1. What will mediation cost?
It is difficult, if not impossible, to answer that question honestly without the mediator first knowing a little bit about the case. This includes, but is not limited to: (i) How much/what is in dispute. (ii) How many parties are involved and who they are. (iii) What is the nature of the dispute. It is because of the mediator’s need to know a little about the matter that when contacting ADR, you will be asked to complete a basic case history form and will, at no cost, be required to consult, either by telephone or preferably in person, with the mediator. Both parties to the dispute must participate in the initial consult which will take 20 to 45 minutes. At the conclusion of the initial consultation, fees will be discussed and hopefully agreed upon. The general rule is that fees are charged on an hourly basis. The average hourly fee is presently $225 per hour. However, that fee may be subject to reduction in appropriate cases. Similarly, in complex or multi-party disputes, or when the parties request to meet after regular business hours, the fee is subject to an increase. Currently, there has been no fee charged in excess of $300 per hour. There is also the possibility that, in an appropriate case, a flat fee may, if requested, be agreed upon. The minimum flat fee for a (three hour) mediation is $600. This payment will also cover all services rendered prior to the first mediation session. Most flat fee cases are based upon the anticipation that only one mediation session (which will be limited to no more than 4 hours) will be required . If additional time is expended, additional fees will be incurred.
2. When is the fee payable?
After the fee is discussed and agreed upon, a retainer agreement will be prepared and signed by the parties and mediator. All flat fees and any and all retainer payments (against an hourly fee) are then due. No mediation session will be held without said payments being made. The retainer fee is generally equivalent to a minimum of two hours of hourly fee. Thereafter, on hourly fee cases, fees will be billed for time as it is expended.. In the unusual event that preparation time (i.e. time expended prior to a mediation session is held) exceeds two hours, then and in that event an additional retainer payment may be required. There is no fee for the time spent on the initial consultation, so long as it does not significantly exceed 45 minutes. All bills are payable upon presentation. If a bill is generated after a mediation session, no further sessions will be scheduled until that bill is paid in full. In a flat fee case, if the time expended significantly exceeds four hours but does not total an additional three hours, a bill for the additional time will be incurred at a per hour rate.. Every subsequent three hour mediation session shall be billed at a minimum of $500.00. Payment therefor is due prior to the mediations session. If less than Three hours is spent, the first hour or any part thereof will cost $200.00 and every subsequent hour, or part thereof, will be billed at $150.00.
3. How is the fee divided between the parties?
Again, the answer to the question depends upon the nature of case. If the case includes multiple claimants or multiple respondents (which by its nature will most likely make it an hourly fee case) and it is determined that the best course of action is to deal separately with the members of one group or the other, a mediation session may be scheduled for just that group. The members of that group will then be solely responsible for the fees billed for that session. The general rule is that the members will equally share the bill, but there are circumstances where that might prove inequitable (e.g. where solely as the result of one party’s inappropriate conduct time is spent which otherwise would not have been expended). When fees are not to be equally divided and this is known in advance, other arrangements will be made and agreed upon amongst the members of the group in advance of the mediation session.
The examples set forth above are however, the exception and not the rule. Generally, both sides will all attend a mediation session. Where there is only one or two parties on each side of the issue, the fee for the session (if it is not a flat fee case) will be divided equally with each side paying half. Again, there are circumstances where a 50-50 division of the feet might prove inequitable or otherwise untenable (e.g. where there are multiple parties on one side of the dispute and significantly fewer on the other side). In such event, other arrangements will be made and agreed upon by and between/among the parties in advance of the mediation session. In flat fee cases, one of the things that is decided when a flat fee is agreed upon is what each of the parties will contribute to the flat fee. For any number of reasons, the fee may not be equally divided.
One other scenario where there is not an equal division of the fee often occurs where one side strongly wishes to mediate, but the other is reluctant. In such instance, the party who has the strong desire to mediate, may as an inducement to the other party, offer to pay the initial retainer or a greater portion of a flat fee.
4. Do I need an attorney if I pursue mediation?
Once again, there is no clear cut answer to the question. Bear in mind that one of the reasons parties seek to mediate (especially in cases where the amount in dispute is relatively small), is to minimize costs. Thus, at first glance, it would seem that retaining counsel would be somewhat at cross purposes to seeking mediation. One thing to consider is whether the issues in dispute are primarily legal or business in nature. If the latter and you have experience in making business decisions and are confident in your ability to do so, the help provided by an attorney may not be particularly significant. Additionally, be aware that while the mediator will not advise you what to do, at ADR, the mediators are experienced attorneys, familiar with various facets of the law. As a result, the mediator may, during discussion with you, offer his/her opinion as to what the law provides and what is likely to happen in litigation if mediation should be unsuccessful. However, the mediator will not advise you what you should do, but rather will allow you to make a more knowledgeable decision. Yet, even in the foregoing scenario, remember the opinion provided by the mediator is just that; it is only one person’s opinion. The reason it may be offered may, in addition to providing information, also be designed to have a party re-consider and/or soften his position in order to move the dispute toward settlement. Thus, if you want legal independent advice, you certainly have the right to consult with and/or have counsel attend the mediation session with you. Indeed, if the other party is represented and you are not, then you may be at somewhat of a disadvantage.
