Settlement Agreements

by Tim Baldwin

In most litigation cases, the parties mediate to resolve the issues in their case. In civil cases, Montana courts almost always order mediation, so you really can’t get past this critical stage of litigation. A very high percentage of civil cases settle in mediation or through settlement negotiations. Settlement agreements are just like any other contract: when parties sign them, Montana courts deem them binding and can use their power to enforce them. Unfortunately, some do not read these agreements carefully and sign them even though the agreement may not protect their interests. Then, it is too late.

In the past week, I have had two people come to me to talk about settlement agreements they regretted signing. Their cases were different, but their reasons were the same: they didn’t pay close enough attention to the details of the agreement.

The reasons for inattention can be many. For example, some people get very nervous during these proceedings and may rush their decisions. Others may be so elated at the thought of resolving the case that they will do just about anything to conclude the matter. Others may misunderstand the mediator and take his word for a matter, not having actually read what the contract states. Regardless, the words of the contract control, so when you have questions about the terms and effect of the terms, you need to clarify them.

So, for parties who do not have attorneys, they should think hard about whether to retain an attorney for mediation. Montana law and ethics allow attorneys to represent clients on a limited basis. If the client did not have an attorney to represent him fully, he may have the ability to retain an attorney for the limited purpose of mediation. It is not a bad idea, since an experienced civil or criminal litigator should know what to look for in a mediation and settlement agreement. But you want to find an attorney who practices in the area of law to which your case relates.

Remember, the mediator cannot offer legal advice, so if you ask him questions that he cannot ethically answer, you assume the risk of making those decisions yourself.

Hiring an attorney on this limited basis may cost you a few hundred dollars, but if the matter is important to you, it may be worth the investment at such a critical stage of litigation. Otherwise, you may find yourself stuck with a contract you regret.

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