The Effect of Oral Settlement Agreements in Mediation
In August, the NJ Supreme Court decided Willingboro Mall, Ltd., v. 240-242 Franklin Ave., 215 NJ 242 (2013). The key point made clear by this case is that everything said during the course of a mediation is confidential and privileged — even the oral agreement to settle or the terms of an oral settlement. Thus, a handshake deal to settle a case at a mediation is unenforceable. Neither the parties nor the attorneys nor the mediator may testify in Court to the terms of an oral settlement reached in a mediation — not even the fact that the case was settled. All such testimony is barred by the privilege.
The obvious result is that it is unwise to leave any mediation thinking your case is settled, unless you have a written document setting forth the fact of settlement and the terms thereof and being signed by the parties or by their representatives (attorneys, insurance
Again, this is applicable to mediation settings only.