Top Ten Practices for Successful Remote Mediations

Emily_Bonds_390_4x5Emily Sides Bonds
Partner, Jones Walker LLP

Emily represents agents and brokers, directors and officers, other professionals, and business entities in professional liability, products liability, mass tort, class action, banking and financial services, insurance coverage, and other commercial litigation. Her practice extends to all state and federal courts in Alabama and Mississippi. In addition, Emily is a trained mediator and arbitrator.

Life has changed in the last few months. New words have made their way into our dictionaries: Covidiot (someone ignoring public health advice), covideo (online parties on Zoom), the “rona” (Coronavirus), and covexit (strategy for exiting the lockdown). Social distancing was apparently an established phrase, but I had never heard of it.

COVID-19 has significantly altered the way in which witness interviews, depositions, mediations, and even trials are being conducted. We are forced to handle tasks virtually or remotely instead of in-person as we have done in the past. To say the least, this unprecedented, unpredictable, and ever-changing time demands that we examine and understand how to participate in and be on top of our game when conducting discovery, mediations, and trials remotely.

The current state of this pandemic will demand remote mediations for the near future. However, I anticipate that remote mediations will continue even after the pandemic has subsided. If done successfully, participants will want to continue this practice for the efficiency and cost savings that it brings to the litigation process. Of course, the opposite is true: if participants to remote mediations have a bad experience, they will be less likely to want to continue the practice once COVID-19 cases decrease.

I am Emily Bonds, a litigator and mediator licensed in Alabama and Mississippi. This post contains my “Top Ten” list for successful remote mediations.

#1:       Confirm with Mediator/Attorneys how Participants Will Appear at the Mediation

Nothing gets a mediation off on the wrong foot like the opposing side believing that a party or insurance representative will appear in-person, only to find out that the person is only available by phone and possibly for a limited time period. Make sure your side confirms how each attorney, party, and insurance representative will appear. Do not depend on the mediator to begin this discussion; instead, make sure your attorney confirms and manages the opposing side’s expectations for attendance.

#2:       Pre-session with the Mediator is a Must

With a remote mediation, it is tempting to just show up and let it all work out. This follows typical mediation practice. Lawyers draft and forward position statements, mediators review those statements the night before the mediation, and everyone shows up without knowledge that there is a roadblock to a successful resolution. Make sure that your attorney has talked with the mediator about the upcoming mediation and not just through a last-minute position statement. I have found that a pre-mediation session is the most over-looked and under-used tool in trying to get cases resolved. Your lawyer could suggest a pre-mediation meeting with the mediator via Zoom. The mediator should make the same suggestion. If no one does it, then you make the suggestion. It is an easy way to begin the building blocks to a successful mediation.

#3:       Schedule a “Dry Run” with the Attorney and Party/Insured

If this is your first time utilizing Zoom or another virtual meeting service, take the time to request that you and the attorney conduct a “dry run” of the process. This may be more important for the party/insured who is likely to be less familiar with the mediation process itself. Misunderstandings and confusion can be avoided by simply trying it out beforehand so everyone is on the same page.

Also, you may need a plan for how to communicate with each other in the event that you are unsure if your discussions are confidential. Make sure all participants on your side have each other’s cell phone number.

#4:       Be knowledgeable as to how Zoom Works

Most of us had never even heard of Zoom before March. Now, we have to know the ins and outs of it in order to have a successful mediation. Most law firms and insurance companies are conducting training on how to work Zoom and how to effectively participate in it. Take advantage of the resources available to you.

The remote mediation will likely be hosted by the mediator. The mediator can put each side into a waiting room and then caucus back and forth between the parties. Make sure that you discuss with the mediator that he/she will announce his/her appearance into a waiting room to which you are a part. Because you may have some uncertainty about the confidentiality of your waiting room, I would be careful as to any comments that may be deemed derogatory to the opposing side or the opposing side’s case or claims. A colleague of mine recently shared with me an experience in attending a remote mediation. The mediator forgot that he was in the waiting room with my colleague and his client. The mediator made a derogatory remark about the client. That one event made my colleague and his client completely distrust the process. The mediation was not successful.

#5:       Make Sure the Remote Mediation has your Full Attention

Some insurance representatives are double booking their remote mediations. I get it. There’s a lot of downtime during a mediation and we all want to be efficient.  I advise against this! You will be distracted and likely with too much on your mind to effectively hear the positions being taken by the opposing side, the mediator, and even your attorney. Also, avoid half-way participating in the mediation by checking email or surfing the web. While it may appear that multi-tasking is effective, it actually may increase the time you spend at the remote mediation because facts and strategies had to be repeated to you while you were in the midst of checking your email.

