smart spending

Save money on legal disputes

Services at your doorstep

If you're interested in testing mediation or arbitration, consider low- or no-cost local services often offered through your local government. The Jefferson County Mediation Services, or JCMS, in Golden, Colo., is one example. In most cases, JCMS costs nothing for participants.

"We have 212 trained volunteer mediators," says Mark Loye, the program's director. "We'll call both sides in the dispute and arrange a time to discuss potential solutions. The classic case that got our program going is the barking dog. It could be that the dog owner builds a run so the dog can't see the street. Maybe the neighbor gets a set of the dog owner's keys and can let the dog inside.

"If the parties agree on a resolution, they sign a memorandum of understanding. It's not a contract and doesn't have the force of law. It's just a written agreement between them, and hopefully the problem is solved."

JCMS also offers arbitration. "Our typical arbitration case is blight," says Loye. "The municipality is asking that a property be identified as blighted. That involves a hearing, and rather than pay a hearing officer, the owner asks one of our volunteers to handle it."

You can also hire your own mediator or arbitrator. "I do absolutely everything -- business, real estate, landlord-tenant, domestic and employment disputes," says Malow, "along with personal injury cases." Like Malow, mediators and arbitrators typically charge by the hour, with fees varying, depending on the number of parties involved and the dispute's complexity. You'll also typically pay an administrative fee.

Nelson is working through the American Arbitration Association, or AAA. "So far, it costs about $3,000," he says. "The initial payment was $1,500, which the AAA holds as a retainer. If you spend it before the process is over, the AAA will bill you, and you can make payments online by credit card. The costs have been reasonable."

Hire your own big gun

If you're not sold on mediation or arbitration, you can also hire a negotiator to act on your behalf to resolve a dispute. "Negotiation is the least structured and probably most misunderstood form of alternative dispute resolution," says Jeff Gordon, a professional negotiator in Raleigh, N.C. "In a negotiation, you hire a negotiator to work out the issue. Unlike a mediator or arbitrator, the negotiator is partial to your side and strongly advocates for your position."

Gordon charges $300 per hour but realizes that may be pricey for some consumers. In those instances, he recommends hiring an attorney to negotiate -- under strict instructions. "Find an attorney who's willing to help you settle your claim," he says. "But make it clear you're not interested in suing but using the law as a lever to get a negotiated settlement."

If you're convinced you can resolve a dispute on your own -- without a mediator, arbitrator or negotiator -- Gordon has sobering advice. "Most people think they're great negotiators and want to handle disputes themselves," he says. "I've learned in negotiations with my wife that if I'm personally involved, I get wrapped up in the emotional issues and lose every time. For the same reason you shouldn't be your own lawyer or doctor, you shouldn't be your own negotiator."


Show Bankrate's community sharing policy
          Connect with us

Connect with us