Building a Strong Mediation Agreement: An Example

Evaluating the Mediation Agreement

A mediation agreement is a document that signifies that two or more parties to a dispute have reached an agreement with respect to the resolution of their legal matter and have agreed to formalize that agreement. Generally, mediation is used within court order mediation programs in both domestic and civil matters. The Florida Supreme Court has provided for mandatory mediation in all civil litigation in the state, and mediation is frequently used when parties desire to mediate a lawsuit voluntarily. Considering the alternative of further litigation, settlement is more often than not the path of least resistance. Many judges will require mediation before they will hear a contested motion. Oftentimes, insurers will require mediation as a precondition to making a settlement offer. Given the benefits of avoiding the costs and risks associated with litigation and reaching an agreed resolution of a dispute, many lawsuits wind up resolving in whole or part by way of an agreement reached at mediation.
Mediated agreements are oftentimes drafted and reduced to writing after completing the mediation session, but the parties do not always have the time available during the mediation to draft the agreement on the spot . When this happens, the mediator will prepare "minutes of opening and closing mediation," which is a record of the agreement that the parties made at the mediation session. The mediator will include in these minutes the key terms of the agreement, and his or her role is that of a scrivener; the mediator does not make any changes to the written agreement during this process. After the parties have executed the minutes of opening and closing mediation, they are able to convert those "minutes" into a "settlement agreement." In this document, the parties include the material terms of the mediated agreement and incorporate the terms of the minutes of opening and closing mediation by reference. Full documentation of the agreement may occur by way of the incorporation of the written minutes of opening and closing mediation into the "settlement agreement." Other times, particularly in domestic cases, the mediated agreement will be in the form of a marital settlement agreement or other document.

The Essential Parts of a Mediation Agreement

A well-drafted mediation agreement will include the following essential elements:
Parties Involved: A list of the parties entering into the mediation agreement.
Issues to Be Resolved: Enumerating the outstanding issues for resolution sets forth what is being mediated.
Terms of Settlement: This should include all of the terms reached during the mediation, including any money to be paid. This should spell out exactly what is to be paid to whom, when the payment is to be made, and any conditions precedent to the payment. The agreement should specify how the money will be paid, whether in one lump sum or in installments, and whether there are any contingencies to be met that might change the payment, such as a tax liability to be paid, tax payments, debt payments, etc. It is also helpful if the agreement sets forth whether and how interest will accrue, both before and after the mediation agreement is drafted. If the mediation relates to custody or parenting time issues, the parenting plan should be attached to the mediation agreement.
Enforcement of Agreement: The mediation agreement should specify how the parties are to enforce any of its terms. For example, if one party fails to pay child support as set forth in the mediation agreement, the other party can go to court to seek help in enforcing the mediation agreement.
Confidentiality Provisions: A mediation agreement should specify that the terms and conditions of the mediation agreement are confidential. Often in a mediation agreement, the parties will state that nothing that was said during the mediation process is admissible in any court action. Sometimes the mediation agreement will provide that one party may be permitted to testify, not about what the other party said during the mediation, but to testify regarding a term of the mediation agreement. In that case, the mediation agreement will sometimes contain a carve-out provision so as to permit one party to testify regarding the terms of the mediation agreement.
Other key elements of a mediation agreement may depend on the nature of the issues to be resolved.

Advantages of Mediation Agreements

By their nature, mediation agreements (sometimes called mediation settlement agreements) are much less expensive than going through traditional litigation, both financially and emotionally. Mediation agreements can include mutually agreeable terms that the parties would likely not have considered if the matter were to proceed to litigation. For example, the parties can agree upon a short timeline for performance of obligations under the agreement, a structured pay-out schedule of damages, and any number of other unique arrangements and obligations to be met by both sides. Further, because mediation takes place outside the court system, it can be scheduled at times and dates that are convenient for both parties. Mediation can take place quickly once a common mediator has been selected. The confidentiality of the process, which may be part of the mediation agreement, is another benefit. Once the parties have settled, they will be hesitant to open up about prior negotiations. In fact, mediation agreements often include a confidentiality clause to encourage disclosure between the parties in order to bring about a resolution. Of course, the only time a mediation agreement is not confidential is when the mediator is called to testify in court about the negotiation process in order to better aid a judge in making a ruling about provisional issues (such as temporary alimony) or in order to enforce the mediation agreement after it has been signed.