#6:       Sharing your Screen can be an Effective Tool

Zoom has an awesome feature that allows a participant to share his/her screen. Your case may have a complicated damages calculation or your attorney may want to share the points of the summary judgment motion with the mediator or the opposing parties. Think outside the box with your attorney as to what will be most effective way to present your side of the case at the mediation.

#7:       Observe Proper Etiquette

Check your computer or phone camera to make sure it is smudge-free before joining the mediation. Make sure your appearance is professional. Do not wear clothing that is the same color as your background because it will cause you to fade out. Mute your audio when you are not talking. If you do not have an office, then use earbuds or a headset to avoid background noise and maintain confidentiality.

#8:       Check your Lighting and Background

If your law firm or insurance company has a professional virtual background, then I would use that. I would not use an alternate background, such as a beach, which looks unprofessional. I actually had this happen in a hearing where my client was participating. All of the participants appeared as if they were in their office. My client looked like he was on the beach in Tahiti. This is probably not the image you want to portray. The use of a background is something you, your attorney, and the party/insured can discuss during your “dry-run” mediation.

#9:       Don’t be too Close to the Camera or have it Below You

This tip is self-explanatory. If you are too close to the camera then you are not portrayed professionally. If the camera is below you then the other participants can see up your nose!

#10:     Make Sure You have a Sufficient Internet Connection.

Last, but not least, make sure you have a sufficient internet connection. If you are working remotely and your home internet is spotty, you may need to visit the office for the mediation. Mediations conducted remotely can really go downhill when the opposing side has to wait for the other side to figure out their internet issues. This can be avoided by a dry-run mediation.

Remote mediations are here at least for the short-term, and my prediction is that they will be here in some form or fashion even after COVID-19 is under control. A remote mediation is an effective and efficient tool, but it must be managed appropriately. Expectations must be managed for how participation will occur. Participants must be educated and well-versed on whatever system is used to conduct the remote mediation. Following the tips listed here will give you a leg up on this process and hopefully make the remote mediation successful.

All this being said, I hope that in-person mediations never go away completely. There are many cases where the lawyers and insurance company representatives need to be present to judge the credibility of a witness, to size up the opposing counsel, or simply to set the tone that the defendants are serious about resolving the case.

Good luck with your remote mediations and please feel free to email me at ebonds@joneswalker.com. I would love to hear your stories and other tips on remote mediations.

D&O Perspectives on Coronavirus: Part 4

Join Kevin LaCroix, Carl Metzger, and Rob Yellen for Part 4 of their discussion on D&O Perspectives on Coronavirus. These speakers continue to look at possible effects of COVID-19 from a variety of D&O perspectives. This recording is part of the ongoing PLUS series PL Perspectives on Coronavirus—past recordings are here on the PLUS Blog, and stay tuned for more discussions to be posted in the coming weeks.

Listen here to D&O Perspectives on Coronavirus, Part 4:

Speakers:

KevinLaCroix2019Kevin LaCroix, Executive Vice President at RT ProExec

Kevin LaCroix is an Executive Vice President at RT ProExec, Beachwood, Ohio, a division of R-T Specialty, LLC. RT ProExec is an insurance intermediary focused exclusively on management liability issues. Kevin is also the author of the Internet weblog, The D&O Diary, which the New York Times called “influential” and the Wall Street Journal described as “widely followed.” Kevin has been involved in directors’ and officers’ liability insurance issues for more than 35 years.

Metzger_E_CarlCarl Metzger, Partner and Chair of Risk Management & Insurance at Goodwin Proctor

Carl Metzger is a partner in Goodwin’s Financial Industry and Business Litigation practices and Chair of the firm’s Risk Management & Insurance practice and Chair of the firm’s Partnership Committee. His clients include both public and private companies, major insurance carriers and brokerages, private equity and venture capital firms and non-profit and educational institutions. 

Rob YellenRob Yellen, Executive Vice President, D&O and Fiduciary Liability Product Leader, FINEX at Willis Towers Watson

With over 28 years of Financial Lines industry experience, Rob Yellen is a respected leader in the management and professional liability space. He currently works with Willis Towers Watson, FINEX NA brokers and claims advocates to identify and track developments in risk, coverage and markets, and with our business partners to develop innovative, best-in-class strategies and solutions. Rob joined Willis Towers Watson in 2015 from AIG where, during his 14-year tenure, he served in several key leadership roles–including Chief Underwriting Officer, Financial Lines, U.S. and Canada and, most recently, Head of Product Development for Financial Lines–globally and for the Americas Region.

