In a 2013 case, Willingboro Mall, Ltd. v. 240/242 Franklin Ave., L.L.C., the New Jersey Supreme Court held that settlement agreements must be in writing to be enforceable.
It was always good practice to capture the agreement in writing prior to leaving the mediation process. Now it is crystal clear a settlement has not been reached until it is captured in a writing or recording. In complex matters, it is not always possible to reach immediate agreement at the mediation table given the scope and specificity of the settlement terms required . In such matters, mediators should discuss the importance of “keeping a matter in mediation” until such time that can be accomplished.
Remaining in mediation while finalizing the settlement agreement makes sense from all participants’ perspective. The settlement discussions within the mediation process in New Jersey are usually afforded the additional confidentiality protections afforded by state statute (Uniform Mediation Act) and the court rules (1:40). An additional benefit is that a skilled mediator, who facilitated initial settlement discussions and is familiar with the facts and dynamics of the case, is readily available to assist the parties in reaching closure through shuttle diplomacy via phone or subsequent in person mediation conferences. Also, from a policy perspective the number of court referred cases resolved through mediation should be accurately reported so the court annexed mediation programs can be thoroughly assessed.
But most importantly, no one wants to leave the mediation process without a clear understanding of the status of the settlement discussions. Memorializing the settlement agreement is just the write thing to do.