Using Mediation to Get the Money Youre Owed

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Its not unusual for a client to put a clause in your contract that, if theres an issue, they want to go to mediation, rather than court. Whether or not mediation is a good thing for you, as a freelancer, isnt a simple yes or no question.

Why Mediation is On the Table

Especially if youre dealing with a larger company as a client, mediation is popular because its theoretically faster and cheaper than going to court. If youre based in one state, and your client is somewhere else, just figuring out which jurisdiction to file in can be incredibly complicated. Mediation can take place wherever the parties involved agree on, and theres a little more flexibility about being in the actual room where the mediator is sitting.

Its worth noting that mediation and arbitration are two different situations. In both cases, theres a third party involved, but the exact function of that person is very different. A mediator works to help the two parties involved in the dispute come to an agreement, but that agreement is not binding. In contrast, an arbiter hears both sides of the situation and makes a decision, like a judge might. That decision is usually binding.

Because mediation isnt binding, you may find that it is not always possible to get an equitable agreement out of mediation, especially if you and your client have very different understandings of the situation. Mediation does not rule out a law suit and can simply lead up to one.

Why Freelancers Should Keep Mediation in Mind

Despite the drawbacks of mediation, its still a useful option for freelancers. It can be significantly less expensive to use mediation than to try to take a client to court. While you will likely need some legal advice in order to pursue mediation, youre looking at hundreds of dollars, rather than the thousands of dollars that it often takes to sue someone which, in turn, puts litigation out of reach of many freelancers trying to collect unpaid invoices.

Mediation is less costly in terms of time, as well as money. If youre looking at a big case, you could wind up working with a lawyer for months or years to get it resolved. The number of delaying tactics available when a problem goes to court are huge. In contrast, mediation may take a matter of weeks from the time you decide to start the process to reach an agreement.

When Mediation is the Most Useful

There are times when mediation just wont help: if youre facing a problem with a client or a vendor who is not acting in good faith, going through mediation is not likely to result in an agreement that actually helps you out. Even if you do come to some sort of agreement, its non-binding, which means that the individual or organization youre up against can simply ignore it.

But, provided that both parties are acting in good faith and just want to get the matter resolved, mediation can prove a much simpler approach than taking things to court. Mediation proves most useful in situations when theres an issue of interpretation (like just what a specific clause in a contract really means) rather than when the issue is that someone is simply refusing to carry through on the contract at all.

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