Mediation News

Preparing Mediated Agreements

SECTION 1. INTRODUCTION

Once parties to a mediation have reached agreement on some or all of the issues in dispute, most desire to memorialize their agreement in the form of a written document.65 Sometimes this document is entitled a "Memorandum of Understanding;" in other cases, it may be called a "Settlement Agreement" or a "Mediated Agreement." The purpose of this section of the Guidelines is to provide mediators with guidance on how to assist parties in committing their agreement to writing without contravening the Virginia UPL rules, mediator ethics, or in the case of attorney-mediators, the Virginia Rules of Professional Conduct. As with the previous chapter on legal advice, the Department of Dispute Resolution Services does not have the final say on what agreement preparation activities may constitute the practice of law. That determination is left to the Virginia State Bar, the Attorney General's office, or the courts.

SECTION 2. THE LEGAL CONTEXT OF MEDIATED AGREEMENTS

Supreme Court of Virginia Rule Part 6, § I(B)(2) provides that a person is practicing law whenever "one, other than a regular employee acting for his employer, undertakes, with or without compensation, to prepare for another legal instruments of any character, other than notices or contracts incident to the regular course of conducting a licensed business." Unlike Part 6, § I(B)(1) discussed in the previous section on legal advice, the above subsection of the rule does not require that a person prepare the legal instrument for compensation. Thus, even volunteer mediators who are not being compensated for their services are subject to the rule on drafting legal instruments.66 Furthermore, since most court-connected mediators are contracted by the Office of the Executive Secretary to provide services to the courts on a per case basis, they are not "regular employees" of the disputing parties and so cannot avoid the rule on that basis.

Finally, agreements prepared by mediators are probably not the "contracts incident to the regular course of conducting a licensed business" referred to in the rule. This particular provision was adopted by the Supreme Court of Virginia to address the preparation of sales contracts by real estate agents - a practice explicitly approved of by the court in Commonwealth v. Jones & Robins, Inc.67 Unlike real estate agents, mediators in Virginia (even court-certified mediators) are not licensed. Mediators do not have to pass a licensure exam, nor is licensure mandatory to practice the mediation profession. Moreover, in the real estate profession, sales contracts, which include a provision for the agent's commission, are necessary to insure that the real estate agent receives compensation for his or her services. In the mediation context, it could be argued that written agreements resulting from the mediation are not required for mediator compensation.

However, in Jones & Robins, Inc., the Supreme Court of Virginia was concerned that prohibiting real estate agents from preparing sales contracts would run counter to their long-standing practice of providing this service, would be impractical, and would be detrimental to the real estate business. These same concerns would also be evident if mediators were denied the ability to prepare written agreements for disputing parties. Although it is possible that a court could construe a mediated agreement as a "contract incident to the regular course of conducting a licensed business," mediators would be prudent not to rely on this provision in order to claim an exemption from the UPL rule.

Despite the Supreme Court of Virginia rule prohibiting laypersons from preparing legal instruments, the Virginia mediation statutes refer to the preparation of written agreements by non-attorney mediators. In defining the various terms used in the dispute resolution chapter of the Code of Virginia § 8.01-576.4 states that "'dispute resolution services' includes screening and intake of disputants, conducting dispute resolution proceedings, drafting agreements, and providing information or referral services" (emphasis added). Furthermore, § 8.01-576.11 contemplates that written agreements would emerge from mediation sessions by providing that such agreements are "enforceable in the same manner as any other written contract." Finally, in defining misconduct by neutrals, § 8.01-576.12 states that upon the motion of a party, a court "shall vacate a mediated agreement reached in a dispute resolution proceeding" if the neutral fails to inform the disputants in writing of certain specified information (emphasis added).

Thus, while the Virginia mediation statutes appear to authorize the preparation by mediators of written agreements that may be enforceable as contracts, contracts are legal instruments, and the Unauthorized Practice of Law rules from the Supreme Court of Virginia prohibit non-attorneys from drafting legal instruments. To further complicate matters, the Virginia State Bar has authorized attorney-mediators to act as scriveners in committing mediated agreements to writing.68 However, the State Bar's Legal Ethics Committee has cautioned attorney-mediators that if they provide agreement-writing services beyond those of a scrivener, then they have engaged in the practice of law.69 Moreover, a conflict of interest would arise under the Virginia Rule of Professional Responsibility 2.10 (e), which states that "a lawyer who serves or has served as a third party neutral may not serve as a lawyer on behalf of any party to the dispute."

It appears that the Virginia mediation statutes, particularly § 8.01-576.4, authorize non-attorney mediators to prepare written agreements for disputing parties so long as they, like attorney-mediators, limit their drafting services to those of a scrivener. This harmonizing of the UPL rules and the mediation statutes gives mediators the flexibility to assist the parties in committing their mediated agreements to writing but stops short of allowing mediators to draft instruments in which they include legally operative terms not requested or contemplated by the parties during the mediation process. Allowing mediators to prepare written agreements for the parties facilitates the efficient resolution of disputes and minimizes the costs to the parties, who may not desire or be able to afford their own attorneys.

