Is mediation legally binding, is a question we get asked here at Effective Dispute Solutions from several of our enquirers. The short answer is yes and no, however this will depend upon what type of mediation services you have entered into, which will be also be dependant upon how any agreement (mediation settlement agreement) has been executed / and or recorded.
Is Mediation Legally Binding? Not always!
There are certain types of mediation which are not legally binding, we shall consider all and explain the differences and confirm which types of mediation are binding, and those that are not.
Firstly, if we look at civil and commercial mediation which entails any type of civil or commercial dispute for example anything such as a breach of contract through to professional negligence. Whether or not court action has started, any civil or commercial mediation is entirely without prejudice and becomes legally binding once the parties have agreed a settlement of their dispute, AND it is deduced to writing AND then signed, until it is signed, the process is not legally binding.
Therefore if a party refuses to sign the mediation settlement agreement at the last second, for whatever reason, change of mind and so forth, then there is nothing to compel them to comply with the agreement even though they may have orally agreed to it, and the process remains none binding.
Once the parties have signed, that is when they become legally bound by any agreement and it will then become;
• A legally binding contract between the parties if court action has not started, or
• Drafted as a Consent or Tomlin Order if court action has started, whereby the court will need to
approve the same.
It is important to note the Mediator does not write the agreement but will assist in its drafting, and must be present throughout its drafting, check that it accurately records the intentions of the parties and must stay at the mediation until it has been finalised and signed by all the parties.
Is Mediation Legally Binding? Employment Mediation.
Secondly, employment mediation which looks at any type of employment dispute from unfair, constructive dismissal to whistle blowing, pay conditions and so forth follows the same suit as commercial mediation; however an employment tribunal will usually replace any court.
Thirdly, family mediation divides into two categories, family disputes over property, probate and so forth and divorce and separation. For family disputes for anything other than divorce or separation any agreement committed to writing and signed will be either be a binding contract between the parties or a Consent or Tomlin Order.
Where the mediation concerns a divorce or separation any agreement committed to writing and signed is known as a Memorandum of Understanding which simply states what the separating parties have agreed on terms of finances, access to children and so forth, however the Memorandum of Understanding is NOT legally binding, it can only become legally binding once the parties have taken it to their solicitors who will advise the parties on how to turn it into a legally binding document and draft the same for them.
Is Mediation Legally Binding? Difference Concerning Workplace & Community Mediation.
Workplace and community mediation are not legally binding, unless the parties intend it to be. Workplace mediation as the name suggests deals with any time of workplace dispute, such as bullying, harassment, personality clashes and the like, where as community mediation deals with mainly neighbour disputes over a wide range of issues such as noise, parking, pets and so forth.
In such types of mediation where an agreement is reached, it will still be recorded and deduced to writing, however it is rarely ever signed, and is considered to be more of a gentleman’s agreement, an agreement of honour, where the parties want the agreement to be binding they must state this and include this in any agreement that they make and sign the same.
In the case of a breach of any legally binding mediation agreement then the parties can sue the other party for the said breach, whereby this shall usually be a straight forward breach of contract, and or breach of any Consent / Tomlin Order.