What does mediation cost - and what do you get for it?
25 Basics of mediation (4)
The fourth article deals with the cost of mediation. This is an almost confusing area and - as is so often the case - depends on many factors. In general, however, the following can be said:
1. costs of mediation
Sometimes the parties involved in a conflict are faced with the decision of whether they want to settle their conflict in court or with the help of a mediator or mediatrix. In both cases, third parties are involved in resolving the conflict, which means that costs are incurred for this reason alone.
The following section deals with the costs that are regularly incurred in the course of mediation. However, I will not go into a comparison with the costs of handling a conflict in court. This could be explained in more detail in a separate blog article if required.
The Costs in a mediation can be divided into two categories:
- Costs of the mediator and
- other costs (expenses).
Other costs may arise, for example, if the mediator provides the premises or hotel costs are incurred. This is particularly the case in larger mediation processes, for example between companies that often settle their disputes in seminar centres, hotel and conference rooms or similar. In such "organisational mediation processes", such costs are incurred directly by the parties (such as travel, accommodation and meals for the mediator, etc.).
The costs of the mediator are then regularly invoiced by the mediator. It is not uncommon (in larger proceedings) for advances to be required or demanded.
Although there are now also organisations internal mediatorswho work as employees and therefore do not invoice, but these are not considered below. The mediator shall charge his costs on the basis of the joint Fee agreement resp. -Agreement in the invoice.
Here, 12 practitioners reveal what they do with their mediation training at work.
2. fee agreement
„He who pays, decides “ This principle also applies to mediation. Therefore, in mediation proceedings, the costs of the mediator are generally borne by the parties to the conflict. in equal parts is assumed. This means that if there are two parties to the conflict, the costs of the mediator would have to be borne equally.
In most cases, the mediating parties are liable to the mediator as Joint and several debtor, which means that the mediator could demand the full fee from each party (i.e. 100%, even if only once of course!), but internally the parties are then obliged to pay half of the fee. This ensures that the mediator receives his (hopefully well-earned) fee in full.
The fee agreement is freely negotiable.
In principle, it makes no difference whether the mediator is a tax consultant, psychologist, architect or lawyer in his or her basic profession or whether he or she does not practise any profession at all but is a student, (adult) pupil or trainee lawyer.
However, lawyers are not allowed to charge according to "their" scale of fees. The Lawyers' Fees Act provides for a scale of fees for legal services – such as mediation – to which the lawyer (in consultation with the mediating parties!) does not have to adhere. The provisions of the lawyer's scale of fees can also be waived in their entirety.
It is advisable that the fee agreement is set out in writing.
The written form serves to relieve the personal and mental burden on all participants (note-taking function!), to clarify the joint working alliance (who is working for what and why? What are our contributions to the work?) and in the event that evidence is needed later, should a dispute arise between the mediator and the other participants.
If no express agreement on the fee is made and therefore not agreed in writing, it shall apply to all parties involved, § 612 BGB to note!
Remuneration is deemed to have been tacitly agreed if the service can only be expected in return for remuneration under the circumstances. Sometimes the mediator can demand money even if money has not been expressly discussed. Consequently, for the lawyer-mediator § Section 612 (2) BGB apply. His qualification as a mediator and any criteria according to § 14 RVG should then form the basis of assessment. So if you don't want to pay for the services of a mediator, you should clearly state this in advance.
3. costs of the mediator
The mediator's costs can also be divided into two areas. On the one hand, there is the fee for his mediation work (in the case of lawyers, the fees) and, on the other hand, his expenses.
The Expenses of a mediator These include travelling expenses, office costs (postage, telephone, etc.) and VAT, which must be paid regularly (exception: small businesses within the meaning of the German VAT Act). § 19 UStG). Costs for the premises, snacks and drinks are also possible, provided they are not directly included in the fee, which should be the rule.
It is rare, but quite conceivable, that the mediator will also cover any costs for experts and other specialised advice, which he will then charge as expenses. This must be taken into account and, of course, agreed with the parties in advance. Cost surprises should be avoided. But as I said, this does not happen very often.
The mediator's fee is usually, and quite rightly, the largest item that the mediating parties have to pay (in equal shares). However, mediators' fees vary greatly in practice.
It can be invoiced in hourly rates, daily rates or also according to lump sums.
Lump sums are probably unusual, but can be found, for example, in the mass business of legal expenses insurers.
People with legal expenses insurance are increasingly being offered the option of mediation before they are granted legal assistance. These mediators are usually compensated with lump sums per mediation case.
