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For a long time, a mediation clause in a contract was primarily a non-binding encouragement to consult. However, according to the Supreme Court, depending on the wording, such a clause can actually require you to attempt mediation first before going to court. Ignoring this obligation can have consequences.
What is a mediation clause?
A mediation clause is an agreement in a contract stating that in the event of a dispute, parties will first attempt to resolve it through mediation before resorting to litigation. The idea is to resolve a conflict together first, with the help of an independent mediator—this is often faster, cheaper, and better for the relationship.
From non-binding to mandatory
For a long time, such a clause was viewed as a non-binding intention. The Supreme Court has changed that: depending on how the clause is formulated, it can entail a genuine obligation to first engage in mediation. A mandatorily formulated clause is therefore more than an encouragement.
The consequences of ignoring
If you go to court while a mandatory mediation clause stipulates that you must first attempt mediation, the judge may adjourn the case or declare you (temporarily) inadmissible. You will then still have to try mediation first. That costs time and causes delays — exactly what you wanted to avoid.
Pay attention to the wording
Whether the clause is mandatory depends on the wording. If you want mediation to be a truly mandatory preliminary phase, formulate this in a compelling and concrete manner. If, on the other hand, you wish to retain the freedom to litigate immediately, formulate the clause without obligation—or do not include it. Deliberately tailor the mediation clause to your wishes.
Frequently Asked Questions
Should I try mediation if my contract contains a mediation clause?
Possibly: depending on the wording, the clause may require you to attempt mediation first before you are allowed to litigate.
What if I ignore that obligation?
The judge may adjourn the case or declare you (temporarily) inadmissible, so that you must first attempt mediation.
How do I retain the freedom to litigate immediately?
By formulating the clause without obligation or by not including it. The wording determines whether it is mandatory.
A tailored mediation or dispute clause?
Our legal experts incorporate a suitable clause into your general terms and conditions and contracts. View our litigationteam or schedule a free consultation.
