| Case Name: | RECENT DEVELOPMENTS CONCERNING MEDIATIONS IN SOUTHERN CALIFORNIA CONSTRUCTION DEFECT CASES |
| Date: | Friday, June 03, 2005 |
We recently attended a mediation in a construction defect action at Hart ADR in Los Angeles. At the mediation, a number of carrier representatives were available by telephone or absent altogether. In the past, having carriers available by telephone has not been an issue. However, the lack of personal attendance by carrier representatives at this mediation resulted in Developer’s counsel filing a motion for sanctions with the Court.
The Court heard arguments regarding whether sanctions should be imposed at a status conference our firm attended. Although our firm and carrier were not exposed to any sanctions, we remained in Court to find out how the trial judge would handle the request.
The trial judge issued sanctions of $750.00, jointly and severally, to any law firm and insurance company that failed to have a carrier representative personally present at the mediation. This included sanction orders directed at CIGA and out of state carriers.
We believe the type of sanction request made by Developer’s counsel in this case will become more common in the future.
The reason is that most, if not all, Case Management Orders being implemented in Southern California now contain a provision ordering all mediations be deemed “Mandatory Settlement Conferences” subject to the code provisions requiring personal attendance of attorneys, clients, and carrier representatives with full settlement authority.
Due to the language we are seeing in Case Management Orders, and the sanctions being imposed against law firms and carriers for failing to abide by the terms of the orders, we recommend that you treat all mediation dates as if they are Mandatory Settlement Conferences with the Court. We will, of course, continue to provide you with all mediation dates as soon as they become known and in time to allow for the personal attendance of a carrier representative.
If you have any questions about the contents of this correspondence, or would like more information regarding the recent issuance of sanctions as described above, please feel free to contact us.