Langham: Mediation Cost in Florida Is Value
Friday, January 12, 2018 | 699 | 0 | min read
In Florida workers’ compensation most petitions for benefits (PFBs) must be mediated before they proceed to final hearing. In an effort to provide greater detail regarding mediation efforts of the Office of the Judges of Compensation Claims, a Settlement and Mediation Statistics Report was first published in August 2010.
The OJCC has published this report annually since. It is available here under the "reports" tab.
The volume of state mediations held each year have 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 15 years.
In 2016-17, 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 upward 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 $250 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 $500 or more.
Thus, the cost-efficiency of state mediation is obvious, averaging about 67.7% of the cost for 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 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 canceled 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 that 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 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 employer/carrier 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.
David Langham is deputy chief judge of the Florida Office of Judges of Compensation Claims. This column is reprinted, with his permission, from his Florida Workers' Comp Adjudication blog.