After a dispute is settled at mediation, what happens if one side changes their mind?
The answer to this question is found in the leading Court of Appeal decision of Robertson v. Walwyn et al 1988 CanLII (BCCA). That case involved a claim against a firm of stockbrokers and one of its employees for negligence and breach of fiduciary duty. The dispute was settled at a mediation; however, the Plaintiffs changed their minds and refused to implement the settlement. The Defendants brought an application to the Court seeking to enforcement the settlement.
In changing their minds, the Plaintiffs said the settlement was unjust. The Court of Appeal in response said, “A completed settlement agreement is the same as any other contract. If the contract is valid and enforceable by ordinary principles of contract law… then the court, in the end, must give effect to it”. In short, a deal is a deal.
It should be noted that a settlement reached at a mediation does not mean one side agrees with the other side’s legal position. A settlement is the product of both sides recognizing the legal risks and costs of going forward to trial.
Once a settlement is reached, it is important that the settlement is written up in a document called the Minutes of Settlement. The Minutes of Settlement will typically address the following points:
1. payment of any monies and/or doing of certain acts;
2. confidentiality;
3. the continuation or ending of the business relationship;
4. the preparation of and signing of releases;
5. removal of any charges against property; and
6. the dismissal of the lawsuit.
A properly prepared Minutes of Settlement which is signed by all parties, will result in the Court determining that a settlement is enforceable.
