperative to the delivery of quality health care.

I began my legal career in an era when physicians and other healthcare providers were told when they had an adverse outcome, to “call your insurance company and to not talk to anyone except your defense counsel”. From the time the adverse event occurred, healthcare providers would put their guards up and would avoid discussions with patients, for fear that litigation would be initiated. Patients, on the other hand, had questions about what happened and felt shunned by their healthcare providers. A patient’s frustrations would lead to the inevitable and litigation would be initiated.

You often hear plaintiffs say “It’s not about the money”, or “I just want some answers”. Meanwhile, as the litigation drags on, the anger grows for these patients. As for healthcare professionals, they too experience frustration and anger for being sued, for having their professional care critiqued — and they may even start to second guess themselves. A standoff begins, and once in litigation, the parties never have the opportunity to have a dialogue.

Fortunately we have learned that “keeping it to oneself” is not the way to go. Over the last seven years, thirty-four states (not Michigan) have enacted “apology laws or court rules”, enabling healthcare providers and patients to have these much needed discussions without fear that such expressions would be used against them in a court of law. While the statutes vary, they all have the common goal of encouraging people to talk and express empathy for another person’s situation.

Apology laws are really a misnomer, as there are no apologies of wrongdoing, but rather expressions of empathy for the patient’s situation. Regardless of what you call it, studies show that when there is a sincere expression of empathy on the part of the healthcare provider, cases settle quicker and there is more satisfaction on the part of the plaintiffs with those settlements.

Personal injury and medical malpractice litigation will always involve a monetary component, which the parties’ attorneys are equipped to negotiate on behalf of their clients. But there is also the need to address the anger and sense of loss resulting from the plaintiff’s outcome. Plaintiff’s need emotional closure to what they have experienced. A monetary settlement alone will not bring this closure. The best way to facilitate both a monetary settlement and closure for the plaintiff (and in the case of a medical malpractice claim, for the healthcare provider as well) is to provide for dialogue between the parties. Mediation provides an avenue in which to accomplish this.

Mediation also provides a safe environment in which to obtain closure for the parties. Oftentimes, as a mediator, I hear one or both attorneys say that “this is only about the money”. And yet once the mediation begins, intertwined among the monetary discussion, we are addressing the patient’s anger and other non-monetary issues and emotions. Mediation is successful when the parties are able to not only express what they need, but also truly hear what is being said to them. Once that occurs, the parties have a fruitful discussion, and a connection is made. A connection that cannot be replicated in litigation.

Mediation and “apologies” or expressions of empathy go hand-in-hand. For a physician to say, “Mrs. Smith, I am sorry this happened”, is the first step in connecting with the emotions being felt by the patient. No matter how hardened a person may be, for the most part, they still have the ability to express empathy or forgiveness in the right setting. Finding the right setting is where mediation comes in.

Whether or not an expression of empathy should be offered in mediation is a discussion that should start with defense counsel’s assessment of the circumstances, facts, and evidentiary rules, since there are no “apology laws” in Michigan. An expression of empathy should only be initiated or suggested by the healthcare provider, not the mediator. But if defense counsel and client feel it is in order, they can discuss the pros and cons of going forward with the mediator in either a conference call prior to the mediation or during a private caucus during the mediation session. The mediator, without discussing confidences of the other side, can provide defense counsel and his client with some guidance as to whether the expression would be taken in the light it was intended. Saying you’re sorry may not be enough. For there to be true closure for both parties, a discussion about what happened (as guided by the needs of the parties) also needs to occur.

Disclosure: Oftentimes in mediation, patients want to know what happened and want some assurances the same outcome won’t happen to someone else. This calls for a candid discussion in mediation, under terms agreed upon by the parties. I recall one mediation in which the decedent’s family wanted to talk to the unit’s administrator before settling, and without attorneys present! The monetary aspects of the settlement had already been hammered out. The attorneys agreed to allow the parties to talk to one another, in the presence of the mediator. After forty-five minutes the door opened and the plaintiffs announced that they were ready to sign the settlement agreement. They were able to have their say and have their questions answered. The discussion was also valuable for the administrator, who learned how her staff and unit were perceived, which was not in a good light.