Risk Associated with Latest Changes to Same Day ACH

Kurt.SuhsKurtis Suhs
Founder and Managing Director, Cyber Special Ops, LLC

Mr. Suhs serves as the Founder and Managing Director for Cyber Special Ops, LLC,  a cyber risk company that provides its clients with Concierge Cyber®, a revolutionary new delivery solution for cyber risk services modeled on concierge medicine.

The National Automated Clearing House Association (“NACHA”) is making enhancements to offer same day ACH more quickly, allow for larger per-transaction value, and add an additional processing window later in the day.  Here is a brief timeline and explanation of those changes:

  • March 20, 2019– the availability of funds for many Same Day ACH and other ACH credits will occur sooner in the day.
  • March 20, 2020– the per-transaction dollar limit for Same Day ACH will increase from $25,000 to $100,000.
  • March 19, 2021– access will be extended by enabling Same Day ACH transactions to be submitted to the ACH Network two hours later every business day.

So why is wire fraud expected to increase?  Why will it go up when banks are essentially providing the same service to customers that they do today, only giving them their money sooner? Well, the answer is because bad guys love speed and convenience. Same day ACH will enable fraudsters to abscond with money before the bank or its corporate customer even discovers the fraud.

Business Email Compromise Will Increase

In 2019, the FBI’s Internet Crime Compliant Center (IC3) received 23,775 Business Email Compromise (BEC) complaints with adjusted losses of over $1.7 billion. BEC is a sophisticated scam targeting both businesses and individuals performing a transfer of funds. The scam is frequently carried out when a subject compromises legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds.

Account Takeover Will Increase

It is no secret that fraudsters are stockpiling online banking credentials in what we often refer to as “sleeper fraud,” where they keep accounts on hand until they are ready to attack the bank en masse. After same day ACH, we can expect to see escalated levels of account takeover since fraudsters can move the money in larger and faster quantities on compromised accounts.

 Online Banking Losses Will Increase

If you want to see what will happen to U.S. online banking accounts, just look to the U.K. for the most likely scenario.  Online banking losses in the U.K. doubled immediately after Faster Payments launched and never really came back down to the pre-Faster Pay levels afterwards.

Payment Fraud and Bill Pay Losses Will Increase

Organizations that track their ACH and Bill Pay Fraud losses, will probably notice a big uptick in Bill Pay-related fraud losses.  Fraudsters can set up new payees and send funds, or even divert funds to new locations using the same payee accounts by changing the details.  Bill Pay losses will increase with same day ACH.

Time is of Essence

Upon discovering wire fraud, organizations should file a suspicious activity report (SAR) to the FBI’s Internet Crime Complaint Center (IC3).  The mission of the IC3 is to provide the public with a reliable and convenience reporting mechanism to submit information to the FBI concerning suspected internet-facilitated criminal activity and to develop effective alliances with law enforcement and industry partners. Information is analyzed and disseminated for investigative and intelligence purposes to law enforcement and for public awareness. Since the establishment in February 2018, IC3 established the Recovery Asset Team (RAT) that has helped streamline communication with financial institutions and assist FBI field offices in the recovery of funds for businesses that report a fraudulent domestic wire transfer. The RAT, which was established as a standalone team in 2018, completed its first full year of operation in 2019, assisting in the recovery of over $300 million lost through online scams, for a 79% return rate of reported losses. Time is critical, typically within 48 hours of the transfer request, when dealing with BEC, so the RAT can communicate with the domestic financial institutions to freeze funds before they have been transferred.

Best Practices to Minimize Wire Transfer Loss

  • Always verify the authenticity of each wire transfer request. Call the person, using a number you have previously called — not one from the current wire transfer request — to verbally verify it.
  • Implement a call-back verification process when setting up payment instructions for a new vendor or making changes to payment instructions for an existing vendor.
  • Implement dual control and segregation of duties.
  • Set prudent wire transfer limits and/or outright prohibit the ability to initiate overseas wire transfers
  • Educate your employees to protect your financial assets.
  • Perform internal audits to ensure controls set up are being followed.
  • Develop adequate policies and procedures.

Review your business insurance policy. Does it cover financial losses due to theft of money? Coverage might be found in a Crime Policy with a Computer and Funds Transfer Fraud Insuring Agreement, a Business Owner’s Policy that provides coverage for Theft of Money and Securities or a Cyber Policy with Social Engineering Coverage.