“Mediation costs are not listed among the costs that are expressly allowable or expressly not allowable. (Code Civ. Proc., section 1033.5, subds. (a), (b).)” according to the U.S. District Court in Berkeley Cement, Inc., v. Regents of the University of California, (5th Dist. 1/7/9).

However, the District Court concluded, “mediation fees incurred for mediation that was not ordered by the court are not categorically nonrecoverable as ‘not reasonably necessary to the conduct of litigation.'” It is up to the Court, acting within its discretion, to determine based on the facts and circumstances, whether the voluntary mediation was reasonably necessary to the conduct of the litigation.

In Berkeley Cement, the mediation fee award included $7,500 to University, representing 1/2 of the $15,000 mediator’s fee, for a mediation canceled by Berkeley Cement on short notice, for which the mediator could not fill the time slot with a replacement, making the fee nonrefundable.

Potential cost-shifting of mediation fees adds to the risk of the unsuccessful party if the mediation fails, and may embolden a party that believes it will prevail. Litigants should discuss this potential with their attorneys whenever a offer of mediation is made or being considered.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.