Compliance Success with Mediated Settlements in Small Claims

SEEDS: Who We Are
SEEDS Community Resolution Center (SEEDS) is a nonprofit organization located in Berkeley, California. SEEDS have been providing various conflict resolution services to the local Bay Area community for over 30 years, specializing in mediation, facilitation, training, and restorative justice.

SEEDS see conflict as an opportunity for positive growth and transformation in our society. SEEDS envisions a future in which all individuals and communities have the skills and capacity to engage in effective dialogue and promote peaceful resolution of issues and conflicts. SEEDS stands for Services that Encourage Effective Dialogue and Solutions.

The Court Mediation Program
Part of SEEDS’ mediation services includes a Court Mediation Program, which has been serving the local superior courts for about a decade. The Court Program utilizes court-approved volunteers, and trained, supervised, student trainees, to provide same-day mediations at contracted Superior Court calendars in Alameda County. Litigants arrive prepared for their hearings in Small Claims (general civil lawsuits up to $10,000), Civil Harassment (restraining orders), and Collections Courts (debt collections), and a SEEDS team of mediators is on hand to offer free and confidential mediation services on location at these Superior Court calendars. SEEDS coordinates closely with Judges and other court personnel who are exceedingly supportive of mediation. The Program Manager supervises and mentors the mediators on a daily basis to ensure the quality of mediations.

The SEEDS Mediation Process
Under the SEEDS model, mediation is a facilitated, confidential conversation guided by an impartial, trained, experienced, court-approved mediator. Mediators do not take sides or give any legal advice, and do not make any decisions for the parties. Instead, mediators give both parties the chance to discuss what is really important to them, listen to the other party’s perspective, explore new options, and discover solutions that may be more beneficial to both parties than what they can get from the court process.

The process is completely voluntary, and mediation does not proceed without informed consent from all litigant parties. If mediation does not resolve the case, the parties return to court immediately for their scheduled hearing, or to set a future court date. The mediation process usually takes 1 – 2 hours total.

Through this process, many litigants find mutually beneficial resolution to their case without having the Judge decide the outcome. This is a great advantage for litigants, because when they control the outcome, the results can be much more flexible, and personally satisfying. In mediation, settlements are not just limited to monetary terms, though that is often part of the agreement.

All terms are put into writing so it is clear what is to happen, and all parties, including the Court, are given a copy of the agreement. Mediated settlements regularly include agreements for specific actions, non-actions, or even apologies. The opportunity for understanding and reconciliation is one of the most powerful reasons that mediated settlements are successful.

Court Mediation Data for 2014
SEEDS mediates in Small Claims Court five days a week, Monday through Friday; in Civil Harassment Court on the first four Fridays of each month; and Collections cases two Mondays per month as scheduled by Judges participating in the program. This is approximately 30 half-day calendars per month covered by SEEDS mediators. At each calendar session, anywhere from 1 – 4 cases are usually mediated; this number varies depending on the court, and the litigants present.

Statistical data, compiled by the Court Mediation Program Manager, is for the calendar year 2014. Data comes from various Court Mediation forms (Agreement to Mediate, Mediated Settlement Agreement, and Volunteer Sign-In Sheet), and totals are for all three courts in which SEEDs mediates, except where noted.

In 2014, SEEDS served 1,202 clients at the Alameda County Superior Courts. SEEDS team of mediators worked 2,738 hours in preparation for mediation, and in mediation sessions. This number represents hours spent by volunteer mediators and supervised student trainees; but does not include hours mediated by the Program Manager, who attends court 3 – 5 days per week. Over the course of the year, 411 cases were mediated, and of those, 359 cases were mediated in Small Claims Court.

Out of the total mediated cases, 250 resulted in written mediated settlements, with 209 of those in Small Claims Court alone. The brightest statistic for SEEDS was the 86% compliance rate with settlement agreements in Small Claims Court.

For all cases, SEEDS experienced a 61% settlement rate in its Court Program for 2014. In Small Claims alone, the settlement rate was lower at 58%. These rates are similar to other community mediation programs working in the courts, who have generally reported a range of settlement rates between 47% and 78%. (Wissler)

Settlement Agreement Enforcement in Small Claims
In Small Claims Court, mediated settlements are final and binding. This means the Court has the ability to supervise the agreement, and convert it to a Judgment if necessary. Mediated settlements are thusly provided teeth as legally enforceable – a big draw for many litigants, especially plaintiffs. The Court will honor the negotiated terms of the mediated settlement as the final outcome of the case.