The hourly and daily rates depend on the mediator's qualifications and the type of mediation in question. The range can therefore hardly be quantified in concrete terms, but hourly fees of between €25 and €500 are certainly possible. Mediators often charge hourly fees of between €100 and €150, while experienced mediators charge between €180 and €350 for commercial mediations. Corresponding daily rates can then be "extrapolated" accordingly.
In most cases, the working time for preparation and post-processing is included in the hourly rates - which explains the level of certain fee rates. However, it is also not unusual for these hours to be shown separately so that they are stated transparently in the fee agreement or in the subsequent invoice.
- In my office When determining the fee, we differentiate between those involved in the conflict making enquiries as private individuals or in their role as professionals, whereby in the latter case it is usual for the organisation to bear the costs. In these cases, we again differentiate between primarily non-profit and primarily commercially operating organisations due to our own socio-political responsibility. -
4. special case: costs of the closing agreement
If a final agreement is reached, it is not uncommon - at least for lawyer-mediators - to issue a so-called Settlement fee to demand. This is considered a kind of extra fee (over and above the hourly rate) because the dispute could be settled.
That is none so-called success fee, which would be inadmissible for lawyer mediators at least because this settlement fee does not remunerate the enforcement of a subjective right. The settlement fee, which for lawyer-mediators is based on section 1000 of the RVG, represents a fee for the fact that the mediating parties have obtained a pecuniary advantage through the agreement as such.
The hourly fee, on the other hand, relates solely to the "mediation" service provided by the mediator, even if the mediating parties were unable to reach an agreement. However, if they reach an agreement, they receive a (quantifiable) value that is not covered by the hourly fee.
Whether the mediator will charge this settlement fee should be clear to all parties from the outset.
In addition, in the case of a lawyer-mediator, the mediating parties can appoint a so-called mediator. Lawyer settlement conclude an agreement. This legal institution generally increases the credibility and stability of a legally effective agreement between the parties. Keyword: enforceability.
5. conclusion
It should have become clear that the complexity of a conflict has an impact on the complexity of the - prior! - mediation agreement, including the fee agreement.
It can also be said that the right mediator can be found for "every budget" and "every level of ambition".
And it was also my intention to show that the question of costs is also the question of the value of conflict resolution. The assessment of the costs also depends on the level of suffering caused by the conflict. The more distressing the situation is, the greater the value of reliable conflict resolution. This has an impact on the assessment of the mediation costs, i.e. how expensive they are estimated to be.
Finally, a question for you: On what factors do you think the price you would be willing to pay for mediation depends? On the training of the mediator? The nature of the conflict? The area in which the conflict intervenes/extends? The degree of escalation? I can imagine that there are many personal differences here.
Re 2: Fee agreement - Interesting that it is freely negotiable and also interesting that it makes no difference in principle what the mediator does in the basic profession.
For me, the price of mediation would depend on the type and size of the conflict and the area in which the conflict intervenes/extends.
Personal view on the mediator's fee: This depends on whether the success affects my future or only concerns what has been settled. Examples: If the mediator's help secures my job, which I want to keep, or settles a neighbourhood dispute, mediation is more valuable to me than if the dispute concerns tradesmen's bills for work already carried out or problems with an insurance company. Future peace and quiet are the real purpose of the mediator.
Hello Julia, I agree with your assessment: mediators work in a future-orientated way. However, the tradesman whose invoice is not paid will also be annoyed in the future as long as the invoice has not been settled. When enforcing the claim, making sure that it is still possible to commission the work again certainly puts this case in the realm of the „workplace“case. Whether the purpose of mediation is to be seen solely in peace and quiet or not also in change and thus also to a certain extent „excitement“, new beginnings and euphoria, I would also see this as being included in my understanding. Peace and quiet, that sounds – I have to say as an administrative law expert – like the tasks of the police, who also have to ensure peace, security and order. Can you get anything out of that?
Thank you for your feedback, it has given me new ideas!
Question: What do mediator invoices look like?
Can a mediator simply write: 18,93 hours á 150 €, or can a mediator issue non-transparent invoices? I look forward to your feedback! In my opinion, the invoices must be structured in such a way that there is a proof of performance and telephone calls are shown with time and connections?
