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The Enforcement of the Mediated Agreement
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The Problem * The process of mediation is a flexible and confidential procedure. The parties jointly develop a solution for their dispute by fair and structured negotiation. * Mediation has a voluntary nature, but the parties nevertheless want to ensure drawing up a legally binding settlement. * If the mediation is successful, a legally binding agreement between the parties in dispute is drafted. * The mediator is no party in this contract. * The development of the contract is based on the rules of freedom of contract and hence its content depends on the will of the parties. * The mediated contract can be enforced in all the ways typically to contracts: litigation, arbitration, contractual sanctions. * But: The settled agreement shall not to be mixed up with the mediation agreement in which the disputants and the mediator set the rules for the mediation itself. That is rather the first step starting the mediation process. It may therefore also be called a letter of intent. In the mediation agreement you can find the following items: * the names of the parties * the name of the mediator * the names of possible representatives/confidential persons during mediation: lawyers, accountants, psychologists, friends or family * a global prescription of the problem * the fact that parties try to solve this problem by mediation * voluntariness of parties: freedom to start but also to stop mediation at any time * privacy clause: obligation of secrecy; between party-party / mediator-parties * What if one party infringes the privacy clause? Sanctions? * parties have to keep the things that are said during the mediation a secret * parties don't do anything that can harm the mediation and its outcome * the fact that the mediator can be supported by a third person * the salary of the mediator and other costs * rights & obligations of parties and mediator * the applicable law on the mediation agreement * the fact that in case of a possitive outcome there will be drawn a settled agreement * No legal action as long as mediation has not been finished. * At what point may the mediation be considered to be failed? (setting of deadlines for parties to react, ...) * What happens if no settlement can be reached? (arbitration clause, taking legal actions, ...) * Shall be as detailed as possible to provide basic ground for possible legal actions. * The judge shall know what the dispute is about. That gives the judge the basis for interpretation & evaluation. * How/Where/With whom to continue if mediator fails to meet his obligations? (appointment and independence of neutrals) * What if one party demands a co-mediator? * What if more parties are affected? What if wrong party participates? * What if only one party drops out of the mediation process, but the others decide to continue? * contract penalties Issues * How should the agreement be drafted in order to ensure its power of binding the parties and thus, to ensure its enforcement? * How to make sure that the agreement cannot be ignored by one party and will be obeyed by all parties in dispute? Recommendations What may the recommendations be to conclude a legally valid contract under German and Dutch law? In General: * Each party of the mediation process has to be present. Is only one party missing, her consent must be obtained (written/oral) before the contract can come into effect. * All terms and conditions the parties agreed on should be summarised in the presence of all parties. Due Diligence must be complied with. * All terms and conditions should be best reduced to a written form. * The Agreement has to be signed by all parties. Furthermore: * The parties must be contractually capable or rightfully represented. * Misapprehension, threat, fraud and misuse of circumstances may lead to invalidity. * Terms and conditions must not infringe existing and prevailing law or public policy. * The text itself is not necessarily significant when it comes to interpretation. In fact the actual will and intention of the parties are decisive. * The contract is subject to plain and fair dealing as well as equitableness. * The agreement has to be provable. Since there is no law dictating a certain form, the contract may be concluded orally or written. Especially an oral contract is difficult to verify - neutral witnesses may be of importance. * If one party does not carry out her contractual duty the other party may ask the court on basis of the contract to enforce her rights. * As the mediated contract forms no executory title such as a court judgement the offended party needs to go to court first. If a contract contains an executory title the parties wouldn't need any assistance from a judge. It would enter into force from the moment the contract is signed. Yet, a court judgement which does have an executory title is only practicable from the moment the judge gives his verdict. * But the mediated agreement may be combined with an executory title. The contract hence has to be notarisated by a notary in order to function similar to a court judgement. * The parties may agree on a contractual penalty clause for the case of breach/violation of contract. * Cooling-off time (no proceedings) to allow reflection and further discussion. * Further meetings of sub-groups needed? * Example of a Settlement Agreement by the Centre for Effective Dispute Resolution, . Current Legislation EU-Mediation-Directive of 28 February 2008 (see The German Federal Ministry of Justice, ) * A new directive regarding mediation of civil and trade matters has been proposed and will be adopted by the European Parliament presumably in the middle of 2008. * It deals with cross-border mediation within the EU as a equal alternative to court proceedings. * Mediated agreements shall be enforceable in each EU Member State. * Legal claims shall not become time-barred during the mediation process. * To mediators generally the right to refuse to give evidence shall be granted. * The new directive may be adopted by the Member States. Literature * Mr. E. Schutte, Mr. J. Spierdijk, Dr. A.F.M. Brenninkmeijer, "Juridische aspecten van mediation", Den Haag, 2007, Chapters 2, 4 & 5. * Eileen Carroll, Karl Mackie, "International Mediation - The Art of Business Diplomacy", 2nd Edition, 2006, Chapter 4, Chapter 7, pp. 109 - 113. * Carrie Menkel-Meadow, "Dispute Processing and Conflict Resolution", 2005. * Nadja Alexander, "Global Trends in Mediation", 2nd Edition, 2006. * Gabrielle Kaufmann-Kohler, Thomas Schultz, "Online Dispute Resolution - Challenges for Contemporary Justice", 2004. See Also: * http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1265731 * How to deal with Enforcement * Enforcement of Dispute Resolution Outcomes See Also
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