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It's The Law: Mediation Can Resolve Lawsuits

Question: I am involved in a lawsuit and my attorney tells me the judge has ordered our case to mediation. Can you explain mediation?

Answer: Mediation is a process under which a neutral mediator works with parties in a lawsuit in an effort to reach a settlement. The mediator does not issue a decision, but acts as a facilitator. Mediation does not end a lawsuit unless the parties reach a settlement agreement.

Under court rules, judges can order parties to a lawsuit to mediation. Although the judge may appoint a mediator, any party can object and ultimately the parties themselves may select a mediator or at least provide the judge with names of objectionable mediators to avoid.

Judges encourage mediation as a way of settling cases without suit. It is also advantageous to the parties, as they have some control over their own destiny.

Court Rules are designed to expedite the mediation process. A first mediation conference (which is usually the only mediation conference) is supposed to be held within sixty (60) days after the judge refers the case to mediation. Mediation is to be completed within forty five (45) days of the first mediation conference, unless extended by the court or agreement of the parties.

It is mandatory that a person with authority to settle all issues appear on behalf of each party. It is also mandatory that the attorneys be physically present at the mediation. The court can impose sanctions for failure to follow these rules, including an award of mediator and attorneys fees and other costs, so it is rare that a party fails to follow the rules.

It is my understanding that eighty percent (80%) of those cases referred to mediation are settled. That saves a lot of court time, but it does raise other issues. The settlement agreement may include the requirement that it be adopted as a judgment, court order or otherwise be enforceable by resort to the courts. That makes it important that all details be carefully considered and that a party at mediation is well represented. To help avoid misunderstanding or change of position, I always try to draft the settlement agreement and have everyone sign before we leave mediation. Otherwise, the parties run the risk of change of heart or change of memory.

The recent case of Rachid v Perez, explains the importance of a well-drafted settlement agreement.

In Rachid, a husband's estate and the widow were at odds based in part on a prenuptial agreement. A settlement agreement was reached at mediation, but the widow had second thoughts. She asked the court to set the agreement aside claiming she was uninformed or misunderstood significant facts. The trial court denied her request. The widow appealed, but got no relief.

The appellate court explained that a judgment following a mediated settlement agreement should only be set aside where it can be shown that the judge grossly abused the judge's discretion; a very difficult task. The court went on to explain that cases settled in mediation are especially unsuited to recision based on unilateral mistake.

In short, the court concluded that "buyer's remorse" is not a sufficient basis to overturn a settlement agreement.

It is important that you approach mediation with your attorney so that you are fully aware of the facts, applicable law and status of the case before mediation starts. Then, you can participate in mediation to reach a reasonable settlement and understand the risks of proceeding to trial as well as the possible benefits. You may not be completely happy with the settlement, but it does end the dispute. As one of my favorite mediators often says, "the definition of a good settlement is that each party is equally unhappy."

In the mediation setting, an ounce of preparation is certainly worth more than a pound of attempted cure.

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