Mediation is Contract Negotiation. All the Contract Rules Apply - Plus the Court gets Involved. Can a Mediator Excuse a Party?
There are some recent blog posts about mediation, and those posts started me thinking about this common process. One post discusses a mediator’s authority to excuse parties from participating. This is a topic of great interest to any litigation attorney.
I’ve had clients that were only in a case because their name was listed on property to which they no longer had an interest. These clients were without any risk of a judgment against them, but a nominal party in the case notwithstanding. I call the mediator and say, we don’t need to be here, my client does not need to incur the attorney fees, or the client does not have any interest in the outcome. The mediator will almost always excuse the party because the party can’t affect the outcome or help move the process along. In fact, a party like this can stall the process and prevent a settlement.
However, the court has ordered the mediation. Can the mediator excuse a party when the court has ordered mediation? If the court cannot trust a mediator to make good judgments in the mediation process, then what good is the mediator? Otherwise, the courts don’t need to supervise this closely. After all, mediation is a contract negotiation, and it can get very complicated. But in the end it is a contract like any other – with the added overlay of court involvement.
Probably the only real difference is that once a mediated settlement is reached, and the parties dismiss their respective cases, usually with prejudice, the pressure of the original case is over. However, the parties can still litigate a new cause of action – breach of the settlement agreement.
The courts decision in the Perry case is something that should be considered. Does the fact that the mediator excused a party give another party with second thoughts about the settlement, a reason to challenge the settlement? In most cases it should not – the parties can always waive their rights, so this practice should not interfere with an otherwise valid settlement. The settlement agreement can also address this issue if necessary.
Gavin,
Thanks for mentioning my blog post about the recent Perry case from the North Carolina Court of Appeals. That Court had another interesting mediation-related decision that I wrote about in January. Here's the link: http://tinyurl.com/dhcrpr. I also wrote about some alternatives to mediation, like "neutral evaluation," in this post: http://tinyurl.com/cydl9y.
Mack Sperling