Mediation is required by most Florida courts prior to trial. Parties sometimes attend mediation intending to “check the box” and have little hope of reaching a mediated settlement agreement. Yet, over 80 percent of cases resolve at mediation or shortly thereafter. This can leave counsel and their clients unprepared at the end of a long, but successful, mediation when it comes to documenting settlement terms. Below are some important legal and practical considerations when entering a mediated settlement agreement.
Insist on Written Agreement signed by Parties and their Counsel.
In state court, rule 1.730(b) of the Florida Rules of Civil Procedure provides that a settlement reached at mediation must be in writing and signed by all parties and their lawyers. The Second District Court of Appeal held in Parkland v. Henderson, 350 So. 3d 484 (Fla. 2d DCA 2022), that a settlement agreement reached during a court-ordered mediation is unenforceable unless signed by all parties and their counsel. Likewise, a mediator cannot report the existence of an agreement to the court unless it has been reduced to writing. See MEAC Opinion 2012-09.
If your client wants to reach an enforceable agreement at mediation, insist that it be reduced to writing and signed by all parties and their lawyers before the mediation adjourns. After a long day of mediation, it can be tempting to leave with a verbal consent to certain settlement terms and an understanding that the parties will prepare and sign a formal agreement in the following days. Under Rule 1.730(b) and Parkland, however, the resulting agreement would be unenforceable. Make sure the parties and their counsel memorialize and sign an agreement with all essential terms before leaving the mediation. The signed agreement can contemplate the exchange of additional documents; however, the key terms should be included. In Zoom mediations, DocuSign or a similar platform can be used to reduce the agreement to writing in a remote context.
Prepare a Draft in Advance.
Your client may have terms that are critical to making a settlement agreement work. If so, come armed with a draft mediated settlement agreement or release. Preparing a draft in advance will help you make sure all important terms are included in the final version. Parties and their counsel are frequently tired by the end of a protracted mediation. Having a draft of key documents prepared in advance can help a blurry-eyed lawyer and client from forgetting a key term, avoiding typographical errors, or inadvertently including language that may not be aligned with their interests.
Allocate Sufficient Time for Follow Up.
Mediated settlement agreements where key terms are reduced to writing at mediation frequently require the additional preparation and execution of ancillary documents. In a personal injury context, a more thorough release approved by the insurer may be required. In a business context, ancillary documents may be more complicated and include a license agreement, lease agreement, operating agreement, partnership agreement, employment agreement, or the like. Sometimes, the “devil is in the details” when it comes to these agreements, which frequently need to be reviewed by additional lawyers, C-suite executives, or operations personnel. Allocate sufficient time for the parties to exchange drafts so that everyone is able to meaningfully review resulting agreements. Include a written term specifying that the documents will be exchanged within a certain time frame so that all parties have a reasonable expectation of when documents will be exchanged and, ultimately, finalized.
Include a "Return to Mediation" Clause.
Following mediation, parties sometimes divert their attention to more pressing business or personal matters and lose steam in finalizing settlement terms. This can cause others to become frustrated and decide to back out of the deal reached at mediation. Alternatively, in more complicated business negotiations, parties may have other disagreements arise regarding the terms of ancillary documents. Consider including a Return to Mediation clause in your mediated settlement agreements. With more complicated cases, the mediator and parties may even agree to resume mediation on a day and time (say 30 days from the initial mediation) to meet again in an effort to iron out any sticking points and get things back on track.
In conclusion, achieving a hard-fought settlement after a long day of mediation can leave parties and their counsel tired and ready to adjourn. Avoid the temptation of leaving without a written agreement signed by all parties and their counsel memorializing key terms. A little advanced planning can pay big rewards when helping clients reach enforceable mediated settlement agreements.
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