Is Free Mediation Coming To Resolve Your NY Debt Collection Claim?

Are you interested to see if mediation would resolve your claim? If so, you will need all parties involved in the dispute to agree. Without total agreement, mediation cannot go forward. If one party does not want to mediate, you can’t mediate. This is true even if your agreement provides for mediation of all disputes.

The mediation pilot program offered by the Civil Court of the City of New York is exciting and it is FREE. For now, consumer cases seem to be all they are handling. However, the intention is to expand the program to include B2B disputes. Besides the parties’ total agreement to mediate, the recovery amount in the underlying matter must be within the jurisdictional limits of civil court, which is up to $25,000.00.

Unlike mediation through the Supreme Court, where available, New York civil court mediation is also available for a permitted matter even before filing a lawsuit. In Supreme Court, the Judge can order mediation.  In Civil Court,  the parties can decide on their own to file for mediation. They need not have an active case or a Judge assigned to the case.  One party unrepresented by counsel is sufficient to qualify the case.

The civil court emphasizes that the mediation is free for up to three hours. This makes it convenient and fast. You can potentially reach a settlement in a one- or two-hour session with a mediator. After three hours, there is a $300 hourly fee payable to the mediator. To continue, the parties must agree to pay out of pocket.

Mediators and the process to mediate.

The mediators are volunteers, specially trained to participate in the program. They may be law students or lawyers. Arbitrators have the necessary training to handle nonpayment disputes, i.e. debt collection claims.

For those who appreciate the expediency of a mediation process, mediators usually recommend settlements close to what a judge presiding over a case would order.

Know that any resolution will involve settlement and compromise. You cannot, in mediation, expect to walk away with 100% of your stated claim. At the same time, payment closes the matter without the need for further legal proceedings. This enables you to close the matter and focus on other work.

What if mediation fails?

If mediation does not result in settlement, you have not waived any right to proceed in court.

If you failed to resolve the dispute in mediation, you can still pursue litigation or arbitration, depending upon your underlying agreement. Attempting mediation and failing at it does not prejudice you. You may still try to recover the debt in court.

Caveats:

If you are close to the date of expiration of the statute of limitations, you may not have time to mediate. You may have to file suit and serve notice on the debtor first, before offering mediation.

Civil court in-house mediation, if your case is eligible for it, is a viable option towards faster resolution of your monetary claims. When and if the program expands to include commercial cases, a new viable free option will open for dealing with commercial debt $25,000.00 and under.

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