Is my settlement agreement binding? You are having a dispute and have just completed a difficult mediation with the other side. Thankfully, after hours of discussion, you have managed to reach an agreement. It is not everything you wanted, but you believe the outcome is workable and better than going to court. Now the question is; how do you ensure the settlement agreement is binding?
Once a settlement is reached at mediation, the terms of the settlement will need to be put in writing in a formal Deed of Settlement. It is good practice for the basic skeleton of the agreement to be put in writing on the day of mediation, but it is usually not possible (or desirable) to complete a formal Deed of Settlement on the day of the mediation itself. This is because a Deed of Settlement is a substantial document, which takes careful consideration and time to draft properly.
At a minimum, the Deed of Settlement should cover the following areas:
- 1. It should state the terms of the settlement
- 2. It should specify how and when any monies are to be paid
- 3. It should state the extent of the releases to be given (e.g. are the parties releasing each other from all legal claims that they may have against one another, or are there specific claims that are reserved?),
- 4. If Court proceedings are on foot, the Deed should state the steps that are required to bring the proceedings to an end.
Once the Deed of Settlement is prepared and all parties are in agreement, the parties will need to sign the Deed. At that point, the settlement agreement is binding on the parties and will be legally enforceable.
If the mediation is completed as part of Court proceedings, then it may be necessary to obtain the Court's approval to the settlement agreement. This would be done by having the Court make Consent Orders based on what the parties have agreed. In this case, the parties would draft the Consent Orders and provide them to the Court for the Court's approval. Once the Court makes the orders by consent, the orders will have the standing of any judgment of the Court.
How Can Sharrock Pitman Legal Help?
The steps required to finalise an agreement reached at mediation need not be difficult, but it is important that they be done properly to ensure that your hard won agreement is legally binding.
Our law practice has nationally accredited Mediators who can conduct mediations. Simon Matters is accredited as a mediator by the Resolution Institute. For further information, visit disputeover.com.au.
If you are having a dispute or if you require a Deed of Settlement, please feel free to contact us on 1300 205 506 or complete the form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Simon is a Senior Associate of Sharrock Pitman Legal.
He is an Accredited Specialist in Commercial Litigation (accredited by the Law Institute of Victoria) and deals with Litigation, Mediation of Disputes, and Law for Charities & Not for Profits. For further information, contact Simon Matters on his direct line (03) 8561 3324.