According to the state Supreme Court’s recent ruling, mediated agreements are not binding, and cannot be enforced, unless the terms of the agreement are detailed in writing and signed by both parties. If the mediated terms are too complicated to be drafted in one day, the mediation process will be continued for a short period, until both parties can agree to the written terms and sign the documents. Personal injury lawyers in New Jersey say that this new stipulation, known as the bright-line rule, will help enforce original agreements reached in mediation, and avoid escalation in court.
These new terms, made specific in Willingboro Mall LTD v. 240/242 Franklin Ave LLC, are meant to prevent litigation resulting from the mediation process. Although the mediated terms were not put in writing in this case, the court enforced an oral agreement reached through earlier mediation, and held both parties accountable for their previously agreed-upon arrangement.
In many cases, especially personal injury lawsuits, mediation is an efficient alternative to court, with both parties meeting an outside counsel to negotiate a solution to the dispute before it can turn into a jury trial. But when one party defaults on or rescinds their end of the agreement, mediated cases can quickly become lawsuits, often as a way to make the defaulting party pay their share, or honor their original contract. With these mediated agreements in writing, the court has a binding document that can be used to determine the proper course of action in these cases.
The mediation process is voluntary, with both parties participating, and usually splitting the cost. The neutral third party serves as a sounding board for both parties, offering no advice or consultation, but helping both sides come to a solution outside of court. Nothing that either party says during mediation can be used in later trials or discussions. Mediation is supposed to ease the burden on each party to follow legal procedure, and provides a space where each person can air their grievances without worrying about the legal repercussions.
Requiring a written document outlining mediated terms will be beneficial in personal injury cases, attorneys in New Jersey say. If the injured party agrees to settle a lawsuit through mediation, and receives a written promise from the offender, this can act as proof, should the offender fail to pay the amount agreed upon by both parties. Previously, later disputes over oral agreements would result in court hearings, with statements from both sides, as well as the mediator. The judge’s decision could only be based on this testimony, with no hard evidence.
Although the state has an established law, Rule 1:40-4(i), which requires mediated agreements to be made in writing, the current law does not require both parties to be sign. A 2011 judiciary-issued handbook—Mediator’s Tool Box: A Case Management Guide for Presumptive Roster Mediators—details the state’s Mediation Act, which allows a signed agreement to be proof that a mediated settlement was reached. Under these stipulations, an email or tape recording would be sufficient.
At New Jersey law firm Helmer, Conley, and Kasselman, P.A., the personal injury attorneys offer consultation and representation for anyone who has suffered injuries as a result of another person, and wishes to mediate a settlement.
