Is Mediation Legally Binding?

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Posted on Wednesday, January 10th, 2024 at 9:00 am    

Personal injury lawyer at his desk, answering client question, Is mediation legally binding?

Mediation is an option to consider in a Chicago personal injury case when negotiations with the insurance company stall. According to the American Bar Association (ABA), in mediation, a neutral third party facilitates discussions between parties who are engaged in a dispute. You can however be informed and represented by a Chicago personal injury lawyer in your mediation.

You may have questions about the enforceability of mediation if this is an option you’re considering. Is mediation legally binding in Chicago? The answer depends on the outcome of the mediation process. For more information, contact Wallace Miller online or give us a call at (312) 261-6193.

What You Need to Know About the Mediation Process in Chicago

How does mediation work? The mediation process usually involves the following steps:

  • Introductions – The mediation process begins with all parties meeting at an agreed-upon location. They sign confidentiality agreements before the session begins. The mediator will introduce all the parties, the parties’ representatives, and themselves and then provide an overview of the process.
  • Opening statements – The parties involved in the dispute (or their representatives) will give opening statements. In a personal injury case, an opening statement may summarize how the accident happened, why you believe you deserve compensation, and how much compensation may be awarded.
  • Back-and-forth – The role of the mediator isn’t to encourage anyone to agree to specific settlement terms. A mediator’s role is to help you discuss your case more productively with the insurance company or liable party. They may fill this role by meeting with you and the other party individually. They can make suggestions that may help the parties come to terms. After you make opening statements, the mediator will meet with each party and present offers and demands so that you and the other party don’t have to discuss them directly. By presenting your arguments in this setting, you and the insurance company may negotiate more effectively.

An ideal mediation session ends with all parties arriving at a settlement agreement. The mediator may then draft an agreement for all parties to sign. The agreement will put the agreed-upon settlement terms into writing.

You are not required to sign a mediation agreement if you disagree with the terms. You can file a lawsuit and seek damages in court if mediation isn’t successful.

Is Mediation Legally Binding in Chicago?

Mediation is not legally binding in the sense that you don’t need to reach an agreement at the end of the mediation process. There is no legal requirement that you sign a mediation agreement if the other party doesn’t make a fair offer.

If mediation is successful, the agreed-upon terms don’t become legally binding until you sign an official contract. A verbal agreement isn’t enough for mediation to be legally binding. However, if all the conditions to make a legal contract are met, once the parties sign the contract, it is legally binding.

When Is Mediation Not Legally Binding in Chicago?

Mediation becomes legally binding when all parties involved sign the settlement agreement. Once this happens, either party can take legal action if the other fails to abide by the agreement.

There are rare circumstances in which mediation isn’t legally binding even after everyone has signed an official agreement. Mediation may not be legally binding if it’s determined that anyone who signed the agreement was:

  • Mentally incapacitated
  • Unfairly influenced or pressured
  • Otherwise legally incapable of entering into a binding agreement

If any of the terms of a mediation agreement aren’t legally enforceable, it might not be legally binding. A mediation agreement might also be unenforceable if it’s determined that any of the parties involved engaged in fraudulent misrepresentation.

These scenarios aren’t common. When signing a mediation agreement, assume that it is and will remain a legally binding document. Review it carefully to ensure you agree to all its terms before signing.

The Benefits of Mediation

Concerned client asking a personal injury lawyer, Is mediation legally binding?Mediation is an option to consider in a Chicago personal injury case for the following reasons:

  • Confidentiality in mediation – Mediation is a private process. A trial is public. You may opt for mediation if you want your case’s details to remain confidential.
  • Savings – Going to trial will cost time and money. Mediation is a more affordable way to potentially resolve your case. And note that there will be taxes on lawsuit settlements and awards.
  • Control – There’s no guarantee mediation will be successful. There’s also no guarantee a judge or jury will award damages at trial. Through mediation, you at least have the power to exercise some control over your case’s outcome.

In addition, mediation may be less stressful than other negotiation methods. Consider this if negotiating with an insurance company has become too frustrating.

Contact a Chicago Personal Injury Lawyer Today

A Chicago personal injury lawyer from Wallace Miller can handle negotiations with the insurance company on your behalf. We can also represent you during mediation if the insurance company doesn’t make a fair offer. We encourage you to check out our testimonials and settlements won. For more information, contact us online or call us today at (312) 261-6193 for your free case review by our legal team.

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