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Is the agreement reached in mediation final and binding?

Final and binding

Agreements made at mediation are not final until every party has received legal advice. Since not all parties take lawyers with them to mediation, some mediated agreements are not made final at the mediation itself. Once every party has received their own legal advice, the settlement will be written up into a contract. That contract should contain certificates or statements from each party’s lawyer confirming that legal advice was given. Once that contract is signed, the commitments stated in the contract are binding. The contract may include a section called a release formally stating that the other party is no longer liable for the claims or allegations that were being pursued. If any party does not comply with their obligations under the contract, the other party can ask a court to enforce it.

Who writes the agreement?

The identity of the person who writes up the agreement recording the parties’ settlement depends on: the mediator’s practice; whether the parties are represented by lawyers at the mediation; and the complexity of the issues and settlement. Some mediators will write up the agreement. Even in writing up the agreement, the mediator will remain neutral and not offer legal advice to any party. Parties who sign a mediation agreement written by the mediator should still seek legal advice about it. The agreement will not be final until every party has had that opportunity.

If the mediation relates to an ongoing legal proceeding, additional documents may be necessary. If the settlement is intended to dispose of the proceeding, the parties may have to sign consents for dismissal and requests for certain court orders. Documents prepared for the court will be prepared by the lawyers, not the mediator or the parties.

Following the mediation session, most mediators send a letter to the parties and their lawyers. That letter or Memorandum of Understanding usually summarizes the agreement reached and identifies who is responsible for completing any outstanding tasks. The content of a mediator’s report will vary depending on whether the mediation is open or closed, as explained below.

Can there be a partial agreement?

Not every mediation results in the complete settlement. Some issues may remain outstanding. There are no obstacles to writing up a partial agreement. An agreement that reflects a partial agreement is called interim. The same comments made above apply to interim agreements. It is important when writing up an interim agreement to describe carefully the issues that are resolved while distinguishing them from the issues that are outstanding.

When writing up an interim agreement, there is one specific issue to consider: When will the interim agreement take effect? There are two possibilities:

  • An interim agreement can take effect immediately regardless of the final outcome of the outstanding disputes, or
  • It can take effect only when the full dispute is completely resolved

It is important that all parties have the same understanding of the effective date of any interim agreement.

What happens if the mediator’s report is never made into a final contract?

Some mediations are closed and others are open.

In a closed mediation, the mediator cannot later be asked to describe what occurred at the mediation session. In a closed mediation, the Memorandum of Understanding does not become a final contract. The Memorandum of Understanding merely states that an agreement was or was not reached. If an agreement reached at mediation collapses, the mediator will not disclose the details of the parties’ discussions at mediation.

In an open mediation, the Memorandum of Understanding may describe the various settlement proposals exchanged, accepted, and rejected. The mediator will not express an opinion about whether the proposals were fair or reasonable. If the settlement reached at an open mediation collapses, the parties in court proceedings can use the mediator’s report.

For legal advice regarding mediation or for help reviewing or drafting agreements following a mediation session, consult a lawyer.

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