February 27, 2007

In the context of estate litigation, mediation, as well as pre-trial conferences, often leads to settlements.  The importance of carefully documenting a settlement should not be overlooked.  Where required, a Rule 7 motion (court approval of a settlement where a party is under a disability) will have the effect of forcing the parties to document their settlement by way of a supporting affidavit, proposed minutes of settlement, and/or a draft order.  As a result, the parties know exactly where they stand and what they can expect in the future.  While a successful pre-trial conference may result in a court order on the spot, such an order, if granted, usually indicates that the parties have simply settled without canvassing the terms.

Too often a settlement is not properly documented and subsequent problems inevitably arise.  It has been my experience that parties attending mediation or a pre-trial conference are anxious to leave.  They may be emotionally exhausted both from the day and from the litigation generally and suffering from financial fatigue.  In fact, the parties may have a hard time just being in the same room.  Counsel too becomes frustrated by a long and arduous day and when a settlement is finally reached are anxious to leave.  Counsel mistakenly believe that the matter can be “written up” at a later time.

In my view, failing to sign rudimentary minutes of settlement, or an outline of settlement, with comprehensive minutes to follow is a mistake.  Predictably later disagreements arise as to the exact terms that were agreed to.  It is my experience that drafting minutes of settlement, even rudimentary ones, inevitably raise issues that the parties did not initially contemplate or think to address.   It is therefore worth taking the time to draft minutes of settlement, or an outline of key terms, to be signed by all parties at the conclusion of a successful mediation or pre-trial conference.

Once drafted, it is my practice to have the client sign minutes of settlement rather than counsel.  This helps ensures that if a client tries to resile from the settlement at a later date, the client’s signature is clearly staring up at them (clients should read the minutes before signing).

Finally, once a settlement is reached and minutes of settlement signed, the parties should seriously consider bringing a motion to approve the settlement even if such a motion is not technically required.  The cost is well worth it.  There is nothing like the protection and blessing of a court order to ensure a harmonious future.