Mediation Message No. 28

ENFORCEMENT OF MEDIATION SETTLEMENT AGREEMENTS (PART II)

In Mediation Message No. 21 (December 2004), I observed that Fair v. Bakhtiari (2004) 122 Cal.App.4th 1457, in the absence of specific language that the parties intended their mediation settlement to be binding, had nonetheless given a very liberal interpretation to its enforceability where other language in the agreement indicated that the parties “in effect” wanted such a result. (The opinion held that the settlement at issue, which provided only that all disputes would be settled by arbitration, had complied with Evidence Code section 1123(b), which states that a written mediation settlement is an exception to confidentiality requirements if it “provides that it is enforceable or binding or words to that effect.” [emphasis added].)

Then, in Mediation Message No. 25 (April 2005), I advised that the California Supreme Court had granted review as to this decision. Two weeks ago, an article in the Los Angeles Daily Journal suggested that mediations may become an endangered species if the Supreme Court reverses the appellate court ruling in Fair v. Bakhtiari. Such fears, however, are simply not warranted.

It is highly improbable that the Supreme Court, which for many years has encouraged the use of alternative dispute resolution to both lighten court calendars and to simplify the litigation process (see, for example, Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 [recognizing the “strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution”]), would now abandon that policy. Instead, if Fair v. Bakhtiari is reversed, the Court will probably do nothing more than require the parties at mediations to state unambiguously their intent in any settlement agreement that it be enforceable. As a practical matter, it is my opinion that such language, to be iron-clad, should provide that “It is the intent of the parties, pursuant to both Evidence Code section 1123(b) and Code of Civil Procedure section 664.6, that all of the terms of this agreement are enforceable and binding upon them.”

(See Message no. 37 which discusses the Supreme Court’s subsequent opinion in Fair v. Bakhtiari.)

Copyright, Michael D. Marcus, November 2005

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