A consumer who prevails in a lawsuit under the Fair Debt Collection Practices Act cannot recover the expenses of a court-ordered mediation, a federal appeals court has ruled.

The January 10 decision by the 11th Circuit Court of Appeals in Nicholas v. Allianceone Receivables Management, Inc. is significant because court-ordered mediation is frequently used in cases involving claims under federal consumer protection statutes.

The three-judge appellate panel concluded that mediation fees cannot be included in an award of costs because they are not listed as a “taxable” cost in the federal statute that governs such awards.

The plaintiff had accepted the defendant’s settlement offer, which provided a specified payment and an additional award to the plaintiff of reasonable attorney’s fees and costs to be determined by the court. Among the costs requested by the plaintiff were the costs associated with the mediation of her case.

A magistrate judge recommended denying the plaintiff’s request for mediation costs, and the district judge agreed. Now the 11th Circuit has upheld the ruling on the grounds that such costs are not taxable under 28 U.S.C. §1920, the provision that lists the types of fees and other charges that may be taxed as costs.

Ballard Spahr lawyers regularly consult with their clients engaged in consumer debt collection on compliance with the FDCPA and state debt collection laws.

Ballard Spahr’s Consumer Financial Services Group produces the CFPB Monitor, a blog that focuses exclusively on important Consumer Financial Protection Bureau developments. To subscribe, use the link provided to the right. The group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).

For more information, please contact Practice Leader Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Practice Leader Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; John L. Culhane, Jr., 215.864.8535 or culhane@ballardspahr.com; Barbara S. Mishkin, 215.864.8528 or mishkinb@ballardspahr.com; or Mark J. Furletti, 215.864.8138 or furlettim@ballardspahr.com.



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