Summary
This post explains why a mediation settlement isn't finished the moment both sides agree on a dollar figure — a late-appearing condition (a confidentiality clause, an indemnification demand, a required court approval) can determine whether the deal actually closes. It walks through how to identify that condition early, decide whether it's essential or just preferred, and time when to raise it with the mediator versus the other side. Closes with a CTA to work with OCL's litigation team on mediation preparation.
By: Jordan Gerheim, CEO – Outside Chief Legal LLC
Most mediations follow a fairly predictable pattern. Each side usually has a general understanding of what the other wants. A plaintiff may want compensation. A defendant may want to resolve the dispute at the lowest reasonable cost and on terms that protect the business moving forward.
But even when the parties are prepared, an unexpected issue can appear in the middle of the process.
One party may require a confidentiality agreement. A defendant may want the plaintiff to defend and indemnify it against future claims. A settlement may require property to be transferred, a separate agreement to be signed, or court approval before the resolution becomes binding and enforceable.
When that happens, there is an elephant in the room.
The elephant may not be part of the settlement number, but it can determine whether a deal can actually be completed. A settlement agreement is not truly complete simply because the parties agree on a dollar amount. The terms must also be practical, documented, approved when necessary, and enforceable.
The first step is to identify the issue clearly. What exactly is required to finalize the settlement? Is it an essential condition or a preferred term? Does a court, insurer, lender, board, agency, or another third party need to approve it? What documents, signatures, notices, or filings will be required? Who will be responsible for completing thhelpose steps, and how long will they take?
Once the elephant has a name, the next question is when to introduce it.
In most situations, it is helpful to discuss a significant unexpected issue with the mediator as early as possible. That does not always mean the issue must be immediately raised with the other side. A skilled mediator may have useful insight into whether it should be introduced at the beginning of the process, after progress has been made on the core settlement terms, or through a more limited proposal.
What matters is avoiding the last-minute surprise.
If the parties have spent hours negotiating and believe they are close to resolution, a new condition can feel like a change in the deal. Even when the condition is legitimate, raising it at the end of the day can create frustration, distrust, and more negotiation. The parties may have to revisit terms they thought were settled.
The goal of mediation is not merely to agree on a number. It is to reach a good and complete settlement.
At Outside Chief Legal, we help business owners and leadership teams prepare for mediation by looking beyond the immediate dispute. That includes identifying legal, operational, contractual, insurance, and business issues that may affect whether a settlement can be reached and carried out.
Our litigation team works with clients before, during, and after mediation to help them assess risk, prepare decision-makers, and pursue practical outcomes that support the business moving forward. Learn more at www.outsidechieflegal.com.
General information, not legal advice.
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Outside Chief Legal LLC is a modern, forward-thinking law firm serving as fractional chief legal officers and outside general counsel for businesses and their owners. With over 200 years of combined litigation, in-house, general counsel, and administrative legal experience, the firm delivers approachable, comprehensive counsel that blends legal expertise with practical business insight to help clients navigate ownership complexities with confidence. OCL is a trusted partner for founders, business owners, and leadership teams nationwide. Learn more about our firm, meet our team, or schedule a Risk-Free Strategy Session to talk with an attorney about how we can help your company.
