The Court of Appeal confirmed that solicitors cannot be held responsible for parties not reaching a Settlement Agreement in Mediation. (Neither can mediators in our view.)
The Court of Appeal confirmed the ruling of the court below that the defendant solicitor owed no duty to ensure a final agreement is reached at mediation. Here is the case:
What happened was that the Settlement Agreement made at the mediation did not cover everything that needed to be sorted. Presumably the mediation ran out of time so as a result the mediator did not have sufficient time to ensure the agreement was SMART, (specific, measurable, appropriate, reasonable and timely) so negotiation needed to continue after the event to perfect it. The lawyer was sued for not ensuring the agreement was sufficient on the day.
There are several matters arising about this.
- Firstly that you cannot hurry a mediation conclusion. Everyone present needs time to challenge, check and ensure that the agreement being reached is going to work. Its not a good idea to rush.
- That no one is liable for the agreement not being reached. Its the responsibility of all involved to do their best to conclude it and in particular, mediation is about the parties taking control and responsibility for their own choices and decisions, in particular the issues that need to be resolved.
- There is no substitute for putting all the issues on the table and working through everything that needs to be solved on the day to reach an agreement that covers everything necessary.
- If something material is left out, an agreement can only be provisional.
- All the flesh needs to be on the bones if parties and their lawyers really want a settlement that works.
We often overrun on the timing of our mediations because it is so important to give the drafting, checking, reading, considering, challenging and finalisation of the Settlement Agreement sufficient time to make sure it truely does cover anything. We continually remind parties and their lawyers of the importance of doing this properly even if we do not charge the extra time because we can tell it is sometimes not valued.
Provided parties have the necessary full authority and are willing to settle, mediation can always achieve an agreement and how good that agreement is depends on how willing the parties and their lawyers are to put everything in issue on the table. Sometimes there have to be contingencies because lawyers and parties turn not knowing about something material. We often find that a Settlement Agreement needs and either or built in dependent on the unknown. There is no substitute for coming to a mediation well prepared and having thought through everything relevant.