Download file as PDF - HFW

hfw.com

Download file as PDF - HFW

from sanctioned countries, evenif the settlement agreement itselfis acceptable within the sanctionsregime.A recent decisionIn a recent Court of Appeal decision,Mr David Frost v Wake Smith andTofields Solicitors (19 June 2013), aclient brought proceedings againsthis lawyer for failure to put in placean immediately binding settlementagreement following a mediation.The decision is of general interest asa reminder about conducting anddocumenting settlement negotiations.The dispute concerned, amongst otherthings, the ownership of real property.An agreement in principle was reachedin mediation. At least one of the partiesleft believing this agreement to bebinding on both parties. It was not.As the Court of Appeal commented,“much remained to be done, discussedWhen mediating or conducting other negotiations,it can be helpful to ask lawyers to draft a frameworkagreement in advance and to be on standby to finalisethe terms at short notice.and agreed before this agreementin principle could mature into anenforceable contract”. The terms wereuncertain and incomplete and didnot meet the formalities required fortransactions involving real property.The eventual result was that a secondmediation had to take place and afurther, much more detailed contractwas drafted and agreed. The delay,loss of goodwill and additional costsincurred may well have been avoidedif the parties had been aware thatthey had to reach agreement onall substantive points and observethe proper formalities, before theirsettlement would be complete andenforceable.The Court of Appeal expressed theview that “Mediation has proveda flexible and immensely valuableprocess of dispute resolution.”Parties should be aware of theconsequences of that flexibility beforethey embark upon the process. Giventhat mediations generally require aconsiderable investment of time,money and energy, documentingthe agreement at the end can bean unappealing prospect, even incommercial disputes. However, itshould be done wherever possible.When mediating or conductingother negotiations, it can be helpfulto ask lawyers to draft a frameworkagreement in advance and to beon standby to finalise the terms atshort notice.For further information, please contactEleanor Midwinter, Associate,on +44 (0)207 264 8013,or eleanor.midwinter@hfw.com, or yourusual contact at HFW.The delay, loss of goodwill and additional costsincurred may well have been avoided if the parties hadbeen aware that they had to reach agreement on allsubstantive points and observe the proper formalities,before their settlement would be complete andenforceable.ELEANOR MIDWINTERDispute Resolution Bulletin 03


Lawyers for international commerceHOLMAN FENWICK WILLAN LLPFriary Court, 65 Crutched FriarsLondon EC3N 2AET: +44 (0)20 7264 8000F: +44 (0)20 7264 8888hfw.com© 2013 Holman Fenwick Willan LLP. All rights reservedWhilst every care has been taken to ensure the accuracy of this information at the time of publication, the information is intended as guidance only. It should not be considered as legal advice.Holman Fenwick Willan LLP is the Data Controller for any data that it holds about you. To correct your personal details or change your mailing preferences please contact Craig Martinon +44 (0)20 7264 8109 or email craig.martin@hfw.com

More magazines by this user
Similar magazines