0177: Downsides of Mediation in Divorce

Visit us at divorceandyourmoney.com for the #1 divorce resources in the United States and get personalized help. Learn about coaching services here.   Thank you for listening! Find a transcript of this episode below.   In this episode, I'd like to discuss mediation. It's something like 95% of divorces, roughly, depending upon the statistic that you read, are settled out of court. Mediation is one of several ways you can settle divorce out of court.   Now, you can do what's called a do-it-yourself divorce, which means you and your spouse just work everything out yourself, you prepare the papers, submit them to the court, and you get divorced. You could have collaborative divorce, which is an option for you as well, which is a specific divorce process. You can look it up. There's episodes on it in the archives of this show as well. You can do what's just called a negotiated settlement, which is also common, which is where you and likely your attorneys will go back and forth and figure out and reach an agreement. Hopefully a reasonable on, and hopefully in not too much time, and you talk through with your attorneys, and you settle things.   And then there's mediation, which could be a part of many of the other options I already mentioned, but it is its own process, and it can help you stay out of court. Actually, in some states, depending upon where you live, they actually have court mandated mediation, meaning before you go in front of a judge or have the opportunity to go in front of a judge, the court mandates you go to mediation in advance.   But in this episode in particular, I want to discuss some of the downsides of mediation because, on the surface it, can sound like a great thing to do. I am a big believer in mediation when it works for you, but there are some things you have to be aware of and there are upsides and downsides to every part of the process. Actually, one of the things that I do a lot of thinking about when I get to work with you is are you thinking about things from your spouse's perspective as well? Not because I'm going to be defending or working with your spouse, but if you look at things from his or her perspective, you might be able to come up with a much better settlement that's better for all parties involved than if you only are coming from your self interests and not thinking about what might work for them or what their attorney might say.   The reason I want to bring this up in the context of mediation is that on the surface it sounds great. You might have had a friend who went through mediation and it perfectly resolved their divorce, or you may have heard about it or your attorney may have recommended it, or whatever the case may be, but I want to talk about some of the downsides to mediation. But before I get into those downsides, let's talk about what mediation is.   I want everyone on the same page and in mediation, now, there are some variations, but the idea is basically you and your spouse and a neutral third-party work things out in your divorce, any sticking issues or maybe all of the issues, to hope to help you get to a resolution. Now, when you go to mediation, there's a neutral third-party, as I said before. It could be a retired judge. It could be a professional mediator. Actually, one of the attorneys I work closely with, he shares an office with a professional mediator, and they have a conference room, and you can see them hashing out days of mediation.   So usually who's there, it's going to be you, your spouse, a mediator, and then both of your attorneys, most of the time, and this where we're going to start getting to some of the downsides, but we'll get there in a minute. One of the things that's very important as well is when you go to mediation, or the objective, I should say, is to come up with a resolution to your divorce. Therefore, you should be cognizant and prepared for your mediation the same way that you would prepare for a trial. Now, mediation is far less intense, at least in terms of, I won't say it's less intense emotionally because mediation can be very draining, very high stakes, and there's a lot going on, but it's less intense in the sense that there's a nonbinding process, typically, with most mediations. If it's not working, then you don't have to come into an agreement.   Where there's enormous stress involved in the court processes, you have a random judge who cares very little about you in most cases. Nothing against the judges, but if you're sitting and you've been practicing law for decades and you hear every family law story and one attorney creates a crazy story for their client, and the other attorney creates a totally opposite story for the other client, it's hard to really come with an informed decision. You often also have very limited time in the court setting to work out whatever issues you want to think about. And so, when you go to court, the stakes are very high because those decisions are final. I guess you can appeal in some cases, but they come with a lot of pressure. Whereas mediation, you want to come as prepared as you might for a trial, but the pressure level is a little bit lower.   But anyways, I digress. I have a tendency to talk quite a bit. It is a podcast, I suppose. But I want to discuss the downsides of mediation. I want to discuss three things in particular that people don't always consider when it comes to mediation.   The first is that when one spouse is not participating in good faith. The second is that mediation can be very expensive, and the third is that, I already touched on this a little bit before, is that mediation doesn't replace a judge and mediation is nonbinding. So let's jump into each of those three points very quickly.   The first is that what happens if one spouse is not participating in good faith. This is actually one of my biggest frustrations with the divorce process. I think anyone who's dealing with it, the divorce process, a.k.a. everyone listening to this show, you know that a lot of things about it don't seem right. Most of you listening are just trying to get what's in your best interest and a fair settlement and move on, and make sure that you get enough to live a life, the best life you can after the process. But when you start going to mediation, oftentimes we're dealing with, I'll just call, an irrational spouse. The spouse that really is either distrustful of the mediation process or just has such unrealistic expectations that mediation is not going to be productive.   