Is commercial mediation legally binding?

Mediation is a voluntary process which takes place "entirely without prejudice" - meaning all discussions are informal and completely confidential.

However, whilst the discussions are not legally binding, civil and commercial mediations can pave the way for legally-binding agreements.

Rather than imposing a legal decision on either party, our specialist mediators place the focus of discussion on collaboration and resolution.

Now widely embraced as the most popular Alternative Dispute Resolution (ADR) method, mediation provides a structured but comfortable environment where people can talk openly and honestly.

With all of the talks facilitated by a neutral mediator, the voluntary nature of the discussions can often lead to common ground being found and a mutual understanding reached.

The discussions and offers made during mediation also cannot be used as evidence in any subsequent proceeding, should mediation fail to resolve the dispute.

Making settlements enforceable in court

Whilst mediation itself is not legally binding, the agreements that are often reached through its positive discussions can be legally enforced via a written agreement.

Often referred to as a Memorandum of Understanding (MOU) or settlement agreement, this legal document becomes a legally-binding contract, which is enforceable in a court of law, once it has been signed by both parties.

Typically drawn up and agreed upon by the solicitors or legal representative of each party involved, the document outlines the terms which have been agreed during mediation. To be legally binding, the terms of the mediation must be submitted and approved as an enforceable final agreement through the court system.

If no agreement is reached in mediation, the parties retain their rights to pursue other forms of dispute resolution – including litigation or arbitration. They are also free to re-enter mediation at any stage.