Mediation Fees as Recoverable Costs?

Under the “American Rule,” each party bears the burden of whatever expenses it incurs during the course of litigation, regardless of the outcome of the case. Federal Rule of Civil Procedure 54 presents one exception to this broad assertion. Under its terms (and equivalent state provisions), “costs other than attorneys’ fees shall be allowed as of course to the prevailing party.” In federal courts, the “costs” to which Rule 54 refers are enumerated in 28 U.S.C. 1920, which lists things like clerk fees, court reporters’ fees, copying costs, interpreters, and court appointed experts.

The explicit list of recoverable costs in section 1920 does not include those incurred as a result of court-ordered mediation. Nevertheless, some prevailing parties attempt to recoup those expenses in post-trial motions for costs.

These efforts fail. Federal reporters include at least a dozen cases on this matter in the past decade, two of which are quite recent. (Cook Children’s Medical Ctr. v. New England PPO Plan, 2007 WL 1842117, ___ F.3d. ___ (5th Cir. 2007); Bates v. Islamorada, Village of Islands, 2007 WL 2113586 (S.D.Fla. 2007).) And in all of them, courts have rejected prevailing parties’ efforts to include mediation fees—even court-ordered mediation fees—among recoverable costs. Section 1920’s list, according to these opinions, is exhaustive. “If it’s not on the list, you can’t recover it.” Prevailing parties have tried to argue that mediation should be analogized to court-ordered experts, but to my knowledge, no court has accepted this analogy.

For what it’s worth, I think these courts have gotten the law right in these cases. Section 1920 does not list mediation. And I’m deeply skeptical of efforts to analogize mediation to other practices and then attach one or another benefit. (I launched into a rant about this troubling phenomenon in the context of common law mediator immunity near the end of a tediously long law review article some time ago. ) So I give these courts high marks for upholding the law as it is written.

But I’m not sure this is the right outcome.

The basic idea behind section 1920 and the ability of a prevailing party to recover costs is essentially a modest version of “loser pays.” If we indulge the goofy fantasy that a pro se party might prevail in litigation, then allowing the recovery of costs (even without attorneys’ fees) renders the litigant whole (if we also ignore the value of the litigant’s time).

If that justification for section 1920 is persuasive, and if courts are ordering parties to go to mediation (and therefore incur expenses), why shouldn’t the prevailing party recover these fees in the same way they recover other mandatory fees? If a litigant must pay for mediation the same way it must pay for the clerk, the marshal, and for a court-appointed expert, why not make those expenses recoverable as well?

The “fix” would be as simple as a quick addition to the language of 28 U.S.C. 1920(6), adding the phrase “compensation of court appointed mediators” to the laundry list already existing.

It seems to me that the justification for cost shifting exists only in the circumstance of mandatory mediation. (If private litigants want to engage the services of a private mediator, then they’re free to do it on whatever terms they choose—with or without cost-shifting in the event the mediation does not lead to a settlement.) But when the court orders the mediation, I don’t see why it should be excluded from the list of things-I-shouldn’t-have-to-pay-for-if-I-win.

One potential benefit of this proposal might be a reduction in the percentage of court-ordered mediation that is taking place on a volunteer basis. I’m not convinced that it is a benefit to the field to further the implication that mediators’ services should be treated any differently than those of other highly-trained service providers.

When I’ve bounced this idea off of others, the universal reaction has been some variation on nose-crinkling-up, as though I’ve introduced something stinky into the room. “Wouldn’t that mess up the dynamic in the mediation?” my audience wonders. And I’ve wondered the same thing, too. But so far, at least, none of us has been able to articulate a specific concern or to identify a concrete, negative incentive that would be created by such a rule.

Section 1920 has not been amended since well before the advent of court-ordered mediation. Perhaps it is time.

Michael Moffitt

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