The Continuance Fee

Near the end of my second year of law school I found myself in summer internship interviews. One of these interviews involved my brother’s old High School buddy who had gone to work for the state Attorney General’s office. I remember meeting with him at the State Capitol building. I was impressed with the formality – after all, this is where the Law was made; this was where the Law was enforced. It all seemed so official.

Near the end of our meeting my interviewer surprised me. He said simply, “Law is a business. I need to figure out a way to make more money.”

I was taken aback. This gentleman was in a government service job – and an important one. He was part of the governmental machine. It hadn’t occurred to me that public servants in important positions might be dissatisfied (to some degree) with their lot in life. And after spending so much time in law school talking about how the law worked, it surprised me to hear how money factored so directly into public services.

Now I’m here after more than 30 years in the law, and I have a far better understanding of what he was talking about. On occasion I’ve been known to say, “It all comes down to money” or “It’s all about the money.” That’s not always true – but it often is. It’s true for attorneys. It’s true for clients.

I’m also learning it’s true for mediation. If law is a business, then so is mediation. We may not always think of mediation that way. But mediators have expenses – just like everyone else. Some mediators may enjoy a pension or other income stream so payment for them may not be as pressing as with others. But most mediators expect to be paid for their services (except for some court programs, some Bar Association programs and certain community mediation programs).

There’s one aspect of the mediation business that has held my attention for some time: the “continuance fee.” Some years ago I had a friend who practiced personal injury law. One day he said, “I just don’t like it when I get charged a full fee for a mediation that didn’t happen.” I don’t have a problem with paying a mediator for their time – but I don’t like paying the full fee.” What he was talking about is what I call the “continuance fee.”

I first ran into this several years ago when I was engaging a mediator through a mediation service. The terms of the service provided that if a date was reserved and the mediation was canceled or postponed within a certain number of days of the scheduled mediation, then the entire fee would be forfeited and nothing would be returned.

This seemed to be a bit heavy handed. I called up the service, and they confirmed what the documentation said. If the mediation was canceled or postponed shortly before the mediation, then no refund would be forthcoming. I understood this was because the mediator had reserved time, and it was unlikely on short notice that a replacement mediation could be scheduled. The mediator (and the mediation service) would then “lose out” on the opportunity of generating income that day.

That seemed a bit troubling to me. What if the other side balked? What if somebody got sick? What if the mediation was postponed for reasons beyond my control?

Too bad. No exceptions. If the mediation doesn’t happen, no refund.

As mediator myself, I see the dynamics more clearly now. Law (and mediation) is a business – with ongoing expenses and a continuing need for revenue. Reserve a day for mediation and you commit resources. Lose out on that day, and the expenses continue (but the income doesn’t). Voila! The continuance fee.

But in reality how many mediations get canceled or continued? Some – but not many. How many get canceled or postponed for no good reason? Even fewer. So what’s a mediator (or a mediation service) to do?

Everybody gets to choose. Some airlines charge a penalty for changing your flight. Some don’t. Everybody chooses their own business policies. But there’s nothing set in stone that says a party has to give up their entire mediation deposit just because someone fell ill, ran into trouble, or couldn’t proceed on a certain day – whatever the reason.

Nobody wants to see a scheduled mediation get put over. But when the unexpected happens, sometimes it’s just unavoidable. In those situations counsel and their mediators get to figure out what happens next based on their agreements made beforehand.

The foregoing article is provided for general information purposes and should not be used in connection with any specific legal matter. Persons with legal issues or matters should consult competent legal counsel.

Robert B. Jacobs is an attorney, mediator and arbitrator with over 30 years of litigation experience. He mediates business, real estate, trust and probate cases. He is a designated Superlawyer and hold an AV rating with Martindale-Hubbell. He was the 2019-2020 chair of the ADR section of the Contra Costa County Bar Association and the co-chair of the ADR section of the Alameda County Bar Association. Reach him at Bob@attorney-mediator.law

Copyright 2017 ROBERT B. JACOBS