Friday, December 01, 2006

Who Pays for Mediation?

Answer: It depends on who has the money and what is fair for the parties.

In a civil case such as an employment dispute or personal injury case, the parties must agree to some type of allocation of the mediation fees up front. This is because the fees must be paid at least 1-2 weeks before the full day or half day mediation that has been scheduled.

Such an allocation is often a straight 50/50 split of the fees. However, I often see other arrangements such as 40/60 or 30/70 cost sharing as well as one side agreeing to pay for the full cost of mediation. These alternate cost sharing arrangements frequently make sense where one party simply does not have the same finances available to pay for mediation (for example because they were fired from their job which is the subject of the mediation). Such an arrangement might make sense to the party with the funds who does not want the other party's lack of money to be a reason for not settling the case through mediation.

In civil cases, it is not uncommon for the parties to include reimbursement of one party's share of the mediation costs in the terms of the settlement agreement, along with other litigation costs which may have been incurred before the case settled in mediation.

Just as in civil cases, who should pay for mediation is often one of the issues to be resolved in family or divorce mediations as well. But in a family mediation, the parties generally do not pay until the day of mediation, and frequently not until the end of each session.

Because family mediations typically extend between 2 and 6 half day sessions (unlike civil mediations), I often see parties with relatively equal finances alternating the payments between them. For example, Husband pays for the first session, Wife pays for the second, etc. Where the parties have unequal finances, it is often seen as fair by the parties for the party who earns much more than the other person to pay for the full costs of mediation. This is because, just as in the civil case, the party with more money is able to see the benefits of mediation versus the alternative, and is willing to pay for that benefit instead of lose the opportunity for an amicable settlement.

1 comment:

trevor said...

Thank you for posting this. How do you find these cases? I am fine with and understand that, by being pro-active you can (in a way) train the clients, which will also help them understand why they are paying for the mediation before it takes place. But how do you find these clients? (How do you take in phone calls and stay a neutral party?)
Thank you for your time and professionalism.
Trevor Meyer 949-282-7153