Apology vs. Admission of Guilt: Of course in Michigan, since there is no apology law, any expression or apology should be analyzed by defense counsel in terms of whether it will be perceived as an admission of guilt or an admission against the defendant’s interest. But there is a difference between admitting to liability and providing a true expression of sadness and empathy for the patient’s situation. Heartfelt empathy during mediation, from one human being to another, can be a powerful tool to diffuse and lower the anger of the plaintiff and/or family.

Sincerity: Every apology or expression of empathy must be sincere. If there is any chance an apology or expression of empathy will not come across as being sincere, it should not be attempted during a mediation. An insincere expression may be perceived as flippant or patronizing, and only make matters worse. Defense counsel must be the judge of whether her client is truly empathetic and capable of providing a sincere apology.

Closure: Plaintiff’s anger is always present to some degree in all litigation, but particularly in medical malpractice actions. Healthcare providers also feel angry about being sued and angry that their professional judgment was questioned. The mediator serves to identify anger and other emotions in both parties, and creates an atmosphere where a dialogue between the parties can take place. While the mediator is not a therapist, mediations can be very effective in giving the parties, particularly the plaintiff, a process to explore the facts, identify each party’s needs, including resolution of certain emotions, and facilitating the dialogue in the room. By participating in such a process, the parties at least have an opportunity to discuss what really matters to them and come to an emotional closure.

This article will be reprinted, with permission, in the February 8, 2010 edition of Michigan Lawyers Weekly.

In Moffett v. Life Care Centers of America, No. 08SC510 (Co. Nov. 16, 2009), the Colorado Supreme Court addressed the issue of whether an incapacitated patient is bound by an arbitration agreement, when executed by the patient’s power of attorney. The Supreme Court of Colorado ruled affirmatively in the Moffett case that the patient was bound by the fully executed arbitration agreement when signed by the patient’s power of attorney and the nursing home.

Facts: Dorothy Moffett suffered from Alzheimer’s disease and was admitted to Briarwood Life Care Centers, a nursing home. Her son was the power of attorney and medical durable power of attorney for his mother. Upon Mrs. Moffett’s admission to the nursing home, the son, acting as the power of attorney, signed among other admission papers, an arbitration agreement. After the patient died, a wrongful death action was filed against the nursing home. Briarwood moved to compel arbitration based on the agreement signed by the patient’s son. The trial court denied Briarwood’s motion.

The appeals court reversed, finding that a person holding a power of attorney for an incapacitated patient may lawfully sign an arbitration agreement, thus binding the patient to arbitrate any claims. The son appealed to the Colorado Supreme Court, arguing two alternative theories. First, he claimed the Health Care Availability Act (HCAA) prohibits an incapacitated patient from entering into an arbitration agreement, and therefore a power of attorney, acting on behalf of an incapacitated person may not enter into an arbitration agreement. Thus his execution of the arbitration agreement was invalid. In the alternative, the son also argued that the arbitration agreement was not valid because the nursing home unlawfully conditioned his mother’s admission on the requirement that her son sign the arbitration agreement. He claims that his mother’s admission to Briarwood was conditioned on execution of the arbitration agreement.

Holding: The Colorado Supreme Court struck down the Petitioner’s first argument and held that the HCAA does not prohibit a power of attorney from entering into an arbitration agreement on behalf of an incapacitated patient. As to the second issue, the Colorado Supreme Court ruled that the trial court must conduct an evidentiary hearing to resolve contested factual issues bearing on the validity of the arbitration agreement. In its opinion, the Supreme Court did not address whether the person holding a medical durable power of attorney is authorized to sign an arbitration agreement on behalf of an incapacitated person.

In Koricic v. Beverly Enterprises – Nebraska, Inc. No. S-09-1167 (Neb. Oct. 16, 2009), the Nebraska Supreme Court found that the patient’s son did not have authority to bind the patient to the nursing home’s arbitration agreement. The Supreme Court did find that the son had authority to sign admission documents, but declined to extend that authority to the optional arbitration agreement.

