What Should be the Mediator’s Role in Documenting a Settlement Agreement?

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By: Donald L. Swanson

Conventional thinking (as I understand it) is that mediators should not have a role in preparing a settlement-terms document that concludes a successful mediation.

I’m suggesting that a mediator can/should have a limited-and-neutral role in preparing such a document.  Here’s why.

Some Ancient History

Its 25 years ago — or more.

I’m in a mediation session with a senior partner and a client. This is the first mediation session I’ve ever experienced — and I’m trying to figure out how it’s done.

The mediation lasts all day. And the case settles. By the end, everyone is tired and cranky.

Around 5:30 p.m., all attorneys are in the mediator’s office to prepare the settlement document. The mediator pulls out a single sheet of paper.  It’s a pre-printed form. It has: (1) a state court name at the top, with a blank for filling-in the specific court involved, (2) lines  for filling-in the case caption and case number, and (3) lines at the bottom of the page — presumably, for the parties’ signatures.  Otherwise, the page is blank.

The mediator pens-in the court name, case caption and number and hands the page to the attorneys to write-in the settlement terms. One attorney does most of the writing. An opposing attorney then makes hand-written edits, including carets with lines to the sides of the page where many words are added. Further edits occur. And then the parties sign the still-one-page paper. Copies are made and distributed to everyone.

As we prepare to leave the mediation, I’m looking at this newly-finalized document. I’m trying to follow the nearly-indecipherable penmanship and all the chicken-scratch lines.

–And I’m saying to myself: “Seriously?! This is how it’s done?!”

–What I’m seeing is a mess. It looks like scribbling everywhere. Some hand writing is barely legible. Edits are hard to follow.

–It’s sloppy. And this is a commercial case with lots of knotty issues and lots of money at stake.

Some Later History

Fast forward 15 years or so.

I’m in a mediation session with an associate attorney and a client.

The mediation lasts all day. And the case settles. By the end, everyone is tired and cranky.

Around 5:30 p.m., all attorneys are in the mediator’s office to prepare the settlement document.  The mediator pulls out a one-page form . . . and I swear . . . its the same form as the one from a decade and a half earlier: different mediator / same form.

I’m irritated.  First thing I say upon seeing it is, “We’re in Federal Court.” Whereupon, the mediator takes a pen, scratches out the state court info and writes the Federal Court’s name at the top of the page—while mumbling something like, “No big deal.”

Then the document-completion routine from a decade-and-a-half earlier is repeated—except that the mediator disappears after correcting the court name. We never see him again.

I know, I know.  It’s my own fault.  I should have come prepared with my own draft of a settlement document.  But still . . . shouldn’t the mediator have done something more?!

Some Mediator History

So, when I start working as a mediator, my first “innovation” is to prepare and distribute, in advance of the mediation session, a type-written settlement agreement form in an editable format.

This form contains:

–the court name, case caption, case number, names of the parties

–a recitation of some undisputed and neutral information about the mediation and disputes involved

–a bunch of blanks for filling-in the settlement terms

–a representation by all parties that they have evaluated the tax consequences of the settlement terms

–formal signature blocks with names of parties and attorneys typed-in.

Then I send this form to the attorneys, in advance of the mediation session, suggesting that they:

–correct any inacurate information on the form

–begin filling in blanks with draft settlement language

–start working together to fill-in the form, narrow the issues involved, and minimize the number of blanks that need to be completed by the end of the mediation session.

In my earliest experiences as mediator, I act as scrivener at the end of the session (I’m a darn-good typist) to help the attorneys put their settlement terms into the form I provided.  This seems to work well, and I like doing it.

–But then a continuing education instructor says I shouldn’t be doing this. So I stop.

Conclusion

But I still think it’s a good idea for mediators to prepare and circulate an advance settlement form containing basic-and-neutral information. And I especially think its a good idea to encourage attorneys to begin the session with an already-started settlement document — regardless of whether that document uses the form I provide or one they prepare on their own.

I’m not trying to buck conventional thinking on a mediator avoiding the role of settlement-terms scrivener.

But I am suggesting that a mediator should be pushing-the-edge on assuring that the document preparation function is being handled in a proactive manner and long before the session’s end.

Notably, when a preliminary draft is available, negotiations can center on developing language that fills in remaining blanks.  This helps create clarity in the negotiation process and assures that all important terms are included in the settlement document — and none forgotten.

 

2 thoughts on “What Should be the Mediator’s Role in Documenting a Settlement Agreement?

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  1. I just finished three wrongful termination mediation sessions. In one, the mediator did not hold the parties until a settlement agreement was prepared and instead prepared an Interim Agreement (I was not the mediator). One party’s counsel refused the language in the final settlement agreement which led to the settlement almost falling apart. I try to make sure the parties agree to the terms of the settlement, including which party has the responsibility to prepare the settlement agreement, before allowing the parties to leave the mediation session. This has generally kept me out of needing to get involved in resolving a dispute over the language in the settlement agreement.

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  2. One of the many things stressed by several speakers and trainers at the St John’s program was the usefulness of the pre-mediation statement in bullet format to be submitted by each party. These statements should contain all major and minor monetary and non-monetary issues. When taken together they may serve as an outline of for discussion. As things are checked-off, modified, deleted and added these statements form the basis of a settlement outline. As stated by Don, by the end of the day people are tired and cranky. The use pre-mediation statements as a place marker at the end of a session or an outline of settlement at the end of the mediation will help the parties focus. The mediator may also use it as a check list to assist the parties in the preparation of the final outline. Others may disagree, but I try not to draft the settlement outline or supervise its preparation. That said, I have facilitated its preparation by referring to my marked statements and asking the parties if they intend to add this or delete that. Directed preparation of a settlement outline or actual preparation by the mediator should be avoided. Doing otherwise may implicate the mediator in the event of “buyer’s remorse”.

    As for buyer’s remorse, I strongly recommend that the parties agree in writing that the actual documents will follow the outline as opposed to the common transactional practice of allowing the final documents to control. This won’t always be practical, particularly in large, complex, multi-party cases, but it is something to think about as a starting point. Breaking the settlement outline into discrete parts may allow this to work. When a settlement agreement calls for the preparation of many complex documents, the essential terms may be agreed upon, even when drafts require further discussion. In those instances, the parties may wish to agree that the a failure to agree on a language in a subsequent document will be deemed a breach of the settlement agreement and not a failure of a condition of settlement. In this regard the parties may consider putting a liquidated damages provision in the settlement agreement.

    If the parties are engaged in mediation by a judge, the judicial mediator should be prepared to allow the parties to place the outline on the record. Each party should testify under oath under examination by its own attorney regarding his/her/its acknowledgment of the settlement’s voluntariness, completeness, binding character, and understanding that the documents will conform to the outline. By binding character I mean that the deal as stated on the record is done with respect to the settling parties, subject to court approval on notice to parties-in-interest when required. Further, with respect to court approval, it should be stated that the settling parties have waived their right to object the settlement as presented.

    I also recommend, when possible and practical, that a mediation conducted by a private mediator be concluded in the same manner in open court. This may not work in all cases, but the parties should consider placing a provision to this effect in the proposed mediation order or agreement.

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