The Closer

A Mediation Newsletter July 2013

Mediation Fees
by James Rainwater

As a mediator, I am accustomed to grappling with ambiguity and hearing statements that do not seem to make much sense. All of this is part and partial of the mediation process. From a hazy and unformed mass comes clarity to formulate a coherent settlement. What should be cut and dried is the schedule of fees charged to the parties being mediated. Of course, some attorneys shop around for a low-cost mediator, and many judges know the approximate fee structure for various mediators in the area. However, some mediators have the practice of charging only one party.

My first thought was, How is this possible, to receive payment from just one side? To be honest, I do not know how wide-spread this practice is - locally, state-wide, or nationally. I do know that I have heard of more than a few instances occurring, and the only-one-side-pays practice also occurs in the arbitration field. This system of recompense calls into question how truly neutral the neutral can be.

Certainly, mediators have the discretion to charge what they want, with little oversight unless the mediator is court-appointed. And in certain cases, the mediator may take a reduced fee from one side where a real financial hardship exists, and the reduced fee enables the settlement process to continue. However, I often hear judges at the ADR docket admonish counsel that each party must share in the cost of mediation. All parties need to have a stake in order for mediation to be fully effective.

According to the American Bar Association's Model Standards of Conduct for Mediators (approved August 9, 2005): "While a mediator may accept unequal fee payments from the parties, a mediator should not allow such a fee arrangement to adversely impact the mediator's ability to conduct a mediation in an impartial manner." (Standard VIII, B. 2) My interpretation of this Standard allows for some fee flexibility but not the custom of out-right fee waiver for every plaintiff brought to mediation (or defendant, depending on the nature of the suit).

While most attorneys seek ways to reduce costs for the client, the elephant in the room has a question: If the mediator only charges one side, does that present any conflict of interest? If the mediator routinely takes payment from one particular kind of defendant while not charging the plaintiff, over the course of repeated scenarios, does that mediator have the potential to favor - intentionally or subconsciously - the fee-paying defendant? That is a question only attorneys can answer themselves the next time they choose a qualified neutral to mediate their matter.

Rainwater Law