Parties who engage in mediation want to ensure that the terms of the agreement will be followed by all parties involved in the process. But one of the disadvantages of mediation as a form of dispute resolution is the concern that the agreement will not be enforced. The ability to enforce a mediation agreement can vary depending on the situation. An agreement that results from an out-of-court mediation is essentially a contract, and a breach of its terms must be addressed like any other standard contract default. However, most parties do not want to be faced with that situation after devoting considerable time and resources to negotiating a mediated settlement. As such, there are certain strategic and legal actions the parties can take to increase the chances that the agreement will be properly enforced and upheld by the parties.
Participation of affected parties. It is important that all individuals who are party to the settlement participate in the mediation proceedings. These parties should either be physically present or provide their written consent to authorize the creation of a settlement agreement. When all the participants are present or have provided consent, the terms of the mediation settlement agreement should be reviewed, written and signed by the parties. A settlement agreement cannot be enforced against any individual who is not a party to the litigation or one who has not signed the written settlement agreement or orally assented to the terms of settlement.
Maintaining confidentiality. One of the hallmarks of mediation is that all communications between the parties during the proceedings are confidential. Any evidence presented during mediation is not admissible in a court of law. As such, the settlement agreement itself may not be admissible as evidence if the matter goes to trial. This fundamental aspect of the mediation process renders enforceability of the agreement problematic. The law, however, provides that confidentiality for communications during mediation is subject to certain exceptions. Specifically, a written settlement agreement is not inadmissible if, among other conditions, the agreement expressly states that it is admissible. Therefore, the settlement agreement should provide that it will be admissible as evidence in any legal action relating to its enforceability.
Formal settlement agreement and release of liability. Once the parties have agreed upon and signed the settlement agreement, they may draft a more formalized agreement and sign liability releases at a later date. The mediation settlement agreement signed at mediation should explicitly state that it is intended to function as a binding agreement between the parties so that there is no uncertainty as to its enforceability when subsequent documentation is executed.
Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.