How to Draft a Sample Mediation Agreement

The following is a basic outline of a mediation agreement that can be used to ensure that all parties leave the mediation with a clear understanding of their agreement. It is structured logically, and provides for binding mediation without implementing an additional contract. Use this as a template, but keep in mind that the parties make the agreement that works for them, and this can serve as a very good starting point.
Introductory Preamble. Parties (names and addresses of parties)
Clause 1. The Parties hereby agree to participate in a Mediation in order to attempt to settle their differences without resort to litigation or arbitration.
Clause 2. The Mediator will be (name, names, company).
Clause 3. The Mediation will be conducted at (address etc.) on (date & time) and at (date & time).
Clause 4. All costs of the Mediation will be split equally by the parties, unless otherwise agreed to.
Clause 5. The Mediator has no previously existing relationship with the parties, nor do any of the parties have any relationship with the Mediator.
Clause 6. The Parties agree that they will not and cannot hold the Mediator liable to any other party for the content of information provided by one party to the Mediator.
Clause 7. The Mediator has no duty to maintain confidentiality as between the Mediator and the parties.
Clause 8. Since the mediation is voluntary, at any time prior to execution of this agreement by the parties, each party has the right to terminate the process.
Clause 9. The result of the mediation will be the execution of a mutually satisfactory memorandum of agreement, creating obligations that are binding on the parties.

Frequently Used Mediation Agreement Clauses

A mediation agreement can be a simple or as complex as the parties and their circumstances dictate. While each mediator likely has their own style and preferred process, most will incorporate settlement terms, confidentiality and the role and responsibilities of the mediator themselves into a typical agreement. Each of these points is discussed below:
Confidentiality:
The parties consciously agree to keep the mediation terms confidential. This confidentiality may last indefinitely and between all parties , beyond just the mediator, unless agreed otherwise.
Settlement Terms:
The terms will typically set out the outcome of the mediation. This could include payment terms, settlement timelines, or any other terms that the parties agree on.
Mediator’s Role and Responsibilities:
A mediation agreement will often include a statement of the mediator’s obligations. For example, a mediator can include their responsibilities, such as a neutral third party, as well as what the mediation does not include and addressing any complaints.

