How useful is mediation in the worst natural disaster to ever hit the United States? In this AP article, it shows how mediation is playing a role in letting people go forward with their lives….
Mediation of Katrina cases ordered
10/26/2006, 12:48 p.m. ET
By MICHAEL KUNZELMAN
The Associated Press
GULFPORT, Miss. (AP) — David Rideout braced for a grueling court battle when he sued Allstate Insurance Co. for denying his claim after Hurricane Katrina destroyed his home on the Mississippi Gulf Coast.
To his surprise, all it took was two hours behind closed doors for both sides to work out their differences without a trial. Rideout says the agreement should enable him to pay for rebuilding the home.
Rideout was one of the first participants in an experimental mediation program designed to ease the crushing load of lawsuits spawned by last year’s epic storm, which damaged or destroyed more than 250,000 homes in Louisiana and Mississippi.
With hundreds of Katrina lawsuits clogging his docket, U.S. District Judge L.T. Senter Jr. has ordered several dozen plaintiffs and their insurers to sit down with a mediator and try to resolve their differences, or face “appropriate sanctions.”
Settlements were reached in seven of the first 17 cases to go to mediation, including Rideout’s two weeks ago. Encouraged by those results, Senter last week ordered mediation for 57 more cases.
Senter, who presided over the first trial of a Katrina insurance claim, sided with insurance companies in that case when he ruled in August that standard homeowner’s policies cover damage from wind but not rising water. Insurers have refused to pay for billions of dollars in damage from Katrina’s wind-driven storm surge.
The next batch of trials is scheduled to start early next year, with several judges from other districts joining Senter in presiding over the cases. In the meantime, Senter has solicited advice from attorneys on the best way to resolve hundreds of these cases in a “just, speedy and inexpensive” manner.
Chip Merlin, whose Tampa, Fla.-based Merlin Law Group has had more than two dozen Katrina cases ordered into mediation, said the process can only help his clients get the money they deserve.
“Our clients want to get on with their lives, get their businesses back in business and get their homes rebuilt,” Merlin said. “They don’t want this to drag out.”
Other attorneys are not as supportive. Richard “Dickie” Scruggs, whose legal team is suing insurers on behalf of hundreds of policyholders, has urged Senter to try cases in groups instead of individually. Mediation “has no teeth in it,” he added.
“If they were going to pay these claims,” Scruggs said of insurers, “they would have done it already.”
Many homeowners who are locked in disputes with their insurers but have not sued have agreed to mediation through a program sponsored by Mississippi’s insurance commissioner. As of Oct. 16, 82 percent of those voluntary 3,372 mediation cases have resulted in settlements, according to the commissioner’s office.
Insurance companies appear to support the process.
An Allstate spokesman said mediation is “less adversarial, time-consuming and costly than litigation.” A spokesman for State Farm Insurance Co. called it a “rapid approach to reaching mutual agreement.”
Rideout, 50, said he was prepared to “go all the way” and wait months for his case to be tried, but he is grateful for the chance to move on with his life.
“It was less emotional than I expected,” he said of the negotiations, which were held at a federal courthouse in Gulfport. “It was strictly dollars and cents.”