Mediation of Financial Issues in Divorce

Published in Chicago Lawyer Magazine, June 2014
by Daniel R. Stefani

Effective March 17, 2014 Local Cook County Rule 13.4(e) regarding mediation of certain domestic relations issues has been revamped and expanded to allow for all aspects of a domestic relations case, including financial matters, to now be mediated by Court order.

Mediation in the context of domestic relations cases has been around for a long time.  However, the old Rule only allowed a Court to order mediation on issues of custody, visitation and/or removal of minor child(ren) from the State of Illinois.  Now the Court can order mediation on financial issues without the consent of the parties on its own initiative.

An order of mediation is discretionary on financial issues, discovery disputes and any contested domestic relations issues other than the mandatory mediation on initial determinations of custody, visitation or parenting time, the modification of same and removal or relocation of the child(ren).  The Court may submit the contested issue to mediation at any stage of the proceedings so long as a trial on that issue has not commenced.  Once a trial on a contested issue has commenced, the Court may recommend that the contested issue be submitted to mediation only if both parties agree to suspend trial.  Rule 13.4(e)(ii)(a).  Of the cases subject to discretionary mediation, a party may object to the Court’s referral to mediation on the basis that an impediment to mediation exists or there is good cause to exempt the case from mediation.

The parties are able to choose a mediator of their own selection once mediation has been ordered on the discretionary issues.  A mediator selected by agreement of the parties need not meet the qualifications for mediators set forth in the Rule.  The parties, on their own initiative, may also utilize other forms of Alternative Dispute Resolution.

Additionally, the Court will maintain a list of Court certified mediators if the parties do not agree on the mediator.  Individuals who wish to apply to be placed on the list for discretionary mediation (primarily financial issues) must be Illinois licensed attorneys.  The other main requirements include three or more years of experience in the mediator’s applicable profession and completion of a minimum 40-hour Court approved mediation training program.  There are additional requirements which are set forth in part in the Local Rule.

Once the parties have been ordered to discretionary mediation, all existing Court orders remain in full force and effect and the parties may not proceed to a hearing on a contested issue without leave of Court while mediation is in progress, except in cases of emergency.  13.4(e)(iv)(a).  Discovery is suspended during mediation on mandatory mediation issues.  However, there is nothing in the new Rule which provides for suspension of discovery during mediation of financial issues.

Pursuant to Rule 13.4(e)(ix)(a), mediation communications are confidential and privileged and not subject to discovery or admissible in evidence.  However, evidence or information that would be otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its disclosure or use in mediation.  To promote openness and to amicably resolve the financial issues in mediation, the mediator is only allowed to advise the Court on the date of completion of mediation who participated in the mediation, whether a settlement was reached and whether further mediation is contemplated.

To the extent the mediator conducts an evaluative mediation, the mediator’s recommendation may not be submitted or made available to the Court without the consent of the parties.  Also, the identity of the party or parties who rejected the mediator’s recommendation shall not be disclosed to the Court.  If the parties have a partial or full agreement, the terms are memorialized in writing and signed by the parties and would then be submitted to the Court for approval.

On a similar subject, the Local Rule now sets forth the initial duties of the mediator.  One of many duties is for the mediator to explain to the parties that no legal advice will be provided, although the mediator may provide legal information.  According to the Committee comments, the differentiation between “legal information”, which the mediator may provide, and “legal advice”, which the mediator may not provide, is not a bright line.  The definition of “legal information” is a description of the law and legal process, whereas “legal advice” involves analyzing the application of the law to a litigant’s situation and making a suggestion of what action a litigant should take on a legal issue.

What makes mediation of financial issues an effective means of dispute resolution is because it provides, in part, a “neutral” third party who can give legal information and recommendations for settlement of issues.  Litigants in domestic relations cases, especially on financial issues, are most times skeptical of the claims of the opposing party and/or the opposing party’s counsel as it relates to financial issues and often times there is a disparity between the parties in their knowledge of facts and circumstances surrounding their financial issues.  Now that a Court can order evaluative mediation on financial issues, many cases which would otherwise be litigated are now more likely to be resolved by agreement through Court ordered mediation.