During the second morning session at the PLUS D&O Symposium, the panelists discussed the role of mediation in D&O claims resolution and the kinds of recurring issues that arise in the mediation context, as well as the best ways that these problems can be avoided or overcome. Of note, the panelists discussed the following:
- Over the years, the mediation process has changed and become more complex.
- Now the industry sees claims that involve class actions, derivative actions, ERISA actions as well as opt-outs, all of which impact the amount of available insurance proceeds.
- Institutional plaintiffs now play an active role in cases, often seeking larger settlements and corporate governance changes which can be costly.
- There is often a significant amount of tension between numerous parties. Besides tension between the plaintiff and insured defendant, there can be tension between the insured and its insurers as well as amongst the insurers on the tower themselves.
- The increase in the number of insured entities who have filed for bankruptcy or who have become insolvent also complicates matters, especially where officers and directors are named as defendants and the company can no longer indemnify them. One panelist noted that they have seen an increase in insureds looking to their Side-A policy for coverage.
- The panelists all seemed to agree that better planning before the mediation, including increased communication between the parties involved in a mediation, will ensure a more productive mediation.
- The panel also suggested that brokers should continue to educate their clients, the insureds, as to what is covered under the insured's insurance policies and what limitations exist.
- Finally, the panel also discussed the benefit of having some cases tried to verdict - case law helps us learn what truly is a good case and what the potential risk of trying a case could be.