This approach is consistent with the conclusion of the State Bar's Legal Ethics Committee that "to the extent that the [lawyer]-mediator is engaged by the parties as a scrivener of the agreement reached during the mediation process, such tasks do not constitute the practice of law."70 Likewise, when non-attorney mediators act as scriveners for the parties in committing their mediated agreements to writing, they have not engaged in the practice of law. However, like the Legal Ethics Committee, the Guidelines on Mediation and UPL Committee also believes that non-attorney mediators have engaged in the practice of law if their agreement preparation activities extend beyond acting as a scrivener for the parties.

A broad reading of § 8.01-576.4 would place no limits on the agreement writing activities of mediators and would essentially allow them to practice law when drafting written agreements. However, such a construction of this statute would render inoperative the entire mechanism for regulating the practice of law in the context of mediated agreement preparation. Although § 8.01-576.4 has not been construed by Virginia's appellate courts, the Committee on Guidelines on Mediation and UPL does not believe that the Virginia legislature intended this broad interpretation of the statute. Therefore, these Guidelines take the approach that both attorney and non-attorney mediators may act only as scriveners of the agreement. The Guidelines that follow help define what is meant by that term of art.

SECTION 3. ROLE OF THE MEDIATOR IN PREPARING WRITTEN AGREEMENTS

* Acting as a scrivener, a mediator may prepare settlement agreements and memoranda of understanding for the parties.

The Code of Virginia states that mediated agreements are legally enforceable as contracts.71 Whether a contract is formed between disputing parties when they reach an agreement to settle their dispute is matter of state contract law. Generally speaking, however, a contract is formed whenever each party agrees to a settlement and promises that something will or will not be done for the benefit of another.72 Thus, the particular form that a written agreement takes does not necessarily determine its enforceability as a contract. Documents entitled "Memoranda of Understanding," Settlement Agreements," or merely "Agreements" may all be enforceable if they meet the conditions for the formation of contracts under the laws of the Commonwealth of Virginia.

Regardless of the document's title, mediators in Virginia are permitted to assist the parties in committing their agreement to writing. A mediator may take an active role in preparing the agreement for the parties if they want the mediator to perform this function. The mediator may simply copy the agreement as dictated by the parties or may choose particular words or phrases to include in the agreement so long as the parties indicate that the language chosen by the mediator accurately reflects their desires. A mediator is also free to ask questions of the parties to clarify their agreement and may properly raise issues for their consideration. Likewise, a mediator may assist the parties in organizing their agreement by, for example, creating subsections in the document and placing the subsections in a logical order.

Mediators who prepare written agreements for disputing parties should strive to use the parties' own words whenever possible and in all cases should write agreements in a manner that comports with the wishes of the disputants. Mediators should not use language that one or both of the parties do not understand, and they should always allow the parties to review the written agreement carefully and make any changes that the parties believe are appropriate. As the Code of Virginia73 and the Standards of Ethics and Professional Responsibility for Certified Mediators74 require, mediators must always inform the parties in writing that mediated agreements should be reviewed by independent counsel before they are signed or that the parties should waive their opportunity for independent review.

* Unless required by law, a mediator should not add provisions to an agreement beyond those specified by the disputants.

Mediators are most likely to run afoul of UPL or ethical rules in drafting agreements when they attempt to include provisions in them that are not contemplated or requested by the parties themselves. In drafting settlement agreements for the parties, mediators should avoid the use of legal "boilerplate" and legal terms of art. These terms have legal consequences resulting from judicial interpretation and may favor one party over the other. The use of such terms may affect the parties in unintended ways and should be avoided.

Below are some examples of phrases or clauses that if included by a mediator in a written agreement may increase the likelihood that the Virginia State Bar, the Attorney General's office, or a court would view the preparation of the mediated agreement as the practice of law. Most of the examples are standard contractual terms used by attorneys for specific purposes and may be inappropriate for mediators to include in written agreements.

Merger Clauses

A and B agree that this Agreement contains the entire understanding between them and that no additional agreements regarding marital property rights have been made. They agree that this Agreement is a full and complete settlement of all property rights between them from the time of their marriage until the date of this Agreement.

A and B agree that any and all previous agreements regarding marital property rights are hereby superceded by this Agreement and that this Agreement contains the entire understanding between them.

Binding Effect Clauses

All provisions of this Agreement shall be binding upon the respective heirs, next of kin, executors, agents, assigns, and administrators of the parties.

Choice of Law Clauses

This agreement is made under and shall be governed in all aspects by the laws of the Commonwealth of Virginia.

Remedies Clauses

In the event that either of the parties to this Agreement commits a material breach of the Agreement, the party in breach agrees to pay the non-breaching party's attorneys fees and other reasonable costs associated with the breach.

