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The American Equity Underwriters, Inc. The American Equity Underwriters, Inc.
Longshore Insider
Four Reasons to Solve Claims Disputes Through Mediation
Jan 13, 2020 - David Widener, The American Equity Underwriters, Inc.

There are times when claims-related disputes cannot be resolved informally and one or more of the parties may choose to proceed with formal adjudication. In the longshore arena, claims are adjudicated before the Office of Administrative Law Judges (OALJ) pursuant to the Administrative Procedure Act. In litigation before the OALJ, parties conduct formal discovery, which can include medical evaluations, depositions, written interrogatories, and other discovery requests. Upon completion of discovery, parties are granted a trial-like hearing with witness testimony, a written record, and a final decision. This process can be long, tedious, and costly to all parties.

Alternative dispute resolution processes – or more specifically (and more common) in longshore, mediations – provide an alternative to having an ALJ decide the outcome of the claim. The mediation process has several advantages to formal litigation, such as timeliness, control of the process, control of the outcome, and cost-effectiveness.


1. Timeliness

Formal litigation can be a long process. The OALJ is in control of docket scheduling and cases can be scheduled months into the future or deferred until a full docket can be set for the geographic region. On the other hand, mediations can be scheduled at the convenience of the parties. Combined with the wait to schedule a formal hearing, the final decision following a hearing can take several months to nearly a year to complete. In contrast, a case can be completely settled within days or weeks of a successful mediation.


2. Control of the process

Parties have more control over the mediation process. First and foremost, the parties have control over who mediates the case. The parties can choose a mediator that is the right fit for their case based on the facts surrounding the case, the personality or experience of the mediator, cost, geographical location, and so on. Private mediators are usually longshore attorneys with years of experience in this field. The OALJ also offers court-sponsored settlement judges who are ALJs with knowledge and experience in longshore matters and are trained in alternative dispute resolution techniques. Parties may choose an ALJ settlement judge for many different reasons including the cost, which is free.


3. Control of the outcome

Settlements are voluntary agreements entered into between the parties, so neither party can be forced into an unsatisfactory settlement. This is the only time during the litigation process in which each party has complete control over the outcome. Conversely, when a case is litigated before the OALJ, the outcome can possibly be predicted based on the facts of the case, but there is zero certainty on how an ALJ will view the facts and ultimately decide the outcome.


4. Cost-effectiveness

Finally, mediation can be a cost-effective way to resolve a case. As mentioned above, formal litigation requires formal discovery, which comes at a cost. These costs include attorneys, court reporters, doctors, copy services, private investigators, vocational, other expert witnesses, and so on. Mediations can be scheduled early in a case, before many of those litigation costs are incurred. Also, formal hearings are typically followed by written briefs, response briefs, and possible appeals which increase the legal costs. Longshore mediations are typically completed in one half to a full day, saving time and money.



David Widener joined AEU in 2019 as Director of Claims Advisory Services. Widener began his longshore career in 2003 with F.A. Richard/American Equity Risk Services, where he was a claims supervisor for eight years. He joined the U.S. Department of Labor as a claims examiner in 2011, and was promoted to District Director six months later, overseeing operations for the Houston District Office. David has a B.S. in finance from Louisiana State University and is a credentialed mediator for the state of Texas.

The opinions and comments expressed in this article are those of the authors and do not reflect the opinion of ALMA, AEU or Amwins. None of ALMA, AEU, Amwins or the authors are responsible for any inaccuracy of content or for any loss or damages incurred by any party as a result of reliance on information contained in this article. Content may not be published or reproduced without the written consent of the authors. Prior articles may not be updated for accuracy as pertinent information changes over time. The Longshore Insider is intended to provide general information about the industry and should not be construed as legal advice under any circumstances. For legal advice, please consult a licensed attorney.
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