Adv Jacques Joubert

Independent Mediation Analyst

Commercial Mediator

Woza Mediation South Africa Blog!

Mediation overcomes selective attention in the insurance industry...

Tuesday, 03 December 2013

Before turning to the specifics of Andre Visser (not his real name), a Fitter and Turner who woke up one morning to find he had lost sight in one of his eyes, a general perspective about mediation is necessary.

Commercial mediation may be defined as a without prejudice and confidential process during which parties explore options that are not available during adjudication by an Ombud or by a court. The exploration happens in the presence of a mediator who works equally hard for both parties.

Adjudication should always be available when parties are unable to reach settlement, but too often parties seek an adjudicated outcome when other, more sensible and creative outcomes are possible.

In a well aired advert, Ben Kingsley stands in front of a bar talking about general insurance, while the clothes of the bartender standing behind him changes four times. Due to ‘selective attention’, as it is referred to by neuroscientists, few people watching the advert notice this change in clothing. Selective attention may explain the single-minded approach often used to resolve disputes. When our attention locks onto an adjudicated outcome, we quickly lose sight of other possibilities. Mediation offers the promise of a multi-dimensional and cognitively more complex approach to problem solving, than adjudication by an Ombud or a court.

Back to the story of Andre Visser who is a 39 year old, employed Fitter and Turner, who wakes up one morning to discover he had lost sight in one of his eyes. The precision work required by his work makes it impossible for him to continue as a Fitter and Turner and Andre has a claim under his employer’s Group Scheme, underwritten by ABC Insurers, for a loss of income benefit reviewable every year. He also has a claim of R 3 million against ABC Insurers, under a personal policy for his total and permanent disability to work in his own occupation or another suitable occupation, taking into account his education, training, experience and other factors. His employer effectively dismisses Andre on the basis of his incapacity, and makes him ABC Insurer’s ‘problem – selective attention probably prevented the employer from applying his mind to the possibility of employing Andre in a different capacity.

Andre sits at home and becomes depressed waiting to hear about his claim for R 3 million, adding another layer of complexity to his already difficult situation. And then one day Andre receives a letter from ABC Insurers, repudiating his claim on the basis that he is still employable. Incensed he lodges a complaint with the Ombud.

ABC Insurers now runs the reputational, financial and precedent setting risk that the Ombud, will overturn the repudiation as wrong in law, or by exercising its equity jurisdiction.

Imagine if ABC Insurers’ letter, instead of repudiating Andre’s claim, invited him to first attend insurance mediation to consider all options. Imagine if a mediator, knowledgeable of the insurance industry, confidentially and without prejudice, explored options and ideas with Andre and ABC Insurers. Imagine if Andre is empowered by the experience of being heard and does not see himself as a victim of ABC Insurers. Perhaps he starts thinking about starting his own business and ABC Insurers considers making an ex gratia payment as seed capital for his business. The mediator may also suggest inviting the employer to the mediation to consider employing Andre in a different capacity, an outcome that no doubt, would interest ABC Insurers.

This illustrates how mediation overcomes selective attention and helps generate a range of options unavailable during adjudication.

The time is ripe for the insurance industry to apply the King 111 principle in favour of mediation and to launch a mediation initiative for the industry.

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