Parties in a commercial dispute reached an oral agreement in mediation, but the lack of a signed settlement agreement resulted in litigation. The New Jersey Supreme Court ultimately upheld the oral agreement, but established a requirement that future mediated settlements must be written agreements signed before the mediation ends. The Court noted that the plaintiff could have avoided enforcement of the oral agreement simply by relying on the confidentiality of mediation. Instead, the plaintiff engaged substantively, responding to certified statements by the defendant and the mediator about the content of the mediation, and later expressly waived the mediation-communication privilege while deposing the mediator, before finally seeking to assert the privilege. The Court noted that the mediator – a retired judge – breached the privilege in his initial disclosures about the terms of settlement. While enforcing the oral agreement in this case since the privilege was waived, the Court stated that signed written agreements would be required in the future, which also could be satisfied by audio- or video-recorded agreements.

Willingboro Mall, Ltd. v. 240/242 Franklin Avenue, LLC, No. A-62 069082 (N.J., August 15, 2013).

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