How to Create Mediation Agreement Templates that Work: A Guide
What is a Mediation Agreement?
A mediation agreement is a contract between two parties that are seeking to resolve a legal dispute in their own terms. Mediation is a great first step for parties looking to amicably work through a variety of legal disputes. Parties can find some common ground and hopefully resolve the dispute without the need for costly and lengthy litigation.
There is nothing worse than being dragged into a massive lawsuit that threatens the very foundation of your business. A simple breach of contract or another type of legal dispute can trigger large suits, often to the detriment of both parties. It is not uncommon for companies to become embroiled in years-long lawsuits.
Fortunately, mediation is the process of collecting a neutral party that will sit down with both conflicting parties and help them work through key issues. A mediation agreement is the final document in which two parties agree upon the terms of the settlement that they had just recently reached with the help of a mediator.
The primary purpose of any agreement is to successfully reach a settlement . All parties are asked a variety of questions as the mediator tries to figure out the best possible solution for all parties involved.
Since the mediator’s goal is to help both parties resolve their dispute, you can rest assured that the mediator will help construct a solution that will best serve your needs. A mediating agreement will include a variety of agreements that all parties are meant to adhere to. Two parties cannot reach an agreement if one of their main goals is being sacrificed. As such, this is the main document that will help you reach a settlement that is in the best interest of all parties involved.
A mediation agreement is an essential document that is used during the mediation process. It should be signed by you both and the mediator before the settlement can become legally binding. It is the last step in the mediation process and is one of the few tangible outcomes that come from the process. A mediation agreement represents a potential settlement. It will clearly outline the terms of the settlement and the goals of the agreement.
Parts of a Mediation Agreement Template
A mediator’s job is to narrow the issues, to create understanding and to foster goodwill in a way that has the potential to lead to a resolution. The mediator will ideally move the parties from positions of animosity and mistrust into a place where they can agree on how to resolve the problem, be it through another dispute resolution process or a settlement of the specific dispute. When this is done, it needs to be captured by way of a mediation agreement/settlement agreement that forms part of the record of the mediation.
There are some mandatory, basic requirements of all mediation agreements – these include clauses on confidentiality, decision-making authority, timelines. Other important terms will focus on identifying the issues at hand, possible solutions, how the deal was reached, who is responsible for implementing the various elements of the deal, and what happens in the event of a breach of the agreement.
The most common reasons to have a mediation agreement are:
- ensuring confidentiality;
- capturing maximum value from the mediation process;
- setting out a proper time frame within which the deal needs to be consummated; and
- creating clarity around the obligations of all parties involved.
How to Personalize Your Mediation Agreement Template
Once you’ve chosen the right mediation agreement template, consider how to personalize your template to the parties and the dispute. Most of the time, this customization will either be obvious or something you haven’t already anticipated in the clauses of the mediation agreement template. For example, cross-border cases may pose unique needs that should be addressed in a personalized mediation agreement. A well drafted mediation agreement prepares the parties for the reality of the unexpected during mediation. Here are some typical opportunities for customization: Location – In cases involving international parties or companies with offices in different countries, determining the primary place of action for the mediation is often an issue. To address this issue, many mediation agreement templates will expressly identify where the mediation will occur. A well drafted mediation agreement also allows for the mediation to change location at any time upon agreement by the parties, or to address unexpected circumstances such as changes in location of the parties’ corporate headquarters or other situations that make the agreed-upon location impractical. In any event, consideration should be given to the practicalities of travel time and/or costs when determining the location of the mediation. Language – It’s also important to identify the language for the mediation. Although English is often the most common language for international companies, it should never be assumed that all parties can negotiate a settlement in English. In these instances, the mediation agreement template should provide for the language in which the parties will negotiate a settlement, and that all documents used in the mediation will be translated for the parties’ convenience. Finally, parties should consider whether a designated interpreter is needed for the proceeding.
Legal Compliance and Considerations
The approach to mediation agreement templates can vary significantly across jurisdictions, the types of mediation being used, the applicable laws, and other factors, all of which raise legal considerations of their own. Compliance with the law is one critical issue. Another is ensuring that practitioners consider any relevant local practice requirements in order to meet applicable obligations and manage expectations.
