If you didn’t already understand how to protect your mediated settlement agreement from challenge, you do now.
But wait a minute! Is that what you want?
What if your client entered into the agreement only because its opponent made a material misstatement of fact? What if one of your co-defendants challenges your settlement agreement as not having been made in good faith, thus exposing your client to potential liability for indemnity or contribution? Can you win the "good faith settlement" motion without the testimony of the participants in the mediation?
In a comment on yesterday’s post, Los Angeles mediator Joe Markowitz noted that:
Parties are entitled to walk out of a mediation with a whole range of outcomes, from a completed settlement agreement, to a term sheet, to an oral understanding, to a promise to think over the other side’s last offer, to a promise to see the other side in court! As long as both sides understand what they are getting at the conclusion of the mediation session, there should be no basis for a malpractice claim for any of these outcomes. If the parties choose to use a term sheet with no language in it indicating that they have settled their case, they just need to understand that any party can renege on the deal after the mediation. In some cases, that may be what the parties want, to give them some time to think the whole thing over.
Joe’s comments put the emphasis in mediation advocacy back where it belongs — on the fully informed assent of the parties and on the strategic plans of litigation counsel.
So here’s yet another way to commit legal malpractice as a mediation advocate: don’t fully understand the implications of mediation confidentiality on the final resolution of your client’s dispute. I’ll just bullet point ways to protect yourself and your client below and ask others to chime in with their recommendations:
You’re a litigator. There are probably hundreds of ways to skin this particular cat. The keys are knowing and understanding the law of mediation confidentiality and thinking through all of the implications it might have on your clients’ rights or interests down the line. That’s what we litigators do and we shouldn’t abandon those strategic considerations just because we believe we’re settling this case for good and it will never come back to haunt us or our clients again.
Remember, you are in control of the process. If you don’t like mediation confidentiality, tailor a confidentiality agreement to suit your circumstances. You will, of course, have to "sell" your proposal to your opponent. The best time to do that might well be at the end of the mediation rather than at its commencement. By that time, your opponent is pretty darn committed to the resolution of the lawsuit. His client is already planning on ways he can more profitably spend his time and money other than on further litigation, attorneys’ fees, and court costs. The plaintiff is, I guarantee you, already spending the settlement monies or planning the celebration back at the office and wondering whether this might lead to the promotion he or she has been waiting for.
This is the complete interview by Robert Benjamin with Larry Susskind, a leading public policy mediator, filmed as part of Mediate.com's "The Mediators: Views from the Eye of the Storm"...By Larry Susskind