5. Why should I mediate instead of just filing suit?
This question is addressed at length on the page entitled “Mediation vs. Litigation” (INSERT LINK) . Your attention is directed to that page. There is one possible exception to the general rule discussed on the aforesaid page. In the event that your dispute is one about money only and the amount of money in dispute is $3000 or less (or you are willing to waive any amount in excess of $3000), and if both parties to the dispute reside or work in New Jersey, then you may wish to consider availing yourself of filing an action in the Small Claims Division of the Special Civil Part of the Superior Court. There will be a filing fee of less than $30.00 and within weeks, your case will be placed on a calendar with as many as fifty or more other cases and assigned to a single Judge. That judge will attempt to have the parties resolve the dispute without a trial. To that end, he/she will initially assign the case to a law clerk (who is generally a newly admitted attorney with minimum experience). The clerk will attempt to mediate a resolution. If that does not prove successful, then at some time during the day (depending upon how many unresolved cases are listed ahead of yours), you will be given the opportunity to tell your story to the Judge and have your “day in Court”. Bear in mind, however, that your case may not be reached after you spend all day in Court. In such circumstances you will need to return to Court on another day. Also, when the case is heard, you will be restricted by the Court rules as to what you can say/present and what you need to prove. In addition, since yours will be but one of many cases that the Judge will be required to adjudicate that day, the time spent on the case will be relatively short even though the Judge, for the first time that day, will be provided any information about your case. Also, if you need witnesses to prove your case and they are not present in Court to testify, the Court will not accept written statements from them as evidence.
Thus, small claims may prove not be the ideal way to resolve your case. Having it mediated for a flat fee, although it may initially be more expensive, may well bring you a more satisfactory and expeditious result and may minimize the time you spend on the case.
6. What if both parties do not agree to mediate their dispute?
Except when ordered by the Court (which will happen in the vast majority of civil case that are filed in New Jersey)* mediation is voluntary. Thus, absent a Court Order, one cannot be forced to go to mediation. However, since it is likely that mediation will be ordered, in most instances it makes sense to agree to the other party’s request to mediate in advance of expending the time and money to reach the same place in litigation. (For a more detailed discussion of this subject see the page entitled “Mediation vs Litigation[B1] [B2] ”. (INSERT LINK ) If the mediation should, for some reason not prove successful, suit can always be instituted later (subject, of course, to potential statute of limitations and related defenses). Therefore, when parties to a dispute still maintain a civil speaking relationship, they should certainly consider submitting their dispute to voluntary mediation.
*Note – Various other cases in which litigation has been instituted, instead of being ordered to mediation, may be ordered to undergo non-binding arbitration .In such event, a third party (the arbitrator), NOT YOU, will decide how the dispute is to be resolved. . However, if either of the parties does not agree with the arbitrator’s decision, he/she may upon paying a fee of $200 within twenty days of the arbitration, have the case go on to a full trial. Unlike Court appointed mediators who are paid by the parties, Court appointed arbitrators are paid by the Court
7. What happens if/when after a case is settled in mediation, one of the parties does not comply with the terms of the settlement?
No mediator has enforcement powers. Such authority is granted to, and is wielded only by, the Court. Therefore, unfortunately, the answer to the question is that despite all efforts to avoid the costs (in time and money) of litigation, a Court action to enforce settlement will be required. That is the bad news. The good news is that the time required may well be relatively minimal and the costs incurred may be reimburseable to the aggrieved party.. A signed written settlement agreement constitutes a binding contract. Therefore, if the matter in dispute was the subject of litigation prior to having been mediated, the party damaged by the non-compliance will be able to, instead of starting again from the beginning, merely re-open the case and file a motion to enforce settlement and have the Court rule on the enforcement motion. It may sometimes do so without there even being a court appearance. It would probably be wise to consult counsel in regard to filing such a motion. If the dispute was not the subject of a prior court action, then a summary action for a declaratory judgment, may need to be pursued. However, as the name suggests, this is an action which is limited in time, scope and cost. Consultation with counsel in regard to such an action is definitely advisable.
However, at ADR, the mediator will attempt to incorporate into settlement agreement provisions which will encourage compliance. For example, to avoid a failure to comply by a party who has agreed to pay a sum of money, the mediator may suggest, subject to the parties’ agreement, that there be a provision that, in the event of a failure to comply, there be a provision in the settlement agreement that:
(i) the amount to be paid shall be increased to the full amount originally claimed due (or some other lesser, agreed upon, amount);
(ii) the amount be due and payable in full immediately (instead of in installments);
(iii) that the party due the money be specifically entitled to bring a summary action for the enforcement of the settlement agreement, and/or
(iv) the party who prevails in any such action be reimbursed his costs, reasonable attorneys fees and/or costs of mediation incurred in relation to the action and underlying dispute.
While these provisions do not guaranty compliance, they certainly make it expensive, and thus less likely, for one not to comply, thereby encouraging compliance.. If/when a successful motion to enforce settlement is brought, Judgment will be entered against the non-compliant party who will be subject to all legal rights and remedies ordinarily provided a judgment creditor.
If you have any other questions, please feel free to contact us at Affordable Dispute Resolution.
Telephone (201) 790-3553 or