Thursday, December 21, 2006

"How Is A Mediated Settlement Enforced?"

Everything said or done in preparation for or during the course of mediation is confidential. So how can mediation participants be assured that the agreements they create in mediation will be enforced? There are several steps, starting with an enforceable settlement agreement.

Once agreements are made in mediation, a written settlement agreement is prepared by the parties, their lawyers or the mediator, which the parties (and lawyers) then sign. An important part of any mediated settlement agreement is a provision that the parties intend the agreement to be binding and enforceable, which means that the written settlement agreement is an exception to the rule of full confidentiality for anything prepared for or during mediation.

In cases where there are no attorneys at the mediation (either the parties are represented but wanted to mediate without attorneys or the parties have not retained attorneys at all), I work with the parties to prepare a comprehensive written settlement agreement that incorporates all of the terms the parties have worked out. Then, I send the parties off to meet with their own independent attorneys to review the proposed settlement agreement and give each party independent legal advice about their rights and obligations and recommendations regarding the settlement agreement. Often, attorneys are hired for 1-2 hours of time just to review and discuss the agreement with a party.

Depending on the case, we might also prepare a temporary agreement that details the essential terms of the agreements entered while we finalize the more formal settlement agreement. That is to provide parties with security in knowing that there is an agreement in place and that further negotiations about these important points is unnecessary.

Finally, in a family law case, the settlement agreement gets filed with the court, providing the parties with all the enforcement of a court order. If the terms are not complied with by one party, the other party is able to ask the court for help in enforcing the order through sanctions, reimbursement of attorney's fees, or contempt citations (leading to other penalties or jail time).

In any other type of civil case, the settlement agreement is typically not filed with the court, but a Dismissal is filed with the court to close any case that was pending in court. The written agreement itself - whether there was or was not a lawsuit filed - is an enforceable contract between the parties. Certain provisions are included in the settlement agreement to give the court authority to enforce such settlement agreement without opening a new case. If those provisions are not included, then a lawsuit for breach of contract may be necessary to enforce the agreement.

The time spent in crafting a comprehensive settlement agreement is to not only get all the essential terms right, but also to make sure it is a contract that can be relied upon as enforceable by the parties, should the need arise.

1 comment:

Tom Bailey said...

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Great blog.