Mediators generally invoice on the basis of hourly or daily rates. In doing so, they must observe the usual regulations for invoices. If they invoice to two decimal places, which is unusual, they should provide corresponding proof of services, similar to lawyers, who are usually able to do this with the help of software. This would be new to me for mediators. So-called. Lawyer-mediators, of course, are equipped accordingly and can also bill their mediation assignments accordingly. But as I said, it is rather unusual for mediation to charge 5.13 hours, for example. Best regards, Sascha Weigel
Mediation - the biggest professional chimera – the only ones who make money from it are the training institutes that delude harmony-illusioned do-gooders into believing that mediation can achieve anything in a mindful, empathic and appreciative way.
Theoretically, yes, but then came the practice!
The fact is:
Many people want to have it, but very few want to pay for it – at least if a funding organisation does not cover the costs.
Added to this is the cannibalisation of fees by the glut of mediators – every soul who runs along does an alternative practitioner – and mediator course in the evening or weekend school, coupled with psychological revitalisation activities through the supposedly unavoidable „further training“and then opens „his own practice“ on the side“ and cross-finances it, adorns himself with lists of (expensive but self-esteem-boosting) training courses from some self-appointed „institute“ and charges fees far below any economic necessity. The ideal is then to have „additional qualifications“ as a coach or yoga teacher… soon everyone will have these „professional titles“ automatically…it is already inevitable…
It's often more about contact with the universe and above all self-congratulation – and then socio-psychological platitudes and communication wisdom, which could be googled with three mouse clicks, are sold as special wisdom. So who is surprised by the negative Erdolgs balance?
As lawyers have now also discovered mediation as an acquisition tool, the demand market is shrinking even further. However, the latter can at least still enforce lawyers' fees.
Conclusion: if you want to sink a few thousand euros into supposedly useful knowledge enhancement and obviously not lucrative career and income hopes, you should do a little Google search of the market BEFOREhand – there's no quicker way to save money!
Dear Mr Steiner, I like your tone, but unfortunately you throw a lot of things into your own pot of annoyance, disappointment and devaluation and try to cook up something sensible with a lot of clichés. That goes wrong. If you are disappointed with your own mediation practice because, in your opinion, there are too few enquiries, this may be due to the usual blah-blah of a mediator promising a win-win situation. At least that's what I can see at first glance. With this experience, you are in good company with many mediators. Mediation is advertised in empathic equidistance to two parties who don't want to belong together at all. That also has to go wrong.
But maybe you're actually attached to the romanticised image of conflict into which the common idea of mediation (win-win instead of lose-lose! Court is evil, mediation is so nice! – yawn, snore…!) can be seamlessly integrated, but no party to the conflict wants to know anything about it. Those who have no idea what an imposition mediation is are unfortunately often mediators; the parties to the conflict know or sense this only too well!
Want to put it to the test?
Question to YOU, who has learnt mediation, but is certainly still experiencing and reviving conflicts: How many mediations have you used as a conflict party in your (professional or private) life? One – or rather none? If none, which I suspect, why not? But that's your private matter.
For your profession of mediation, however, precisely these reasons would be the right approach to tailor your approach and organisation of your mediation services to them.
Or did you just want to take the piss out of „ other mediators who are trained or willing to train“? You – like many – are subject to the fallacy that mediation training is a self-employment course. Even a degree in medicine, architecture, theology or law does not give you the skills to set up your own business and establish a business concept as a livelihood. There is a whole lot more to it than that, as you know as a trained psychologist and self-employed person. And many doctors, architects, theologians and lawyers don't want to be self-employed and don't work in their own practice. And mediators feel the same way.
And there are mediators who are well employed in their own practice – and can also make a living from it. We've even heard of some who are quite good at it (in both respects ;-).
If you are further interested in good, tried and tested mediation, then please click here – completely free of charge, but hopefully not for nothing!
Understanding the paradoxes of mediation – and what impact this has on marketing:
1. https://inkovema.de/blog/paradoxien-der-mediation/
2. https://inkovema.de/blog/16-mediation-marketing-paradoxien-mediationsmarketing/
3. https://inkovema.de/blog/15-mediation-und-marketing-i-drachentoetermarkt-kannibalisierungseffekte-und-das-missverstaendnis-um-die-mediation/
4. https://inkovema.de/blog/5-gruende-weshalb-9-von-10-mediatoren-nicht-von-konfliktvermittlung-leben-koennen/
– Important background knowledge:
https://inkovema.de/blog/klage-rueckgang-klageeingaenge-zivilgerichte/
PS: My mediation practice and my mediation training form two complementary, balanced pillars of my professional work. After all, few things are more fruitful than a good mix of practice, teaching and theory in a circular interplay.