Why Don’t All Mediators Draft Settlement Agreements?

There are two camps of mediators: those who draft agreements and those who don’t.

For those who don’t, they draft a list of settlement terms for the parties to take to their own (separate) attorneys to draft.

For those who do, these fall into two further camps:
– Those who draft if the parties are both represented; and,
– Those who draft.

Why?

Because Maryland Rules, law, and ethics opinions are all a bit murky, inviting inconsitency.

Maryland Rule 17-103 (which applies to court-ordered mediation, but is a useful reference point nonetheless) states that the mediator’s role includes “upon request, record[ing] points of agreement expressed and adopted by the parties”. The Committee Note further explains: “Mediators often record points of agreement expressed and adopted by the parties to provide documentation of the results of the mediation. Because a mediator who is not a Maryland lawyer is not authorized to practice law in Maryland and a mediator who is a Maryland lawyer ordinarily would not be authorized to provide legal advice or services to parties in conflict, a mediator should not be authoring agreements regarding matters in litigation for the parties to sign. If the parties are represented by counsel, the mediator should advise them not to sign the document embodying the points of agreement until they have consulted their attorneys. If the parties, whether represented or not, choose to sign the document, a statement should be added that the points of agreement as recorded by the mediator constitute the points of agreement expressed and adopted by the parties.”

The Committee Note does a couple of things:
– it refers to agreement in two contexts, without clearly distinguishing between the two but implying some meaningful difference; specifically 1) recording points of agreement versus 2) authoring agreements; and,
– it ties agreement drafting to practicing law.

For further discussion about agreements (a/k/a contracts), please read my post, A Contract By Any Other Name…Still a Contract.

So, what is practicing law?

Practicing law is defined as “giving legal advice”, “preparing an instrument that affects title to real estate”, “preparing or helping in the preparation of any form or document that is filed in a court or affects a case that is or may be filed in a court”, and “giving advice about a case that is or may be filed in a court.” Business Occupations & Professions §10-101(h). The practice of law is reserved for licensed attorneys. Business Occupations & Professions §§10-206, 10-601.

But, not all mediators are licensed attorneys.

How does practicing law coincide with drafting settlement agreements?

In a divorce, family, custody, or child support matter, a settlement agreement is submitted to the court and incorporated into a Judgment of Absolute Divorce, Consent Order, or other Court Order. So, a settlement agreement affects a case. Likewise, settlement agreements can affect title to jointly titled real estate, even if the drafter does not also draft the deed transferring title. Plus, the MSBA’s Committee on Ethics says drafting is practicing law.

Why limit attorney mediators?

While mediators are neutral and do not provide legal advice, agreement drafting involves word choices that can benefit or disadvantage one party over the other. In 2007, the MSBA’s Committee on Ethics issued an opinion (2007-19) that attorney mediators should not draft settlement agreements for unrepresented parties because the drafting of a legally binding document (as opposed to a non-binding term sheet or memorandum) shifts the attorney mediator’s role from scribe to practicing law.

It is well established that one attorney cannot represent both spouses in the drafting of a settlement agreement. Ethics Opinion 1992-17, Blum v. Blum (59 Md.App. 584 (1984)), and Hale v. Hale (75 Md.App. 555 (1988)). Ethically and legally. An attorney can, however, serve as a third-party neutral mediator to both spouses, pursuant to Maryland Rule 19-302.4. But that Rule does not comment or carve out an exception for an attorney mediator to draft any resulting settlement agreement. Which leaves the attorney mediator with Rule 17-103’s Committee Note, the ethics opinions, and cases discussed above.

So, what is the concern about having one person draft an agreement for one couple?

Besides divided loyalties and conflicts of interests between two clients, Blum v. Blum cautions that, “[w]hile such dual representation may not necessarily result in the setting aside of the separation agreement, it leaves the door ajar for what occurred here” – which was attempting to set aside the agreement.

What’s the best practice?

Until Maryland law or its Rules change, the better part of wisdom is for each party to be represented by his/her own attorney and for those attorneys to draft the agreement or for both parties to have any settlement agreement reviewed by their own separate attorneys. Settlement-minded attorneys recognize the importance of preserving mediated terms when drafting and reviewing the settlement agreement. They may also bring added value by enhancing the deal beyond, but in keeping with, the mediated terms.

This invites a durable agreement, which compliments with the goal of mediation – a lasting settlement.

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