By: Donald L Swanson
The American Bar Association published an article titled, “Draft the Settlement Agreement First,” by John Bickerman. [Fn. 1] The article begins with the following:
- “One of the most effective techniques I know and use as a mediator is to begin negotiating the terms of the settlement agreement before the joint mediation session.”
- “On the organizational phone call, I request that the defendant—the party paying money—draft and send a proposed settlement agreement to the other party at least a week before the joint session is scheduled to begin.”
- “Once approved by both parties, this will be the final document, except for the payment term.”
The article then identifies various advantages, including:
- Terms are much easier to negotiate before the parties decide on price;
- Hidden boulders are discovered;
- Negotiating the settlement agreement beforehand is efficient; and
- Circulating a settlement agreement sets a positive tone.
This is a fabulous idea!
Some Hard-Knocks History
In the early days of my mediator career, I asked the parties to do what the ABA article suggests—but with a twist. The twist is that I provided the attorneys a “Mediation Settlement Agreement” form (in Word format for ease of editing) to get them started, complete with the following:
- Case caption and names of the parties;
- “The Parties shall share the Mediator’s fees and expenses as follows: ____;”
- Mutual release language;
- “tax issues . . . relating to the terms and provisions of this Agreement . . . have been evaluated prior to execution of this Agreement”;
- “The terms and provisions of this Agreement are subject to approval of the Bankruptcy Court and shall have no force or effect unless and until such approval is obtained”;
- Confidentiality provisions; and
- A bunch of blank lines and blank paragraphs for the parties to add their own specific terms and provisions.
Back then, I am quite proud of myself on this, for being innovative and providing extra value. Back then, I even go so far, at the conclusion of the mediation session, as typing up settlement terms into the Agreement form, once mediated terms are agreed upon.
But then, I attend a mediator training course for continuing education and mention my extra value approach: i.e., providing the Agreement form and helping complete it. The reaction from the trainers is . . . let’s say, “not positive.” You’d have thought I’d robbed a bank or something.
They explain that a mediator should NOT be involved in preparing the settlement agreement document in any way.
Instead, they inform me, a mediator should tell the mediating attorneys that drafting a settlement agreement is their responsibility and that the mediator will not be involved.
So . . . I don’t do any of that any more.
It’s important to note that John Bickerman, in the ABA article quoted above, makes the correct suggestion: that the parties begin creating their own settlement document before the mediation session begins.
And that is a fabulous suggestion!
Footnote 1. The article says that John Bickerman is founder of Bickerman Dispute Resolution in Washington, D.C. The ABA published his article on December 16, 2017.
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