The Mediation Agreement
December 30, 2022 –
Once the parties select a mediator, they should memorialize their agreement in writing. The basic mediation agreement is usually prepared or circulated by the mediator. This agreement should help the parties better understand the process and ground rules of the mediation, including, among other matters: the participants in the mediation; the mediator’s role and the procedure for the mediation; the facts concerning the disclosure of potential conflicts or waiver of conflicts; the payment of mediation and mediator fees; the confidentiality of the mediation process and the privileged nature of settlement discussions; a provision for the destruction of documents exchanged by the parties after the mediation is concluded. We consider these matters in further detail below.
- A statement identifying the participants in the mediation
It is important for the agreement to outline who is allowed to be present for the mediation and who has decision-making authority for the parties. For instance, the agreement should stipulate, “To maximize the effectiveness of the process, Participants agree that they shall have present at each scheduled mediation session the person with full authority to settle this matter and with capacity to reevaluate Participant’s position and authority to change position, if appropriate. Participants are encouraged to consult with the Mediator in advance of the mediation session to identify the most appropriate persons to attend the mediation session.” In addition, if the parties will be meeting remotely, that should be outlined in the agreement. For example, the agreement may have a clause stating, “This mediation session will take place via video conference.”
- A statement defining and distinguishing the mediator’s role
To ensure that the role of the mediator is understood by all parties, the mediator’s role should be outlined in the agreement. A typical provision outlining the mediator’s role might read:
“The Mediator’s task is to facilitate negotiations of the Participants, not to decide the matter for them. The Mediator shall serve in a professional capacity as mediator only, and not in any other professional capacity, e.g., as attorney. The Mediator shall offer no legal advice or opinions upon which the Participants should rely. Participants are encouraged to consult with their own professionals, such as attorneys or accountants, for independent substantive advice in areas where such advice is rendered by professionals. Any settlement agreement prepared with the assistance of the Mediator should be reviewed by each Participant’s independent legal counsel.”
- A statement outlining the mediation procedure
To aid in the parties’ understanding of the mediation process and what practices are acceptable, key points of the procedure should be briefly outlined. For example, a clause stating that the parties will meet jointly with the mediator and in separate caucuses, and that the mediator may terminate the process at any time.
- Disclosure statements
The parties should agree in writing that they have disclosed all necessary information to determine whether a conflict of interest exists with their chosen mediator. A typical disclosure statement might read:
“The mediator, each party, and counsel confirm that they have disclosed any past or present relationship or other information that a reasonable person would believe could influence the mediator’s impartiality and that no conflict of interest or appearance of a conflict of interest exists. If Participants are uncomfortable sharing information with other Participants, but might entrust this information privately to the Mediator, they are encouraged to do so. Sharing this information enables the Mediator to discover possibilities for settlement that Participants might not otherwise recognize, and to help generate settlement options (without disclosing any confidential information).”
- Statements of confidentiality and privileged settlement discussion
To promote open communication throughout the process, the agreement should include a statement confirming that all individuals involved in the mediation agree to keep all interactions and documentation relating to the mediation confidential.
The mediator may also insist on a provision that limits the parties’ ability to compel testimony or the production of documents by the mediator if a resolution is not reached.
In all events, the mediation agreement should include a provision making clear that all statements made during the mediation are privileged settlement discussions, are made without prejudice to any party’s legal position, and are inadmissible for any purpose in any legal proceeding as follows:
“The exchange of information or making of communications in the mediation process shall not constitute a waiver of: (a) the attorney-client privilege, (b) attorney work-product privilege, (c) the status of information as confidential, (d) the status of information as a trade secret. No information exchanged or communication made in the mediation process shall constitute an admission for purposes of any applicable rule of evidence. The fact that a statement or communication is made in Mediation does not, however, insulate an otherwise independently discoverable fact or independent admission from discovery or use as an admission in a later court or adjudicative proceeding.”
- A statement outlining fees and expenses
The mediation agreement should also state how much the parties will deposit and pay the mediator for his or her services, when payment is due, and how payment of fees should be split between the parties. A fee and expense provision may state, for example:
“The Mediator typically speaks with Participants, or their representative or counsel, by phone prior to the first mediation session. In addition, the Mediator may speak with Participants or their representatives or counsel, jointly or in caucus, by telephone between mediation sessions, or in follow up to mediation. Any time spent by the Mediator on the telephone is billed at the Mediator’s hourly rate set forth above. The Mediator may at times require advance payments against fees and expenses. The Mediator will refund any amounts not earned or expended.”
- A summary of the records provided
It is also advisable to include a summary of the documents provided to the mediator by the parties and stipulate that the documents must be destroyed within a defined period following termination of the mediation.
You can see sample mediation agreements here: JAMS Sample, Sample 2
CASTAYBERT PLLC has extensive experience representing clients and participating as an effective advocate for clients in commercial mediation. To see how CASTAYBERT PLLC can assist you in the mediation process, click here.
