“I want to avoid anything legal.” We hear this a lot from freelancers when faced with a difficult client, and it’s understandable.
The legal system is unfamiliar, scary and expensive. Obviously there are insurance policies designed to do the heavy lifting for you—like sourcing and covering the cost of legal representation.
But not every freelancer has insurance.
Not every freelancer wants to use their insurance.
And in some cases, insurers might even suggest dispute resolution.
Why is dispute resolution considered a good option for freelancers?
Resolution methods like mediation are a more relaxed, informal and cheaper approach to solving disputes. Alongside an independent third-party known as a mediator who oversees the discussion, you and your client come together to discuss the issue.
After all, talking through a problem is so much better than lengthy, legal battles where the outcome is in the hand’s of the justice system.
The mediator’s role is to facilitate negotiations. As they’re impartial they won’t advise on outcomes, but they’ll assist both sides in reaching an agreement. This is an active, iterative process for both you and your client.
Mediation is a quicker process than other legal options, which is part of its appeal. For disputes that are resolved, agreements are usually reached within one session and the success rate is very high.
Once a conclusion has been reached, the mediator drafts a settlement agreement detailing what was agreed to by both parties.
Example settlement agreement
You can expect the settlement agreement to include:
- A schedule of the dispute (what was the dispute about, what outcome has been agreed and who is paying what money to who)
- Agreement not to sue
- No admission of being wrong. The agreement is not an admission of liability for either party
Get in touch if you’d like an example settlement agreement. We can provide one.
Ideally mediation helps you draw a line under the conflict whilst avoiding court fees and other legal overheads.
Because an outcome is reached by both parties—and not a judge or jury—there may be an element of compromise involved. But this is not uncommon when conflicts have reached the stage where mediation is necessary and legal action is looming.
The alternative is that you take the fight to court. However, this is at the expense of lengthy court proceedings, no guarantee your outcome will be favourable, and significantly more costs involved.
Do I need to go through the mediation process?
Courts increasingly expect you to have tried mediation before anything else. You might also find mediation is a contractual requirement within your client contract.
(Unsure what your client contracts state? Check out the dispute resolution section. It will say something like matters will be resolved through mediation with the assistance of a mediator.)
Earlier I mentioned some insurers suggest mediation. Each situation is assessed individually, but if the insurer thinks mediation is suitable they will highlight this.
The insurer will send an invitation to your client asking if they wish to engage in the mediation process, giving them 14 days to respond. If the client declines and formal legal action is required, the court will look more favourably on you because you’ve been open to reaching a conclusion.
Taking the next steps
If mediation is something you’d like to offer your client, being insured opens up your options either in terms of having your policy assist you in the event of a valid claim or getting access to the right people to help you.
Otherwise you can reach out to a mediator independently. Mediators like John can help facilitate conversations between you and your client.
