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Cancellation Fees - What are your thoughts?

How many days in advance of an evidentiary hearing is it still reasonable to charge a cancellation fee should the parties settle or otherwise cancel the hearing?

Please provide your thoughts/comments below.

Comments (7)

Howard Edelman:

I have a 28 calendar day notification period. It allows me to reschedule cases relatively easily. I discourage arbitrators from using work days, as the the parties dispute whether a so called minor holiday is a work day or not. I do not charge for Acts of God-weather, etc.

Anonymous:

I have a two week policy and a modest fee. But I waive the cancellation fee if, at the time I have other stuff to slide into the gap, which is the usual case.

I became a fan of charging a cancellation fee in 2003. I was chairman of a panel which was scheduled to convene for a three-weeks hearing in Bakersville CA. The Friday before the day we were scheduled to fly out there for the hearing we received a call at 5 pm advising us of the parties' settlement of the dispute. They however, requested the panel remains in place in order to ratify the settlement. When the documents were submitted to the panel we found out that a part of the settlement included the payment by the parties of a $35,000.00 cancellation fee to the hotel. Of course the panel members did not receive any cancellation fee because none was agreed. I felt then that if the hotel was entitled to a cancellation fee then so were the panel members. since that time I started charging a cancellation fee whenever I am able to do so. I think that it is a legitimate charge and that it is a negligible expense considering the amounts usually in dispute.

If a hearing is scheduled for more that 3 days and is cancelled ( not adjourned due to illness) on less than 2 weeks notice I charge a cancellation fee. If the hearing will be 3 days or less, then I do not charge any cancellation fee .

Daniel Brent:

I use a thirty calendar late cancellation period, as less than this interval makes it virtually impossible to re-book the day. Late cancellation fees are justified by the incentive they create for parties to discuss settlements far enough in advance to achieve resolution before preparing intensively for the hearing. When the parties are unable to review and discuss the matter in advance, the arbitrator is justified for charging for a scheduled day reserved for these parties that is forever lost. Exceptions for extraordinary circumstances such as medical emergencies and weather events are evaluated on a case by case basis.

I don't charge any cancellation fee because I can always fill my day with productive work. Arbitrators who cannot are certainly entitled to bill a fee for a day or two of hearings when the hearings are cancelled at the last minute. Whether the fee kicks in at less than a week or tow or some other period is up to the arbitrator and is reasonable as long as the parties know the cancellation fee formula before the arbitrator is appointed.

Anonymous:

The best answer is it depends. The underlying circumstances need to be considered as well as your relationship with counsel.

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