Is paying the mediator the lawyer’s responsibility, the client’s, or both? Many mediation agreements are surprisingly vague on this, stating only that the “parties” shall pay a certain amount. In National Arbitration & Mediation v. Feinstein & Nisnewitz, P.C., 2012 WL 5456362 (Sup.Ct.N.Y 2012), a mediation firm sued the law firm that hired it for unpaid fees. The law firm in turn sued its client for any mediation fees the law firm had to pay, and moved to consolidate the two actions. The court denied the motion to consolidate because the mediation agreement made it clear that counsel was responsible for the mediator’s fees. The obligation to the mediator under the mediation contract, and the obligation of the client to the law firm under the retention agreement, were two separate claims that did not need to be consolidated.
Bottom line: Make sure your mediation agreement is clear on who has the obligation to pay the mediator.
Happy holidays and best wishes for the new year!