Broadly, mediation agreements will usually need to consider other laws and regulations that apply outside of mediation, such as those relating to: Contract issues: Whether parties can legally exclude liability that might arise from the negotiation process of the agreement. Legislation: Certain sectors may be regulated by statutes that require specific agreements or that are compliant with certain procedures. News updates: Practitioners must beware of any new legislation or policy changes that may affect the mediation process and its outcomes. Industry regulations: Some industries may have ethical guidelines or codes of conduct that apply to the agreement. Global issues: The interplay between countries can lead to jurisdictional challenges when the mediation is international. Professional regulation: When a professional’s skills and expertise are involved in drafting the agreement, they may be required to comply with regulatory obligations. Often, with simple mediation agreements (such as those pertaining to single issues), practitioners can rightfully say that there is no legal requirement to include much of the information listed above. However, it is important for practitioners to check whether their sector is impacted by any of the above, which can be an ongoing challenge if the practitioner is registered in one jurisdiction but operates in another. This could lead to practitioners being tempted to avoid registering anywhere or registering in several places, which is not advised, to minimize their compliance burden. Practitioners should also consider how their approach may be impacted by the legal variations between jurisdictions. For example, a mediation agreement template that is based on English law is not necessarily enforceable in Michigan or Brazil. So it can be prudent to review or amend templates within a regular timeframe, perhaps every one-to-three years. In addition to ensuring the template complies with the law, it is advisable to ensure the mediation agreement template is suitable for any industry, to avoid having to create specific mediation agreement templates for every single organization, association, and sector. This could be done, for example, by developing a basic agreement template that can then be adapted to suit those needs. These particular legal considerations come into play even in mediation that is run by organizations and mediation providers. For a group that uses or publishes a standard agreement template, the code of practice could also be updated regularly.
Things to Keep in Mind When Drafting a Mediation Agreement
An experienced attorney should be enlisted to draft the mediation agreement. When drafting a particular clause, a lawyer is likely to spot the traps and pitfalls that could arise in the future should there be a problem with the agreement. The vast majority of mediations end in a written settlement agreement, with the help of an attorney, within just hours — sometimes minutes — after the mediation commences. The mediator may not be around later when it becomes necessary to reformulate the language. Simply put, having a lawyer draft the agreement may save thousands of dollars down the line.
Pay attention to the "whereas" clauses. If a general rift is described — and it usually will be — the language becomes important as the parties cannot claim surprise by any language contained in the clauses. To be absolutely sure, have the parties agree to and initial each whereas clause. Conversely, ensure the parties are not agreeing to something that has not been part of the case before mediation.
Legal rights should not be forfeited when resolving the case at mediation . For example, many clients refuse to waive their right to a personal jury trial, perhaps due to the potential for job implications should the other party not disclose their permanent impairments. In that case, it may be wise to waive the right to a jury trial on any issues formed during mediation only, but still preserve the personal jury trial on all other issues. This way, should the parties still find themselves at an impasse over the unresolved issue, they can get a fresh start, but neither party should be able to hold the mediation hostage with an ultimatum.
If the mediator recommends a special master or neutral joint expert, let the mediator try to get the parties to agree on an expert jointly, instead. In the technician vs. lay person dynamic, it is often hard for the lay person to trust that the expert will not take the technician’s side. Thus, it can be helpful to agree to the same expert rather than picking sides.
Everyone should get a copy of the final, signed mediation agreement. For purposes of collection in Georgia, the original signed document is needed. But every party to the agreement should have a copy. Having received a copy, the mediator should have no qualms about sending a signed copy to a court.