Severability Clauses

The parties agree that if any part of this Agreement shall be deemed legally defective, inoperative, or unenforceable, the remaining portions of the agreement shall continue to bind the parties and shall remain in full force and effect.

Although mediators should not ordinarily, on their accord, add the above terms to mediated agreements, they may include the concepts embodied in them if requested by the parties. Section E of the Standards of Ethics and Professional Responsibility for Certified Mediators states that consistent with the self-determination of the parties, a mediator may raise issues for the parties to consider. In the agreement context, § J of the Standards makes clear that a mediator may suggest options for the parties to consider when reaching an agreement. Thus, a mediator is not precluded from raising issues or suggesting options to the parties, but the mediator may not add provisions, particularly boilerplate provisions, to a written agreement that the parties themselves have not fully explored and requested. If the parties ask a mediator to include a provision in the written agreement like one of those listed above, the mediator should use plain language and should avoid legal terminology or terms of art with which he or she is not familiar.75 Not only does legal boilerplate increase the likelihood that the preparation of the agreement will be considered an impermissible activity, but boilerplate may favor one of the parties over the other and thus may constitute a violation of mediator ethics.

In some cases, a statute or a court may require that a certain provision be included in a written agreement. For example, § 8.01-576.11 of the Code of Virginia states that a court order which incorporates a written agreement involving the support of a child must include the statutory child support guidelines worksheet and any written reasons for deviating from the guidelines. This particular provision contemplates that mediators may complete child support worksheets and mandates their attachment to a subsequent court order. Thus, mediators who complete these worksheets for the parties have not prepared a legal instrument and have not engaged in the practice of law.76

Similarly, § 20-124.5 provides that as a condition for granting any custody or visitation order, a court must require any party to the agreement to give 30 days written notice of an intention to relocate. This code section allows courts to dictate the form that such notice must take, and many courts require that the 30 day relocation notice provision be placed in the custody or visitation order itself. Consequently, in order to have a mediated custody agreement incorporated into a court order, a mediator may be required to include the 30-day relocation notice provision in the written agreement. A mediator who includes a standard relocation notice required by a local court in a mediated agreement has not engaged in the practice of law.

* Mediators may use a court-approved form when preparing a written agreement.

A mediator probably would not be found to have engaged in the practice of law by utilizing a court-sponsored or approved form when preparing a written agreement for the parties. Generally speaking, the preparation of court orders is considered the practice of law.77 However, it is standard practice for some courts in the Commonwealth to provide agreement forms to court-certified mediators that contain the appropriate language and signature lines to either order the dismissal of the court case pursuant to the agreement or, in some cases, to convert the agreement itself into a court order. Using such forms probably does not constitute the practice of law by mediators. Even if it does, the practice is authorized and supervised by the courts and presumably carries less risk to the public than normally associated with laypersons preparing court orders.78

* A mediator may include standard provisions in written agreements relating to the mediation process itself.

If a mediator deems it appropriate, he or she may include provisions in a written agreement that are intended to provide information to the parties about the mediation process. For example, provisions stating that the mediator does not give legal, financial, or tax advice may be included. Provisions that explain confidentiality79 or which state that the agreement may affect legal rights or that encourage the parties to have the agreement reviewed by independent counsel80 are likewise permissible. In essence, provisions that are designed to inform the parties about the mediation process and which are not part of the substantive agreement between the parties may be included in a written agreement prepared by a mediator.

SECTION 4. CONCLUSION

Mediators are neutrals whose function is to help parties resolve their disputes. If parties to a mediation agree to resolve their dispute, part of a mediator's role may be to help them put their agreement in written form. When parties are willing and able to write their own agreement, self-determination is maximized. However, some disputants may prefer that the mediator memorialize the terms of their agreement and others may view the preparation of a written agreement as a natural extension of the mediator's facilitative role.

The Guidelines in this chapter allow mediators in Virginia to take an active role in preparing written agreements for disputing parties if the parties so desire. Mediators may assist the parties in framing the terms of their agreement, they may help them choose appropriate words or phrases, and they may provide an organizational framework for the agreement. The Guidelines allow mediators flexibility and prohibit only the addition by them of terms that do not make up part of the agreement between the disputants or that may have unanticipated legal consequences. Following these Guidelines should help protect mediators from charges that they engaged in the practice of law or unethical mediation practice in preparing mediated agreements.

If you decide to retain a mediator in Tennessee and begin the mediation process, Contact our Tennessee Mediaton Lawyer now!

	Did You Know?
	The mediation process may vary depending on the mediator. Generally, mediations commence with a general session with all parties, counsel and the mediator. At the general session, there will be a discussion of the case, the issues on appeal and other matters important to settlement. Then the mediator will meet separately with each party and their counsel in separate "caucuses." In these separate sessions, the mediator will seek to foster negotiations between the parties and develop agreement.