Why is a Mediation Agreement important to the parties and the Mediator?

The mediation agreement forms the legal basis for the mediation and the basis for the appointment of the Mediator and the payment of the appropriate costs required to finance the process. The mediation agreement constitutes a formal legal contract. The mediation agreement is required to incorporate the following:-

1. The appointment of the Mediator.
2. The arrangements for the costs of the Mediator.
3. The requirements for confidentiality.
4. Provisions limiting the liability of the Mediator.
5. Provisions relating to the role of the Mediator and the type of mediation process to be followed.
6. Clauses relating to the process for changing the form of mediation process if appropriate.
7. Rules governing the procedure for the conduct of the mediation process.
8. The grounds upon which the mediation process may be brought to an end.
9. The Mediator will not be compellable as a witness and all documents held by the Mediator will be destroyed immediately upon conclusion of the mediation.
10. Specifying the form of “settlement agreement” to be reached if the mediation process is successful.

The mediation agreement provides the essential framework for the conduct of the mediation process. Failure to incorporate all of the above terms in an enforceable mediation agreement can lead to a substantial risk in the mediation becoming abortive. By executing the mediation agreement the disputants fully accept on a voluntary basis that they are investing funds and time in a process which has a serious and practical objective which could be to their mutual advantage. It clearly provides the assurance that confidentiality will be maintained. It also underlines the fact that the mediation process is an arrangement which they have voluntarily entered into and which has possible outcomes including a possible enforceable contract incorporating the terms of the settlement.

The mediation agreement enables the disputants to avoid areas of ambiguity and uncertainty and allows them to follow a set and predictable procedure. The mediation agreement also enables the disputants to control the costs.

Mediation agreements can incorporate a number of additional optional provisions including provisions for mutual disclosure of evidence between the parties and disclosure of principal documents to be set out in a core bundle of documents which should be made available to the mediator prior to the commencement of the mediation process.

From the point of view of the Mediator the mediation agreement is a critical document which provides the Mediator with the status required to conduct the mediation. Without the mediation agreement the Mediator has no specific legal status. The agreement provides him with the comfort that he has been duly appointed and it enables the mediator to follow a procedure which has been agreed by the disputants as recorded in the mediation agreement. It therefore provides for rules of procedure agreed by the parties which the Mediator can insist are followed. From the Mediators point of view the mediation agreement defines the disputants and their obligations to the Mediator concerning payments of fees. It also obliges parties to provide information to the Mediator in order that the Mediator can perform the mediation on the basis of pre-disclosed papers including mediation briefs and core bundles of documents. The mediation agreement can also provide the Mediator with the appropriate mechanism for converting the facilitative mediation process into an evaluative mediation process should it be necessary. The mediation agreement is important to the Mediator because it also provides appropriate limitations upon potential liabilities the Mediator may face and in some cases the provision of indemnities and immunities from future legal proceedings. The essential importance of the document to the Mediator is that not only does it provide the Mediator with authority to act but also a specific status of the mediation process. The mediation agreement will always be a point of reference should there be a dispute during the course of the mediation process with one of the disputants concerning the way in which the mediation process is being conducted.