Tuesday, January 9, 2018

Mediation Cost in Florida is Value

In Florida workers’ compensation most PFBs must be mediated before they may proceed to final hearing. In an effort to provide greater detail regarding mediation efforts of the OJCC, a Settlement and Mediation Statistics Report was first published in August 2010. The OJCC has published that report annually since. They are available at www.fljcc.org under the “Publications” and then “Reports” tabs.

The volume of State mediations held each year steadily decreased since 2002-03. Four exceptions have now been noted: 2008-09 (+3.95%), 2013-14 (+2.13%), 2015-16 (+1.83), and 2016-17 (+2.39). The volume of 2016-17 mediations remains significantly lower than in 2002-03. However, the overall rate of decrease in mediations does not match the rate of decrease in PFB filings over that period. This suggests that as PFB volume fell, OJCC mediators were able to act upon a greater percentage of the remaining volume, but the overall volume of mediations held nonetheless has decreased by almost half over the last fifteen years. 

In 2016-17, approximately sixteen thousand (16,079) mediations were held by state mediators, at an average cost of approximately $169.39, a minimal decrease from the 2015-16 figure of $173.45. The cost savings in recent years is due to the legislative action reducing the number of state mediators. The cost will adjust upwards unless the volume of mediations increases or the mediator positions again decrease. 

Many private mediators charge hourly rates well in excess of these figures, commonly two hundred fifty dollars ($250.00) per hour or more. Anecdotal evidence also supports that some private mediators charge minimum time commitment (such as a two-hour minimum) for all mediations convened. Therefore services comparable to those delivered by the OJCC mediators, from private mediators, would likely cost an average of approximately five hundred dollars ($500.00) or more. 

Thus, the cost-efficiency of State mediation is obvious, averaging about sixty-eight percent (67.7%) of the cost of one hour of private mediation. Notably, this cost is included in the overall OJCC budget. The overall cost per claim for the OJCC, including the mediation process, is far below the Circuit Court filing fees for other civil matters. Furthermore, if the volume of mediation increases, the cost of each mediation decreases, because the aggregate cost of the state mediation program remains constant regardless of volume, within reason. 

There are multiple issues that influence state mediation efficiency. The OJCC is compelled to mediate cases within 130 days of petition filing. However, there is also a statutory prohibition on noticing mediations until 40 days after the petition is filed. In giving notice of mediation, the OJCC must be conscious of the constraints of due process, that is, reasonable notice for mediation. 

It has become practice to strive to provide parties with 30 days’ notice of mediation. While some shorter notice period could fulfill constitutional requirements, attorneys, adjusters, and workers have schedules, and providing less notice could be calamitous on the ability to plan, and to effectively engage in productive mediation. Therefore, there is a 70 day period (40 days in statute, plus 30 days’ notice) excised from the 130 day mediation requirement. Effectively, the mediation process must occur within a 60 day  period or “window." 

History supports that a great many mediation appointments are cancelled by the parties. This may be because the claimed issues are resolved in some compromise, the benefits are outright provided as claimed, or that the claims are dismissed. Resolution is likely positive. But, when such resolution occurs within 30 days of the scheduled mediation, it may prove difficult for a state mediator to schedule some other case for that resulting vacancy. The shorter the notice of such cancellation, the more difficult it is to use that time effectively. Thus, the statistics reflect capacity to conduct more mediations, and history supports many more have been conducted in prior years. However, the late cancellation is affecting efficiency. 

As a direct consequence of efforts to comply with the 130 day statutory parameter, all of the State mediators have averaged below 130 days between PFB filing and first mediation in each of the last nine fiscal years (2008-09 through 2016-17). This represents 100% average statutory compliance by the OJCC state mediators in nine consecutive years. 

The statutory requirement to send cases to private mediation may have assisted with facilitating more timely mediations in recent years. However, the action of sending a case to private mediation imposes a significant cost to the particular E/C ordered to private mediation. 

It is important that the current filing volume situation is nearing system capacity. The OJCC needs to increase that capacity, or there will be an increase in the volume of cases being referred to private mediation at the expense of the employer/carrier. Those referrals will be precipitated despite the actual capacity to conduct more mediations, and the frustration of efficiency caused by late cancellation. 

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