Alternative Dispute Resolution Law

What Happens When An Agreement Is Made In Mediation?

Once the case is settled in a way that is agreeable to all sides, the mediator and/or parties will draft a document outlining the terms of the agreement and stipulating how it will be implemented. It may be circulated and edited further as necessary. As stated earlier, the outcome of a mediation is non­binding. Either side may reject a proposed settlement. If this occurs, the side objecting to the settlement may consent to work toward a new settlement, or it may give up and proceed to arbitration or litigation. It is important to note that mediated settlements are rarely rejected and mediation often leads to agrements that are more durable because the parties have participated in the process in which the agreements were reached. If both parties agree to and sign a settlement agreement at the conclusion of the mediation, the parties are bound to uphold that agreement. The settlement agreement is a contract; an action alleging breach of contract may be brought if the agreement is not subsequently honored. If litigation is pending, the settlement should be filed with the court so that it will be enforced without requiring a separate action for breach of contract.