3 - Agreements for Future Mediation

Summary

Commercial contracts frequently contain mediation clauses requiring parties to mediate as part of a sequence of dispute resolution methods, where they progress from consensus to evaluative methods until resolution is reached. Careful drafting is required to ensure such clauses are effective and enforceable. The primary issues relevant to the enforceability of mediation clauses include severability, certainty, completeness, attempts to oust the court’s jurisdiction, additional policy considerations, certainty, waiver and remedies for breach of mediation clauses. While compliance with mediation clauses is not easy to determine, only the narrowest of requirements has proven workable in practice. Regional and international instruments covering mediation tend not to provide for the enforcement of mediation clauses. There is an international trend towards obligating legal advisors to discuss with their clients whether their commercial disputes are suitable for mediation, and policy in many jurisdictions is moving towards penalising parties where mediation is not given due consideration. Similar to mediation clauses, agreements to mediate require careful drafting to ensure enforceability.