Draft First, Mediate Later!

Drafting a complex settlement agreement or consent order at the end of a long mediation day is a pain in the neck! I know; I’ve been there after midnight scribbling away. Now, as a full-time mediator, I’m delighted to leave the tricky stuff to the parties’ lawyers. But, boy, is it frustrating for everyone to be waiting one, two, three (my record is six) hours for the lawyers to agree a draft and then take their clients through it line by line. One can easily lose the will to live. Not to mention the obvious: that complex drafting after an exhausting day is not a great idea. Mistakes creep in.

In my pre-mediation communications I always encourage the lawyers, as part of their preparation, to think about how a settlement might be framed in a written agreement, and to bring to the mediation an advanced draft which addresses matters they consider to be important. This has all sorts of benefits:

Firstly, it helps to flick your psychological switch from “adversarial” to “collaborative” mode. Focusing on settlement, rather than on how best to beat up the opposition, is enormously beneficial to the process. After all, that’s why we’re all there!

Secondly, it encourages you to look closely (often for the first time) at complex issues that might impact both negotiation and drafting. Are there any tax consequences? Tax issues are common, and you may benefit from a chat with your tax team or the client’s accountant. Will the settlement include the transfer of real property and the release of an existing charge? Will the lender agree? Will the settlement include a new charge to secure a debt? Is the first mortgagee’s consent needed? What form will the charge take? It’s no good simply stating that X agrees to give Y a charge in a form to be agreed: that’s an unenforceable agreement to agree. What is the extent of what is being settled? What about confidentiality? All potentially tricky stuff – especially with a blank computer screen after 6.00 pm.

Thirdly, having just spent ten hours of hard negotiation to reach a deal, the last thing you need is for it to evaporate overnight because the lawyers were too exhausted to tackle the drafting (other than non-binding heads) and somebody has had a change of heart. It is always best – if possible and prudent – to get a binding agreement on the day. By drafting first and mediating later you can make that happen.

So, when verbal agreement is reached, be the hero who plucks out a draft settlement agreement from your briefcase! Everybody (me included) will love you. Just don’t forget the laptop and printing facilities (believe me it happens)!

Alistair Pye