This is the 10th article in this series on mediation advocacy. The ninth article, published October 5, provided tips on effective advocacy during caucuses. The article continued a scenario in which the parties, Widgetronics and DesignMetrics, entered into a contract containing a dispute resolution clause and became embroiled in a dispute over Widgetronics’ alleged wrongful termination of the contract. Counsel for Widgetronics and DesignMetrics have prepared their clients for what to expect during the mediation process and have discussed their negotiation strategy. Another pre-mediation task is preparing for settlement. This article discusses the kind of groundwork counsel should perform to be ready for signing a terms sheet or a settlement agreement at the end of the mediation session.
Preparing for settlement is as important as preparing for the negotiations and it can save valuable time and possibly avoid future disputes. All too often counsel do not think about, or come to the mediation with, documents that the parties can use to help them memorialize their settlement. The optimal time to begin drafting enforceable settlement documents is not after many hours of stressful negotiations. Absent a written settlement agreement or terms sheet signed by the parties or, in some jurisdictions, a settlement on the record transcribed by a court reporter, an oral settlement reached in mediation may not be enforceable. Even if the parties manage to prepare some form of a settlement document at the end of the mediation session, if they do not draft it carefully, or if they fail to include all the material terms, a court could refuse to enforce it.