Mediation Agreements: Legal And Ethical Considerations

Legal Requirements and Compliance
As parties seek the benefits of mediation, they must also be aware of the legal framework in which they are operating. Legal requirements can include knowledge of the jurisdiction, requirements for enforceability of the mediation agreement, licensing and regulation for mediators and other controls on professional practice.
To begin with, mediators should have knowledge and awareness of their local or national jurisdiction. For example, mediation is a highly regulated industry in many European jurisdictions, and there are strict controls on the use of the term ‘mediation’ and who can operate as a mediator. Accredited training courses must be attended in some countries, and only those who are accredited can be included on lists identifying professional mediators. This is not true in many other countries, including the US, where controls are more relaxed. In some states, lawyers are not obliged to have any mediation training in order to call themselves a mediator. It is recommended that practitioners have appropriate training, certification in mediation and experience. In the EU and many other countries, there are professional associations to whom accredited and certified mediators must register.
Even within the US, there are no federal regulation and no nationwide standards, adherence to are voluntary and are enforced on an ad hoc basis. There are however many State laws which do cover mediation. The Uniform Mediation Act (UMA) was approved by the National Conference of Commissioners on Uniform State Laws on 2002. The UMA provides a statutory framework promoting and supporting court-ordered and voluntary mediation to increase the effectiveness of dispute resolution. It is currently in force in 11 States, and has been recommended for enactment in at least another four. There are also state laws covering court-based mediation including the mediation of child custody issues and commercial disputes. Mediators themselves should conduct due diligence by checking the local rules in their own states or jurisdictions.
Mediation agreements require the consent of all parties and this consent is voluntary, otherwise the agreement is not enforceable. If not voluntarily agreed, an agreement will only be enforceable if it meets the criteria for an enforceable contract, including offer, acceptance and consideration. An oral agreement will generally be sufficient. However parties would be advised to make sure that the agreement is in writing. No particular form of written agreement is required, and there are many different models, including court forms. Consideration refers to the exchange of something of value such as a promise or payment. Consent must not be deemed to have been given as a result of duress or fraud. Other factors affecting the validity of an agreement include the competency of the parties, capacity, and the ability to understand the consequences. Deceptive practices used when persuading a party to enter into an agreement make it unenforceable, so full disclosure is required. Agreements are generally not dependent on formalities unless a mediating party chooses to rely on such a provision.
Mediation Practice is currently unregulated in Australia, with there being no licensing requirements or formal accreditation. The National Mediator Accreditation System is voluntary. Mediators may also be subject to the Federal Privacy Act and other privacy legislation.
In Canada, Alberta, Manitoba, British Columbia, Nova Scotia, Ontario and Quebec have legislated mediation quality assurance schemes based primarily on voluntary participation. In Ontario, there is a Certification Process for Mediators and Arbitrators. Practitioners should be licensed appropriately before attempting to act, and associations within these jurisdictions can provide knowledge and guidance.
In the United Kingdom there is no statutory regulation of mediation. Professional conduct is governed by professional bodies such as the Family Mediators Association, Civil Mediation Council and law societies. Mediators are subject to criminal law relating to fraud and assault. The Office of Fair Trading regulate commercial mediation, and may issue guidance on unfair commercial practices.
In Ireland, the Courts Service does not license or certify mediators. A mediation facility has been established in the Four Courts in Dublin. Parties voluntarily agree to use mediation facilities and are required to sign a form prior to its use.
More information can be found at mediationvic.org.au/article/content/what-legislation-regulates-mediation-in-victoria/; mediatorsnetwork.com/nc/news/#c1453; and canlii.org/en/ca/.

Mediation Agreement Example

The mediation agreement is a crucial part of the process, one that provides clear structure and succor for the parties to avoid any later misunderstandings about the outcome of the negotiation.
For this purpose, we have provided a simple mediation agreement template below. Your mediator may use or adapt this as necessary, but the fact that a written, described and agreed upon settlement has been memorialized and signed by the parties is key.
Because a mediation agreement is primarily a function of the nature of the conflict being mediated, the terms discussed and agreed upon, and any agreements that are ultimately developed, this template must be adapted to suit your unique circumstances.
However, mediation agreements usually include the following:
Agreement Bay:
MEMORANDUM OF UNDERSTANDING AND MEDIATION AGREEMENT:
Date: _______________
Name of Mediator: ______________
Mediated Party 1: NAME _______________
Mediated Party 2: NAME _______________
As to the issue(s) set forth in the mediation held on ______________, the parties agree in principle to resolve the issues on the basis described above; however, such resolution is contingent upon the drafting and execution of formal documentation memorializing the principal issues and principal results of the mediation.
The parties further agree that if such formal documentation is not completed within 30 days, then the parties will return for a follow-up mediation with the Mediator.

Effective Mediation Processes and Practices

Our first tip is to set an agenda and stick to it. Being organized prior to the start of mediation can go a long way to staying on track and focused. And while an organized agenda is important , participants also need to be flexible to allow for the unexpected to occur. The most well-organized mediation is bound to get derailed anyway when emotions unexpectedly rise during a facilitation of positions. Our second tip is to allow yourself (and all other participants) to have their voices heard. Sometimes the mere act of listening before responding sets the right tone for an effective mediation. Our third tip is to identify what is important to both you and the other participants. Our last tip is to not pick fights with the other party. Derailing the process through petty disagreements is never a good idea.