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Mediation and ADR Can Help You Collect

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02/19/2013 12:31 PM

Last night this sobering story appeared on the local news about the difficulty of collecting from winnings in small claims court.  One of the many great benefits of mediation and other ADR processes is that parties that participate in and make an agreement are more likely to honor those agreements.  This means you are more likely to collect.  

In my years of mediating cases that qualify as "small claims" (claims under $10,000 in damages), I have seen numerous times when payment was collected at the end of the session.  Of course this does not always happen, though the likelihood of payment increases overall and parties are generally more satisfied with a mediation outcome.  This makes sense because in mediation the disputing parties are both agreeing to the outcome, where in court a judge orders and tells the parties what should happen.  Compare mediation outcomes to small claims court where you have to convince a judge you are entitled to the money, the judge has up to 90 days to make a decision, and even if you win, you still have to collect (which, as shown in the linked report, is difficult).  The court is not going to pay you.  

If you have a claim against you that could go to small claims, mediation has benefits for you as well.  First, mediation is confidential, where court is public.  If you get a judgment against you in court, that public record likely will be used in credit reports and can be a part of the report for about 7 years.  Another great benefit of mediation is that it is flexible and creative, meaning that payment schedules or other options can be agreed upon, versus a court requiring that payment be made as a fixed, total sum.

With all this in mind, I hope more people will realize the benefit of mediation and other ADR processes.  Thankfully, these types of services are readily available today and the costs are similar to the costs of filing a case in small claims court (and often much less than court and attorney costs for non-small claims cases).  Lastly, if you try mediation and it is unsuccessful you can always take the case to court.

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