Whether you’re involved in a business dispute, employment issue, family conflict, or a divorce, mediation can be a cost-effective alternative to litigation. By bringing parties together in a private setting, mediators facilitate negotiations between the parties to reach a mutually acceptable resolution. Ideally, the resolution also serves to preserve relationships and provide a framework for future problem-solving. Litigation often destroys relationships, and even a successful lawsuit can create an environment of hostility between the parties that could last for years.
Mediation costs are generally much less than civil litigation, but how much will the process cost you? The average cost of mediation is under $5000. This includes the fees charged by a mediator, which are typically charged on an hourly basis. However, it’s important to remember that these fees are generally only a fraction of the overall legal expenses for a case. For instance, a typical litigated case that settles in court will typically require exponentially more attorney fees, and the costs of experts, such as tax professionals or child specialists, can easily run into the tens of thousands of dollars.
While the hourly rate of a mediator may seem high, the time spent on mediation is significantly shorter than in litigation proceedings. Litigated cases can take months, if not years to settle. That’s why it can be so much cheaper to mediate than to go through the long and drawn-out litigation process.
Some factors that will affect the overall mediation costs include the type of conflict, complexity and location. Complexity will increase the cost of mediation because the mediator may need to seek advice from other outside experts, such as a retirement expert or business valuation professional. Location can increase the costs because the mediator will need to travel to different locations for mediation sessions, which will incur additional expenses.
In addition, the type of mediator will affect the overall costs of the case. Some mediators are attorneys, while others have advanced degrees in psychology or social work. Those with advanced degrees in their field tend to charge more than those without these degrees. Moreover, private mediators will charge more than those working for community based organizations or as part of a local law firm.
Some mediators will offer a flat fee for the entire mediation process, while others will use a billable hour. Most mediators will require a deposit up front, which is usually used to cover the costs of administrative services and familiarizing themselves with the case. Additionally, many mediators will ask for a percentage of the total mediation fees up-front as well. This helps to ensure that all parties are committed to the process. This deposit is usually refundable upon successful completion of the mediation. Ultimately, the most important factor is for each party to decide whether or not the cost of mediation is worth the investment in a healthy and productive relationship moving forward.