Facts: Since the patient did not speak or read English, her son, Frank Koricic, signed several of the admission documents, including the arbitration agreement. After the patient died, the son sued the nursing home, alleging negligence, breach of contract, and breach of fiduciary duty. The nursing home sought to compel arbitration, which was affirmed by the trial court. Mr. Koricic appealed, citing that he did not have the authority to sign the arbitration agreement. Although for some ten years the son signed medical documents on behalf of his mother, the Supreme Court held that in this case the arbitration agreement was different, as it was not a condition of the patient’s admission. The Supreme Court went on to note that there was no evidence to suggest the patient: (1) knew her son would be asked to sign an arbitration agreement; (2) represented to the nursing home employee that she authorized him to sign the arbitration agreement, or (3) later ratified the Agreement.

On September 27, 2009, the New York Times published an article indicating that Senate majority leader Harry Reid, according to aides, “will lean heavily on President Obama to arbitrate [emphasis added] a number of contentious issues that still threaten to divide liberal and centrist Democrats and derail a final bill.” The article went on to articulate Sen. Reid’s challenge to stitch together legislation that can win 60 votes to stop a Republican filibuster.

Putting aside political views over healthcare reform and the positions taken by Democrats and Republicans in this national debate, the fact that the Senate leader seeks to get President Obama, an interested party, to sit as an arbitrator, raises the issues of neutrality and impartiality. Even if the use of the word “arbitrator” was inadvertent or not as it was intended, this article may leave individuals confused regarding the use of arbitration to resolve disputes.

Any ADR practitioner will tell you that the fundamental qualifications of an arbitrator (and for that matter a mediator) are neutrality and impartiality. To assist disputing parties in resolving their issues, an arbitrator and mediator must be neutral, impartial, and not have an interest in the outcome of the dispute. This is why before an arbitrator and mediator hear a dispute, they must disclose to the parties applicable social and professional relationships with parties and witnesses, as well as the arbitrator or mediator’s personal involvement as a party in a similar dispute. At the end of the day the parties need to make the decision as to whether they feel the arbitrator or mediator can conduct himself/herself without a preconceived bias in favor or disfavor of a party. For arbitration and mediation to be successful, the arbitrator and mediator must be neutral, impartial, and not have an interest in the final outcome.

By anyone’s measure, President Obama is not in a position to be a neutral and impartial arbitrator to resolve the disputes facing the Democrats in this healthcare debate.

In this case, Community First Foundation sought to transfer its interest in Exempla Healthcare System to the Sisters of Charity of Leavenworth Health System, in exchange for a capital expenditure commitment and a separate payment to the Community First Foundation. The proposed transfer was opposed by Exempla’s board as well as various community groups and physicians organizations. Exempla filed suit to invalidate the transaction and the court compelled arbitration pursuant to the terms of the underlying affiliation agreements.

All of Exempla’s claims were denied by the arbitrator except for the claim that related to the transfer of Community First Foundation’s membership interest in Exempla Healthcare System to the Sisters of Charity of Leavenworth Health System. The arbitrator determined that the proposed transfer of Exempla assets was not a sale, and therefore, did not require board approval under Colorado’s nonprofit law. However, the arbitrator did find that the transfer of Community First Foundation’s membership interest in exchange for value in the Sisters of Charity of Leavenworth Health System violated the Colorado nonprofit law. The arbitrator ruled, “A transfer under Colorado’s nonprofit act cannot be for value since the member has no vested property rights in a membership, and a member has no equity interest in a charitable nonprofit corporation”.

Since arbitration awards are not public, it is impossible to determine the arbitrator’s rationale for his ruling. While the award is thought- provoking and has no legal precedence, it may be used in the future by parties wishing to challenge disaffiliation transactions involving nonprofit hospitals.

