A settlement reached in mediation becomes binding when it’s put into a written agreement and signed by both parties to end a dispute.
Mediation may help resolve a number of disputes issues but not all of them. This can give rise to an agreement (interim contract) that will become a part of the final agreement when all issues are settled. Again, for a partial agreement to be binding, it has to be put into a written agreement and be signed by both parties.
When the mediation results in a signed written agreement, it becomes a binding contract. If one side doesn’t honour it, the other side can go to court and have it enforced under contract law.
In terms of who writes the agreement, the mediator or either party can do it. No matter who writes it, each side has to review it, consult with a lawyer, and then sign it for it to become binding.
Note that mediators can’t provide legal advice. After the mediation, the mediator will generally write a memorandum of understanding that details what happened in mediation and what settlements/resolutions were reached. Both sides must read the mediator’s memorandum to correct any misunderstandings or other mistakes. The mediator may then be asked to write the agreement for parties to sign. Alternatively, one of the parties may draft the agreement and send it to the other side to sign.
Most of the time, mediation is held privately. This means what the mediator hears and what the parties propose and refuse must remain confidential. If the mediation fails and parties proceed to trial, the mediator may not be asked questions as to what happened in mediation.
If the mediation is an open, the mediator’s report or memorandum can be brought to court as evidence.
Dispute Resolution Reference Guide - Mediation
Ontario Mandatory Mediation Program