It is not unusual for one of the parties to a mediated settlement to change their mind a few days or even weeks after a settlement has been negotiated at mediation. This situation is known as "settler's remorse".
In Morant v. Sun Life Assurance Company of Canada, the Plaintiff brought a motion to set aside a mediated settlement. Mr. Justice Daley dismissed the Plaintiff's motion and enforced the mediated settlement. He indicated that there was no medical evidence offered that would even suggest that the Plaintiff was medically unfit at the time of mediation or that she did not have the capacity to enter into agreements with the Defendants to settle the actions.
The Judge found no problem with the mediated agreement and said that buyer's remorse was not a good reason to reverse it.
At its highest, the Plaintiff had put forward evidence that she had a change of heart, or what could be described as buyer's remorse, approximately three weeks after the conclusion of the settlement. This does not constitute proper grounds for setting aside a properly concluded settlement.
The Judge emphasized that a Court would generally hold those involved in a settlement to its negotiated terms. The exceptions arise when the resulting agreement and settlement were unconscionable or fraudulent, or they involved misapprehension of a material fact known to the other party; the solicitor did not have authority; or there was an absence of the legal or mental capacity to enter into the settlement. If one of those terms is not present, then the settlement will be enforced.
This case serves as a reminder to lawyers to document the process. Every mediated settlement should be reduced to written Minutes of Settlement to outline specifically what terms the parties have agreed to. It is also prudent to complete a Full and Final Release which contains a paragraph indicating that the Plaintiff's lawyer has explained the details of the settlement. The Plaintiff should always be required to sign the actual Mediation Agreement which contains the terms of the settlement.
If the settlement is properly documented by written Minutes of Settlement which are signed by both the Plaintiff and her lawyer, as well as a written Release that specifies the Plaintiff has had independent legal advice, which will also be acknowledged by the Plaintiff's lawyer, then the mediated settlement will likely be enforced.
Lerners Insurance Defence Reference Library
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