Is Mediation Legally Binding?

Is mediation legally binding, is a question we get asked here at Effective Dispute Solutions from several of our enquirers. The short answer is yes and no, however this will depend upon what type of mediation services you have entered into, which will be also be dependant upon how any agreement (mediation settlement agreement) has been executed / and or recorded.

Is Mediation Legally Binding? Not always! 

There are certain types of mediation which are not legally binding, we shall consider all and explain the differences and confirm which types of mediation are binding, and those that are not.

Firstly, if we look at civil and commercial mediation which entails any type of civil or commercial dispute for example anything such as a breach of contract through to professional negligence. Whether or not court action has started, any civil or commercial mediation is entirely without prejudice and becomes legally binding once the parties have agreed a settlement of their dispute, AND it is deduced to writing AND then signed, until it is signed, the process is not legally binding.

Therefore if a party refuses to sign the mediation settlement agreement at the last second, for whatever reason, change of mind and so forth, then there is nothing to compel them to comply with the agreement even though they may have orally agreed to it, and the process remains none binding.

Once the parties have signed, that is when they become legally bound by any agreement and it will then become;
• A legally binding contract between the parties if court action has not started, or

• Drafted as a Consent or Tomlin Order if court action has started, whereby the court will need to
approve the same.

It is important to note the Mediator does not write the agreement but will assist in its drafting, and must be present throughout its drafting, check that it accurately records the intentions of the parties and must stay at the mediation until it has been finalised and signed by all the parties.

Is Mediation Legally Binding? Employment Mediation.

Secondly, employment mediation which looks at any type of employment dispute from unfair, constructive dismissal to whistle blowing, pay conditions and so forth follows the same suit as commercial mediation; however an employment tribunal will usually replace any court.