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Court Rules Son Had Authority to Bind Father to Nursing Home Arbitration Agreement

In the case of Triad Health Management of Georgia v. Johnson, No. A09A0286 (Ga. Ct. App. June 3, 2009), the Georgia appeals court reversed the trial court, finding that the nursing home’s admission agreement, which contained an arbitration clause signed by the son, was enforceable. The plaintiff, the nursing home resident’s son, sued Triad Health after his father developed sepsis and died. Triad Health moved to compel arbitration, but the motion was denied by the trial court. Triad Health appealed to Georgia’s appeals court.

The appeals court ruled the admission agreement, signed by the son as the father’s fiduciary and pursuant to a valid power of attorney, was binding and enforceable. Plaintiff’s argued that the agreement was unenforceable pursuant to Georgia statute, which provides that “no agreement to arbitrate shall be enforceable unless the agreement was made subsequent to the alleged malpractice”. In the ruling to enforce the admission agreement, the appeals court relied on the Federal Arbitration Act, ruling that it preempted Georgia statute. The court held that in so doing, the “liberal federal policy favoring arbitration agreements” should prevail.

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Biogen’s Right in Development of Rituxan is Upheld

Biogen Idec, Inc. and Genentech co-market the drug, Rituxan. Rituxan is currently used in the treatment of non-Hodgkin’s lymphoma and rheumatoid arthritis. Development of Rituxan for other medical conditions, such as multiple sclerosis, is ongoing. Genentech asserted that a merger between IDEC Pharmaceuticals Corp. and Biogen, Inc. resulted in a change of control and negated the collaboration agreement between Biogen and Genentech.

The arbitration panel rejected Genentech’s claim and reaffirmed Biogen’s right to participate in development of Rituxan for other medical conditions. The arbitration panel ruled that a joint committee, made up of three members of each company, must unanimously approve the development plan for each specific indication. In the event there was no unanimous approval by the joint committee, Genentech would not be allowed to proceed with further development for certain medical conditions.

In essence, the arbitration panel imposed an award that requires the joint committee members to work cooperatively and collaboratively in the development of Rituxan as a treatment option for additional medical conditions.

In the case of Hayes v. Oakridge Home, No. 2009—0784 (Ohio, May 7, 2009), the Ohio Supreme Court ruled that a nursing home arbitration agreement, voluntarily executed by a nursing home resident upon her admission and not as a precondition to admission, is not rendered procedurally unconscionable solely due to the resident’s age.  Furthermore, an arbitration agreement that waives the right to trial and the right to seek punitive damages and attorney fees is not substantially unconscionable.

Facts: The nursing home resident, a 95-year-old woman was voluntarily admitted to the Oakridge Home.  Upon admission she signed an arbitration agreement whereby she agreed to submit future malpractice claims against Oakridge to arbitration and waive her right to trial and her right to recover punitive damages and attorney fees. At the top of the arbitration agreement, in boldface capital letters, it indicated the arbitration agreement was a voluntary agreement.  Likewise, in the body of the arbitration agreement, it stated execution of the arbitration agreement was voluntary.  Finally, above the signature lines in boldface capital letters, it indicated the voluntariness of the consent.

Within the body of the arbitration agreement, the resident was advised that:

• Signing the arbitration agreement would constitute waiver of her right to a jury trial;
• Any arbitration award would not include any exemplary or punitive damages; and
• The resident had a right to consult with an attorney before signing;

The resident, Ms. Hayes, subsequently fell and sustained injuries while a resident of the Oakridge Home.  She initiated a lawsuit against Oakridge.  In response, Oakridge filed a motion to stay the proceedings, which was granted.

A divided court of appeals held that the arbitration agreement was both procedurally and substantively unconscionable because it took away Ms. Hayes’ right to attorney fees, punitive damages, and a jury trial.  The court of appeals also ruled that the arbitration agreement was procedurally unconscionable because Ms. Hayes was 95 years of age, with no business or contract experience, and Oakridge had all the bargaining power.

Oakridge appealed the court of appeals decision to the Ohio Supreme Court on two grounds: (1) whether a nursing home resident’s age can render an arbitration agreement executed by the resident procedurally unconscionable; and (2) whether an arbitration agreement that waives a nursing home resident’s right to trial and to recover punitive damages and attorney fees is substantially unconscionable.

