Enforceability of Mediation Agreements

0
349

By Kereti I. Usoroh

Training Officer, Abuja Chamber of Commerce Dispute Resolution Centre (ACC-DRC)

Mediation is a dynamic, structured, interactive process where a “neutral third party” assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. 

Mediation is a “party-centered” process. It is focused primarily upon the needs, rights, and interests of the parties. The mediator uses a wide variety of techniques to guide the process in a constructive direction and to help the parties find their optimal solution.  

Mediation Agreements are binding agreements between the parties so long as it meets the basic requirements. A mediation agreement is binding on the parties if the agreement:

(a) provides, in a conspicuously displayed statement that is in capital letters or underlined, that the agreement is not subject to revocation;

(b) it is signed by each party to the agreement; and finally,

(c) It is signed by a witness, if any, who is present at the time the agreement is signed. 

Enforceability of Mediation agreements

Parties have been settling disputes without court intervention for hundreds of years. However, the enforceability of settlement agreements is not a settled issue. This uncertainty could hinder a more widespread use of mediation, especially when the determination of a court is already universally accepted as enforceable. Mediation agreements are more likely to reflect what the parties want or are willing to accept because their beliefs and decisions can be incorporated into the agreement. 

The reality is that mediation, a voluntary process, operates in Nigeria similar to the system in America, where parties are referred to mediation as part of a national disputing culture that permits compulsory mediation. Since the enactment of the Alternative Dispute Resolution Act of 1998, in United States, which empowered federal courts to establish dispute resolution programs, party consent is not required for participation in mediation. State courts differ on the merits of compulsory mediation but in both state and federal courts, sanctions can be imposed for parties’ failure to participate in mediation or for their failure to participate in good faith.

In Nigeria, it is the duty of the counsel to advice his/her client to explore ADR Mechanisms including and not limited to mediation as contained in Rule 15 (3) (d) of the Rules of Professional Conduct for Legal Practitioners (2007). Most rules of Courts in Nigeria now mandate Judges to refer cases they believe can be resolved through mediation or other ADR mechanisms to Multi-Court Door Houses or ADR Centers. 

Whether a court of law will enforce a Mediation agreement is integral to the mediating parties. When one party breaches its undertaking, the aggrieved party may wish to hold the breaching party to the terms of the mediation agreement. Alternatively, many parties refuse to mediate because they do not want to devote time to drawing up a non-binding agreement. Therefore, a court’s approach to mediation agreements as contracts may clarify the questions surrounding the enforceability of such agreements. An enforceable agreement is beneficial because it assures disputants that their resolution in the mediation is final, and avoids the burden and expense of litigating the underlying liabilities and claims finalized by the agreement. 

If a party seeks to enforce a mediation agreement as a contract, it must meet all the elements of an enforceable contract. Some of these elements, such as mutual assent, consideration, compliance with public policy, appropriate authority, lack of mistake, and impossibility pose barriers to persuading a court to enforce a mediation agreement as a contract. Enforcement concerns should not prohibit treating mediation agreements as traditional contracts.

The Practical Phases of Mediation

Mediation can create an enforceable contract that will qualify an aggrieved party for an award of damages or specific performance upon breach. At the time of formation, special attention should be paid to the following areas of concern in order to establish all of the elements of a traditional contract:

-Ensuring a balanced negotiation so that undue influence, coercion and fraud do not taint the agreement;  

-Ensuring that each party has a good faith belief in all claims or defenses;  

-Ensuring that the rights of parties not included in the agreement are not infringed, and;  

-Ensuring that the liquidating damages clause does not penalize the breaching party.

Even if a specific agreement does not live up to all the traditional requirements of court enforceable contracts, disputes may still be resolved by mediation. Carefully constructed agreements incorporate incentives for accomplishing compliance, although the threat of later resort to judicial coercion may be forfeited as a bargaining chip. 

In conclusion, Mediation’s goal is to allow the disputants to resolve their problem and comply with their resolution. The challenge is to construct a mediation agreement that either the courts or the parties will enforce. 

LEAVE A REPLY

Please enter your comment!
Please enter your name here