Mediation Settlements: Finality and Confidentialty

The legal battle over the ownership rights to Facebook ended last year with the 9th Circuit Court of Appeal highlighting two important aspects of settlements reached in mediations: (1) The short-form settlement agreements signed by the parties at the conclusion of mediations may be enforceable even if (a) they do not spell out and confirm all settlement details, and (b) even if intrinsic fraud in the inducement during mediation by a party played a role in procurement of the settlement; and (2) confidentiality rules applicable to mediation-related communications may operate to preclude any post-mediation remedy. The Facebook, Inc. v. Pacific Northwest Software, Inc., 640 F.3d 1034 (9th Cir. 2011). 

Along similar lines, the California Supreme Court held that a disgruntled party who alleged that they were improperly pressured into an undesirable settlement at a mediation was precluded from using communications occurring during the mediation to support a legal malpractice claim against their lawyer. Cassel v. Superior Court (2011) 51 Cal.4th 113.