Louisiana Mediation Clauses
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FAQ
At its simplest, an ADR clause allows the contracting parties to agree that if a dispute arises, they will use an alternative form of dispute resolution (such as mediation) as a step prior to, or at least alongside, court action or binding arbitration.
Generally, mediation clauses are enforceable. However, mediation is essentially a consensual process, and a settlement is unlikely if one party is forced to participate. The mediation clause recognizes that both parties have considered, and are open to, the mediation process.
The non-binding nature of mediation means also that a decision cannot be imposed on the parties. In order for any settlement to be concluded, the parties must voluntarily agree to accept it. Unlike a judge or an arbitrator, therefore, the mediator is not a decision-maker.
Sample Mediation Clause The parties agree that any dispute or controversy, arising out of or in connection with this Agreement or any alleged breach thereof, shall be subject to mediation if all parties agree thereto.
If there is clear wording in the contract that provides for the survival of the dispute resolution clause in the event of termination, the courts will hold the parties to their contractual bargain and enforce the process.
If the mediation occurred as part of a lawsuit, the court can enter an order that encompasses the agreement's terms. If it was not part of a lawsuit, then the written agreement will be enforceable as a contract.
Arbitrator is given power to decide. Final and binding decision. Mediator has no power to decide. Settlement only with party approval.
The negotiations that took place in mediation stay confidential and cannot be used in court. If the Case Settles, there is usually a private written agreement. The agreement can include provisions for what happens if someone violates the agreement.
