Mediation: for NY Debt Collection Claim

Mediation is a type of dispute resolution. The mediator, a neutral third-party,  assists in the resolution of the disagreement. The design of this process facilitates conflict resolution using specialized communication and negotiation techniques. The process encourages active participation by all participants. Dispute resolution proceedings are not on the record.

A mediator manages the interaction between parties and facilitates open communication. Mediation is also evaluative in that the mediator analyzes issues and relevant norms (“reality-testing”), while refraining from providing prescriptive advice to the parties (e.g., “You should do….“)  – Wikipedia

In this process, the mediator works with the parties to try to facilitate resolution. It can be productive if the parties choose to resolve the dispute and avoid litigation, arbitration, additional legal fees, and putting time and effort into a bad debt.

There may be many reasons to choose to include a clause in underlying agreements that provides for mediation in the event of a dispute. Regardless of why, an agreement to mediate may be a way to avoid litigation or arbitration to resolve issues precluding you from getting paid.

Note that without specifically excluding debt collection or fee dispute issues in the mediation clause, New York requires you to bring your case to mediation.

Many New York courts have instituted compulsory or voluntary mediation programs. The programs aim to reduce over-loaded court dockets. Additionally, they may avoid protracted litigation, and help the parties reach faster resolution. Some programs are free.

How Does Mediation Work?

The contract terms may specify the mediation venue. If it does, you file a notice of intention and pay a fee, if required to the dispute resolution center. The administrator of the center then notifies the other parties of your intent to mediate. If the other parties agree, the process advances.

What Are Mediation Fees and Costs?

The tribunal administering an arbitration usually requires a filing fee or case management fee.  Cost may be based on the amount in contention or it may be a flat fee. Consequently, the amount of the fee may differ. In addition, the mediator requires hourly compensation paid by the parties. There may be an additional fee due to the tribunal. The basis of that fee is the total compensation paid to the mediator or the number of hours involved. 

Where does mediation take place?

While this procedure can take place at a variety of centers, most often the underlying agreement between the parties dictate the state and location.

Do I Need an Attorney?

Frequently counsel represents the parties in a mediation. While there is no requirement to have an attorney, there are situations when seeking legal counsel would be a good idea. Consulting a New York debt collection attorney makes sense in helping collect monies owed and understanding the impact of agreements made during the resolution.

Do I Have to Accept the Mediator’s Recommendation?

The parties may or may not agree to accept the mediator’s recommendation. Moreover, if this process does not resolve the disagreement or if the debtor does not wish to mediate (assuming your contract does not call for arbitration after mediation), you may litigate the claim in courts.