I have been asked lot recently about the costs of mediation. By costs people mean:
- the fees parties pay their own lawyers for preparation and attending (profit costs); and
- the fee they pay the mediator (disbursement).
Lawyers and their clients want to know:
- Who pays the mediator’s fee?
- How much does it cost?
- What happens if mediation fails?
Who pays the mediator’s fee?
The usual arrangement is that both sides pay half of the fee. The fee is paid in advance to avoid the mediator having any potential interest in the outcome of the matter. The parties are free to agree a different arrangement if they wish. Commonly in personal injury mediation where liability has been admitted the defendant will offer to pay the whole fee.
The fees of the legal advisers are paid by each side in the usual way. However the mediation may result in an agreement by one side to pay the other side’s fees. If there is no such agreement you are bound by the terms of the mediation agreement so it is essential you check that and raise any queries with the mediator before hand.
How much does it cost?
I charge £500 per party plus VAT for a 4 hour personal injury mediation. This includes travel and preparation. If the matter runs over 4 hours there is an extra fee of £85 plus VAT per party for each additional hour. My fee is roughly based on the hourly rates for partner level solicitors.
Each party in addition will be responsible for the fees of its solicitors (and barristers if also instructed).
What if mediation fails?
If no settlement is reached the responsibility for paying the mediator’s fees and the legal representatives fees will be governed by whatever the mediation agreement says. It is therefore essential – as with any legal contract – that you understand the provisions of the agreement before you sign it. Usually each party will pay it’s own costs and half of the mediator’s fee. Depending on the agreement this may be recoverable from the other side if you succeed with the claim.
