Filed Under:Claims, Litigation

Opinion: The Benefits of Mediation

Avoiding the Costs and Hassles of Litigation

Conflicts and disputes are normal in day-to-day business dealings with policyholders, colleagues, and contractors. Generally, we are able to resolve these problems using everyday communication skills and diplomacy. Occasionally, however, these disputes rise to the level where they seriously undermine our ability to maintain these important relationships.

This is where mediation can be a real benefit. Unlike litigation where a judge makes a decision about the outcome of a given dispute, mediation offers the parties the opportunity to control their own fate by crafting a unique solution. Ideally, solutions are developed that benefit both parties.

Calls to the restoration firm yielded only feeble excuses, although it was clear that its owner had been aware of the problems before the policyholder started complaining. This was the point at which many insurers would have elected to cut off a favored supplier relationship with the contractor. Instead, mediation was arranged between the owner of the cleanup company and a representative of the insurance company. Once the groups were able to sit down face-to-face with the help of a trained mediator, both the insurer and the restoration firm decided that the relationship was in fact worth saving.

The small restoration firm could not afford to lose this major client, and the insurance company needed a reliable supplier in that particular market. The involved parties were able to reach a deal that mandated a substantial refund for the condominium project. In addition, the contractor agreed to pay the vet bills and issue an apology to the cat owner. The cleanup company agreed to educate its workers about providing an appropriate level of customer service and professional decorum. In return, the insurer agreed that it would continue assigning the restoration firm cases. In fact, a new claim had just been filed, and the insurer agreed to assign it to the contractor. The groups also decided to keep the lines of communication open so that when problems arise in the future—as they invariably will—then the issues can be addressed and resolved without harming the delicate relationship.

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