Typical Errors to Avoid
The first mistake that people make is failing to consider the specific needs and unique circumstances of their practice in drafting a mediation agreement template. Some common errors in mediation will arise just by default. For example, the assumption is made that attorneys are going to be involved in every case, therefore, the mediation agreement template is drafted including a provision making all fees and costs incurred by the mediator the responsibility of both parties. But when a client or a party is representing themselves they are not going to have the funds to pay the mediator because there’s no settlement, and they do not have the funds to pay the attorney’s fees which would not be owed until the matter is settled. In this situation, a mediator may make a strategic decision to discount his or her fees for the initial mediation session so that a settlement can be reached. If the template includes the mandatory language requiring both parties to split the fees, the mediator will likely spend time creating a separate addendum to the mediation agreement template requiring one party to pay less than half the fees and costs of the mediation. Or worse yet, the wildly unforeseen occurs and one party is required to pay all the fees and costs because a confidentiality agreement is breached in front of a third party witness or otherwise a final order adopting the content of the mediation agreement is signed by a judge without a finding of good cause. The cost to a mediator in terms of time and reputation is huge when the errors in the mediation agreement template does nothing to anticipate these types of scenarios.
Another typical type of an error would be, for example, the failure to include language not only making the initials and signatures of the parties binding, but also including the initials and signatures of the mediator and attorneys. The mediator’s and attorneys’ clients rely upon them to properly draft the mediation agreement on their behalf and whether or not the agreement is signed or adopted by a judge, they are held responsible through the attorney-client relationship and the mediator’s professional reputation can be damaged.
Sample Template for Mediation Agreement
While it is difficult to draft an all encompassing template due to the many issues that could be involved, it is possible to start with a basic framework in the following manner:
MEDIATION AGREEMENT
This Agreement sets forth the general understandings between the parties to be mediated by ___________________ in _______________ County, New York on ____________________.
1. THE PARTIES
The parties shall be:
[Full names of parties to be included. In a divorce, the format could be:]
________________ vs. _______________________________, Supreme Court, State of New York, County of ________________Docket No. ____________.
2. ATTORNEYS
Each party understands they have the right to be represented by legal counsel of their own choice at all times and will be advised if any document or closing table event is requested by the mediator. If either or both parties choose to be represented, or no representation is desired, a "Notice of Representation" should be signed by the party and the Negotiating Attorney, if any. (See Noticing of Representation Form below.)
3. STATEMENT OF ISSUES
The parties agree to submit the following issues to mediation:
[Note: The mediation may be for divorce or non-divorce matters such as drafting of contracts, creating family trusts, etc. This is a section where the issues are declared. The length of this section can be ad infinitum depending on the parties.]
4. CONSENT TO MEDIATE
The parties agree that participation in mediation is voluntary. Participation means:
A. That no one will be forced to settle.
B. That all parties will be free to withdraw from the mediation at any time.
C. Any agreement resulting from mediation will bind the parties only if they so choose.
D. Any other voluntary clause the parties wish to add.
5 . DISCLOSURE
The parties agree to provide full disclosure, in writing and/or orally, of all relevant facts and circumstances associated with the preparation of any potential agreement. Parties will also disclose to each other the existence of any prior divorce proceedings, Orders of Protection or Restraining Orders, and the Adoption of Children, if any.
6. AUTHORITY
The parties understand that all decisions are made solely by the parties. The mediator is here to help them negotiate their acceptable settlement or understanding of the facts. The mediator does not have special decision-making powers to resolve an impasse, nor does the mediator have any conflict-of-interest, or vested interest, other than the desire to end the dispute.
7. CONFIDENTIALITY
Mediation is confidential. As such, nothing said in the sessions can be used in court or outside the mediation process. All financial documents and other acts of goodwill necessary to come to a mutual agreement shall also be under seal thus preventing the other party from accessing those documents outside the negotiations.
It is strongly recommended that a "Confidentiality Release and Waiver" form be signed by all parties.
8. REPRESENTATION
The parties understand that the mediator has no legal interest or authority in any piece of property, custody agreement, business or assets, nor is the mediator representing one party over the other. Each party is urged to seek their own independent counsel.
[Note: Language needs to be included in the Agreement concerning the divorce; i.e., specific to the divorce action to be finalized in Supreme Court, or in Family Court for Child Support, i.e., specifically that this is NOT a final Agreement until the action is resolved (i.e. divorce granted; child support paid).]
97% of all divorce mediation cases have been settled or finalized if these agreements are followed.