Are court-appointed mediators underpaid and overcharging?

Though I greatly enjoy doing mediation work, there’s a reason I haven’t tried to make mediation a significant part of my legal practice: South Carolina’s Alternative Dispute Resolution Rules under compensate court-appointed mediators.

South Carolina Alternative Dispute Resolution Rule 9 sets the compensation of mediators.  Under ADR Rule 9(b), a court-appointed mediator can only charge $175.00 per hour.  That mediator cannot charge for travel.  That mediator can only charge for one hour of preparation time.  If the mediation is cancelled, the mediator can only charge $175.00.  If a party is indigent, that party may seek to be exempted from the payment of mediator fees.  ADR Rule 9(d).  Since ADR Rule 9(c) indicates that each party pays an equal share of the mediator’s fee (generally due upon conclusion of the conference) a mediation involving an indigent party means the mediator’s actual billing rate may become less than $175.00 per hour.

The $175.00 per hour rate hasn’t increased since this rule went into effect on May 3, 2006.  It is the typically billing rate of a newly licensed attorney and well below the billing rate of more experienced attorneys.  Further it often takes more than an hour to prepare for a mediation.  Sometimes, it can take almost an hour of time to get the date and location of the mediation resolved.   A mediator can frequently spend hours in preparation if the parties want the mediator to review a significant amount of material prior to the mediation.  A mediator can limit the time he or she spends doing document review prior to the mediation by reviewing these documents in the initial caucuses with each party.   However this makes the mediation much less efficient and wastes the time of the parties’ attorneys (who sit around billing their clients while the mediator reviews documents).  If the parties wish for the mediation to take place at some location other than the mediator’s office, the mediator loses billable time when he or she can’t charge for travel.

Finally, a mediator often sets aside a whole day for a mediation.  This means not being able to schedule other appointments for the day.  This means making sure that any urgent work is completed the day before the mediation.   Setting aside a day of attorney time has significant value even if the time is not used.   If the mediation is cancelled the evening before or the morning of mediation, this leaves the mediator with a full day in which he or she is going to be less productive.  There have been occasions when I worked late into the evening the day before a scheduled mediation to complete urgent work only to find myself with little work the next day because the mediation was cancelled.  Being able to charge no more than $175.00 when mediations are cancelled on short or no notice is simply not fair.

Court appointed mediators who follow ADR Rule 9(b) are actually performing a public service, as they would be much better compensated doing regular attorney work.  I find mediating to be emotionally and intellectually satisfying but a full-time court-appointed mediation practice would result in a significant reduction in my income.  The Supreme Court should revise ADR Rule 9(b) to remedy these problems.

However, in my experience, many attorneys and mediators are unaware or minimally aware of this ADR Rule and the mediator charges whatever the mediator typically charges for non court ordered mediations.  This is allowable when the parties chose the mediator by agreement. ADR Rule 9(a) (“When the parties stipulate the neutral, the parties and the neutral shall agree upon compensation.”).  However it isn’t allowable “[w]hen the mediator is appointed by the court.” ADR Rule 9(b).  While one might argue that a court-appointed mediator who is agreed upon by the parties falls under ADR Rule 9(a), and can therefore charge his or her preferred rate, that isn’t an argument I would want to make the a family court judge or the Office of Disciplinary Counsel.

Mediators are always free to charge less than the ADR rule rate but the current ceiling on compensation is too low. ADR Rule 9 should probably be updated to make the compensation of court-appointed mediators more generous.  However, until it is, court-appointed mediators need to make sure they don’t overcharge parties and attorneys need to make sure mediators aren’t overcharging their clients.

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