When there are terms of a settlement agreement that extend into the future, the Judge sets what is called a compliance date. This hearing is set up after the final payment, or action, date to ensure that the terms of the mediated settlement are fulfilled. When the terms of the settlement are satisfied, the parties do not need to attend the compliance hearing; after no one shows up, the Court assumes the agreement was successful, and the case will be dismissed.

However, if something goes awry with the settlement agreement, this is where the compliance hearing comes into play. When there is a problem with the agreement, or the terms are not fulfilled, the parties may return to Court on or before the compliance hearing to have the mediated settlement enforced.

SEEDS mediators do not take part in compliance hearings. However, if the parties both want to renegotiate the terms of their settlement agreement instead of having the Judge decide the next step in enforcement, SEEDS mediators are able to facilitate that process.

To illustrate a situation where compliance is needed to enforce an agreement, consider the following example. A mediated settlement may call for the defendant to pay the plaintiff $1000, to be paid in five monthly payments of $200, starting on January 5th, with the final payment date being May 5th. A compliance hearing has been set for June 5th. The defendant pays as follows:

Date

Payment Scheduled

Payment Made

January 5

$200

$200

February 5

$200

$150

March 5

$200

$200

April 5

$200

$50

May 5

$200

$200

In this scenario, the defendant has only paid a total of $850. The terms of the agreement have not been fulfilled, since the total $1000 has not been paid by May 5th.

At the June 5th compliance hearing, the plaintiff will be able to present evidence and testimony that the full amount has not been paid. Assuming the parties kept sufficient records of the payments and there is no disagreement about payments made, the plaintiff will be entitled to, and awarded, a Judgment of $150 for the remaining balance owed. The plaintiff must then collect the judgment through traditional legal collection methods.

SEEDS’ Compliance Rate in Small Claims
SEEDS mediated settlements have been remarkably effective in Alameda County. In Small Claims, a total of 71 cases were set for compliance hearings in 2014, and of those, 61 never returned to court to have their agreements enforced. This means that 86% of parties who mediated their case to resolution successfully received their negotiated settlement. This rate is far higher than the general collection rate for Judgments issued by the Court, which some studies have found to be as low as 33%. (Charkoudian)

If a debtor does not voluntarily pay, collecting a Judgment can be a lengthy and expensive process for plaintiff creditors. There are many ways that a plaintiff may collect, and this is not normally pre-arranged in the Judgment. This, combined with the fact that Judgments are renewable every 10 years (CCP §683.010 through §683.220) should be a signal to plaintiffs that collecting is not always a simple course of action. SEEDS’ mediated settlements result in a more efficient and complete outcome because determining the specific terms and timeline of implementation are part of the mediation process.

Conclusion
Compliance with mediated settlements is nearly three times as high as compliance with Judgments, resulting in quicker final resolution of court cases. In nearly 9 out of 10 cases, the negotiated outcome, representing the parties’ underlying interests, was honored. SEEDS’ experience illustrates that mediated settlements are more reliable and expedient.

SEEDS attributes this result to multiple factors. One factor is the practice of specifically laying out the terms of the settlement within the agreement. This method provides a clear roadmap for parties to follow after they leave court, and serves as a physical reminder for what each side has promised to do under the agreement.

Another reason is the parties’ investment in the process, built over the time spent in mediation discussing what is most important to each side and proposing potential solutions themselves. When parties take ownership of the outcome by crafting the terms of an agreement themselves, they develop investment in upholding the terms of the agreement. In this manner, agreements also become effectively self-enforcing.

Moreover, since mediated settlements made under the SEEDS mediation process are able to address the concerns of all parties, there is the opportunity for a win-win scenario. The desire to uphold an agreement where both sides get something is more appealing that a scenario where one side wins and one side loses.

The 86% successful compliance rate in SEEDS Small Claims mediations represents the effective nature of the facilitative mediation process and the power of self-determination for litigants within the Alameda County Superior Court system.

 

Endnotes

Charkoudian, Lorig. Giving Police and Courts a Break: The Effect of Community Mediation on Decreasing the Use of Police and Court Resources. Conflict Resolution Quarterly. Winter 2010, Volume 28, Issue 2, pages 141–155.

Wissler, Roselle L. The Effectiveness of Court-Connected Dispute Resolution in Civil Cases. Conflict Resolution Quarterly. Fall–Winter 2004, Volume 22, Issues 1–2, pages 55–88.

                        author

Mattie Robertson

Mattie RobertsonMattie Robertson is a dispute resolution professional who has facilitated over 300 cases, and is certified as both a mediator and arbitrator. She has mentored many other professional mediators and conducted numerous conflict resolution trainings on a variety of topics. Mrs. Robertson spent a decade working in community mediation… MORE >

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