At the End
| Author | Stephen Walker/David Smith |
| Pages | 183-191 |
11.1 Introduction
Eventually, one party will make a proposal that the other accepts. The mediator tells both sides and settlement, at last, is achieved. The job is done. Or is it?
The clients are usually relieved. Their legal representatives less so. They know that the paperwork has still to be drawn up and signed. In the meantime, clients can change their minds at any time.
11.2 Settlement agreements
11.2.1 Legally binding or not?
Under the terms of most mediation agreements, the parties are not normally considered to be legally bound until they have all signed a document recording the terms of the settlement. However, the High Court has held recently in the case of Abberley and others v Abberley [2019] EWHC 1564 (Ch) that heads of terms can be binding if they contain sufficient clarity for the court to infer the agreement between the parties. The fact that a mechanism for events to occur is not set out is not a bar to the heads of terms being enforceable if they contain the main items agreed at the mediation. This may suit the parties very well but if they do not want the heads of terms to be binding then it is important to include wording to make that clear, such as “subject to contract” (in jurisdictions which allow for this) or a clear wording that states that the heads of terms are not intended to be binding and the parties will make a separate binding agreement on the basis of the outline in the heads of terms.
The period until both parties have signed a document recording the terms of the settlement can be a dangerous and anxious time. This is discussed in Chapter 9, para 9.2.13.
Well-prepared representatives take a draft agreement to the mediation, even if it is only a template for a Tomlin order. They can fill in the details and let the other side comment on it.
184 Advising and Representing Clients at Mediation
11.2.2 Do not draft in committee
It is much better if one side draws up the first draft and then obtains comments from the other side. Drafting in committee is always difficult, and when there is time pressure after a hard day with tired clients who want to go home, it becomes even more difficult.
Usually, mediators are not involved in the drafting. They may become involved if the parties cannot agree on something, and a mini-mediation will then take place. It is rare but not unknown for a settlement to break down because the legal representatives could not agree on the wording. Clients are not usually happy when this happens.
11.3 Drafting the agreement
11.3.1 Improving the deal in the drafting
All negotiators know that the devil lies in the detail. At mediations, there is a great temptation to try to improve the deal during the detailed drafting, and lawyers are particularly prone to this temptation. However, representatives must remember that:
• The clients have agreed the settlement. In their minds, the deal is done and they just want the lawyers to record it.
• The clients are paying for their representatives’ time and if, as often happens, the mediation overruns the scheduled time, they are also paying for the mediator’s additional time.
• Souring relations between their respective clients by prolonged point scoring is not in anyone’s interests. It is possible to ruin a deal by trying to amend it in the drafting. Although sometimes, important subsidiary points which require the mediator’s attention and further discussions with both sides can be thrown up during the drafting process.
11.3.2 Drafting always takes longer than you imagine
Drafting and agreeing the final document always takes longer than people expect, even if it’s just a simple Tomlin order for the payment of a sum of money in one instalment by a certain date. However, there must be a limit. What possible justification can there be for spending 4 hours drafting a five-paragraph Tomlin order? There is none.
A more common problem is when the drafting is complicated and everyone is too tired to draw up the detailed documents. The parties want some evidence of the settlement and, if possible, finality. So, what do you do?
11.3.3 Are heads of terms a good idea?
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