Perils of mediation — what solicitors need to know

The recent Court of Appeal decision in Frost v Wake Smith and Tofields Solicitors is a good starting point for reviewing the duties of a solicitor arising out of a mediation and the potential negligence actions and claims for wasted costs which could result from a breach of those duties.

Thiswas a claim made by a client against his solicitor arising out of a mediation that took place in 2003. The mediation concerned a long-running, wide-ranging and acrimonious dispute between two brothers, David and Ron Frost, who had been in business together for about 20 years.

Through the almost miraculous efforts of the mediator, an agreement was reached at the mediation. The brothers went out to dinner to celebrate, leaving David’s solicitor to draw up the settlement agreement. After dinner they returned and signed the agreement. Ron subsequently raised various objections to the agreement and the brothers ended up mediating on a second occasion. The dispute was resolved – well, except for the tax consequences of the agreement that the Court of Appeal noted were still unresolved – after an order was made for specific performance of the second settlement agreement in 2005…

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