One of the conundrums for us alternative dispute resolution folk is what to do when a party does not pay us for services performed. We tout the disadvantages of suing, but what other recourse do we have when a party breaches its contract to pay the mediator? It would be appropriate for us to mediate the fee dispute, but typically the non-paying party won’t return phonecalls or emails. That’s when litigation looks tempting, because it forces the defendant to pay attention to the matter.
I mediated an employment case two years ago, that resulted in the employee being re-hired. Since I knew the employee had a really good income, it was especially disconcerting to me that they refused to pay my mediation fee. I could not contact the employee directly, only their attorney, who promised to work on it but eventually quit responding to my emails, letters and phonecalls.
Some courts ensure that the mediator’s fee is paid before the lawsuit is dismissed, e.g., Grand Traverse, but Kent County Circuit Court does not. So I asked my peers what I should do. One of them told me that she had a similar situation, and she sent the invoice regularly for two years until she finally received payment. So I decided to do that. It felt futile, mailing off that invoice to the attorney month after month, but I wasn’t sure what else to do.
Lo and behold, I received an email from the employee last week about paying me, and the check arrived in the mail today—just a little over two years since we finished up the mediation.
In the meantime, I’ve changed my practice: I require a much larger deposit up-front, and I will call off the scheduled mediation if a party does not provide the deposit by the day of the mediation. It’s not just a trust issue; I think it’s actually fairer to the client to be clear about the cost of mediation, so they can factor that into their negotiations.
And when a party doesn’t pay, we mediators may have to use a little ADR ourselves.