The Ohio Supreme Court overturned the court of appeals, ruling in Oakridge’s favor based on:

• The court of appeals erroneously relied upon facts not in the record.  The only facts in evidence pertaining to the agreement being procedural unconscionable were Ms. Hayes’ age and the terms contained in the agreement she signed.  There was no evidence in the record regarding Ms. Hayes’ educational background, business acumen, or experience.  The Court went on to state that any single factor, like age, was generally insufficient to find an agreement procedurally unconscionable. Based on the lack of evidence, Ms. Hayes did not satisfy the burden of proof. 
• The terms of the arbitration agreement were not substantially unconscionable because such terms were commercially reasonable.  Waiver of punitive damages and attorney fees is equitable to both parties and is not one-sided.  The Court pointed out that Oakridge also waived its legal right to seek court costs and attorney fees. Waiver of a jury trial is a necessary consequence of agreeing to have an arbitrator decide a dispute. 

Congresswoman Linda Sanchez (D-CA) has introduced a bill (HR 1237) that, if passed, would invalidate pre-dispute arbitration agreements between long-term care facilities and residents. Rep. Sanchez supports the bill on the basis that “Arbitration agreements are often buried in overly complicated contracts, and many consumers do not realize they are waiving their legal options… [w]e have to protect families and seniors, and that includes giving them the tools they need to protect their full legal rights.”

The American Health Care Association and the National Center for Assisted Living oppose the bill, arguing that the “pre-dispute agreements bring timely, less adversarial settlements, help to prevent rising medical costs due to lawsuits, and allow staff to focus on patient care.

In a Florida Court of Appeals case (Gessa v. Manor Care of Fla., Inc., No. 2D07-192812 [Fla. Dist. Ct. App., January 30, 2009]), the Court upheld the trial court’s decision to enforce an arbitration agreement between a nursing home resident and the nursing home. Ms. Gessa through her legal representative sued Manor Care of Florida for alleged improper care. Upon admission, Ms. Gessa signed admission documents which included an arbitration agreement. There was a dispute as to whether the arbitration provision was unconscionable given the limitation of liability clause, which was also in the agreement. The trial court disagreed with Ms. Gessa, finding that the arbitration agreement was not procedurally unconscionable and that the limitation on liability provision could be severed from the agreement. The trial court ordered the parties to arbitration. The Florida Appeals Court, reviewing the trial court’s ruling, upheld the ruling to arbitrate the matter.

Mediation -
Lawyers and Doctors Make Strange Bedfellows

In Pennsylvania, the Montgomery County Medical Society and the Montgomery Bar Association have come together to launch a pilot mediation program. The program seeks to bring physicians, patients, and lawyers together in an effort to voluntarily resolve issues without the tensions and costs of litigation. The program came at the urging of Gov. Ed G. Rendell as a means of fending off rising medical liability claims and insurance rates, retaining doctors in the state, and encouraging hospitals to explore mediation to settle cases more efficiently.

Legal experts say mediation and other voluntary early intervention programs are attracting interest among plaintiffs and defendants as an alternative to the court system, particularly as tort reform efforts face ongoing challenges and the patient safety movement gains ground.

Proponents tout mediation not only because it saves time and money, but primarily because it encourages open dialogue between both sides. The two-step process begins with an informal meeting between the patient and members of hospital administration, as well as doctors or nurses trained in conflict resolution. Patients can seek legal counsel at any time during the process. If the patient is not satisfied with the outcome of the discussions, the issue can proceed to the second step of formal mediation. In the mediation phase, a trained physician-lawyer team helps both sides reach a mutual agreement. The physician typically will be in the appropriate specialty and can provide insight to the parties.
The proponents of the mediation project looked to the success of Rush University Medical Center’s mediation program when designing their program. Chicago’s Rush University started a mediation program in 1995. Since 2004, 95% of claims have been resolved through the process. Rush also uses a co-mediation model, with a team including a defense lawyer selected by the patient. Both sides in the case split the cost of the mediator. Rush University’s experience over the years has shown that the Hospital’s claims have remained stable.