The Court of Appeal has ruled on a solicitor’s duty at mediation, in Frost v Wake Smith reported 19 June 2013.
A party to a mediation complained that his solicitor had failed to ensure that an agreement made at the end of a long mediation was legally binding.
The parties had agreed, in principle, on how to divide up what had been their joint interests in a complex series of companies and properties. However the agreement was unenforceable as it was insufficiently detailed, certain companies needed to be parties, and the requirements in the Law of Property (Miscellaneous Provisions) Act 1989 were not met.
The Court praised the mediator for performing “a small miracle” to get an agreement in principle, and found that it was not part of the solicitor’s retainer in this case for him to ensure that a legally binding agreement was signed at the conclusion of the mediation.
Indeed to get to that stage took yet another long mediation.
The court stated:
- “Mediation has proved a flexible and immensely valuable process of dispute resolution. No doubt in some situations immediate and binding agreement is possible, whereas in others … flesh will need to be put upon the bones. It would be regrettable if any decision of this court were to cause practitioners to approach the process of mediation with anything other than maximum flexibility…”
The court went to say that solicitors must of course make their clients aware of the status of any agreement reached.
It is always disappointing, in the very few cases where no final settlement is reached, to leave a mediation without a signed legally binding agreement, and we know from experience that an agreement in principle can unwind in the course of drawing up a formal document, even if it is being done on the same day. However, it will be of comfort to solicitors that the court has made this eminently sensible decision, which recognises and emphasises the importance and value of mediation.