Unfortunately, I see it all the time. What happens is usually the person that I work with because I'd say almost everyone who books a coaching call with me understands what's going on. You might have substantial questions about particular issues, but you get the process. You're well-informed, and you get the general gist, but you have some questions or clarifications. You're facing a big decision and you want to know a second opinion or a third opinion, sometimes in my case, or just see if what's in your head or what you're hearing actually makes sense. Well, the challenge in mediation is when you go and you show up to mediation and you show up with your attorney, you're prepared, you know what you want, you're ready for the negotiation, but your spouse is so unrealistic and uncooperative or just doesn't get the whole process, you can end up in a position where, well, you don't get anywhere. Unfortunately, you end up in a spot where the day of mediation is completely wasted.   If you know that your spouse isn't going to work with you to try and resolve some of these issues, then you are not in a good spot. You need to really question is is it worth even showing up in the mediation or is it going to be a waste of everyone's time?               Now, the second issue with mediation is that it is expensive. Mediation is not cheap at all. Here's why. When you go to mediation, you usually do it for a day or a half day of a session. Something like that. You book a mediator. So you're paying however much a mediator's hourly rates are. It could be a couple hundred dollars an hours. It could be several hundred dollars an hour for a mediator. And so, if you think about an 8-hour day, you could be spending a few thousands dollars on the mediator alone.                Then you are bringing your attorney. You are now paying your attorney's hourly rates for a whole day. It's not like the 15-minute phone call. It's not like the couple hours to prepare a document. This could be a full day of your attorney's full rate in hourly fees. Not only your attorney, your spouse's attorney. And so, it's you, your spouse's attorney, your attorney, your spouse's attorney, so it's at least five people participating in the mediation process for a day. Now, if mediation does not resolve itself in that day, and it often does not, you're going to be doing that times many days. I know people and many of you listening could end up spending at least three or five thousand dollars for a day of mediation, but could be many times that. If you have to have multiple mediation sessions, you can look at bills in the tens of thousands of dollars very quickly just from the mediation process. And now, what if you bring your accountant with you? Or what if you bring a business evaluation expert with you? What if you bring a vocational expert with you? What if you bring any number of potential experts with you during the process? Well, unfortunately, that only adds to the bill. If you're not getting anywhere in the mediation process, and I see it happen, unfortunately, as I said, every day, where people go and they make no progress during mediation and end up spending thousands, if not tens of thousands of dollars, in the process. Well, guess who wins? Not you, but your attorneys and that is the situation.   Mediation can be expensive, so you need to be aware of that going in and make sure that it really is going to be fruitful for you.   And then finally, the last thing I want to bring up is that mediation is non-binding. You're going to understand that all three of these points are closely connected because mediation doesn't lead to a final ruling. I tell people this all the time when you come for a coaching call. A lot of times, you come for a coaching call and either you're a few weeks out from mediation or it's about to happen tomorrow, whatever the case is, but I'll say like, "Look. You gotta understand that if you're in the mediation room and things are not going your way and you're going towards the approach of a wholly unacceptable settlement, mediation is, generally speaking, non-binding. So if it doesn't look like things are going to go your way, or at least in a reasonable direction that you can live with, you don't have to be forced to sign that agreement in the moment with all the emotions flowing and the adrenaline and everything else going on.”   When it comes to the mediation being non-binding, that has the potential opposite effect as well for your spouse, which means that if you're coming to an agreement or you think you're going in a good direction, and all of a sudden, your spouse just says, "Screw it. I'm not that interested in this deal. I don't like it." Well, guess what? You don't come to a deal and that time has been, I don't want to say wasted because it's not always wasted, but kind of. You're not getting that money back.   That's a part of the process that you really have to understand. It's different. There is something called binding arbitration, which is used oftentimes in commercial disputes, commercial cases, but a little less common in family law. I don't see it too often. That and those cases, whatever the mediator, or in this case they call it the arbitrator decides, is final, but in a divorce situation, that's not the case. You should just be informed. That's the goal of this podcast always is to make sure that you understand all sides of the issues so that you can make the best decision for you.   The three downsides to mediation, again, I'm just going to sum them up real fast before departing. The first is that one spouse may not be participating in good faith. Second is that it can be expensive and third is that mediation is non-binding and it's not like going in front of a judge where a judge's ruling is final. It is a non-binding process and that comes with its own set of downsides.