Chapter 21 - § 21.4 • MEDIATION AND THE DISPUTE RESOLUTION ACT

• Jurisdiction: Colorado

§ 21.4 • MEDIATION AND THE DISPUTE RESOLUTION ACT

§ 21.4.1-Generally

Mediation is defined in the Colorado Dispute Resolution Act, C.R.S. §§ 13-22-301, et seq.,as "an intervention in dispute negotiations by a trained neutral third party with the purpose of assisting the parties to reach their own solution." The statute addresses a series of alternative dispute resolution procedures, including mediation, arbitration, med-arb, early neutral evaluation, mini trials, fact finding, settlement conferences, special master, and summary jury trial.

§ 21.4.2-Settlement

The Colorado Supreme Court held in Yaekle v. Andrews,⁴⁰⁸ that:

Section 308 of the Act provides parties engaging in mediation with a method for turning a mediated settlement agreement into an order of court, but does not outline the only way by which a binding agreement can be formed.⁴⁰⁹

[S]ection 13-22-308 is not the exclusive means by which parties can form a binding agreement reached after mediation, but . . . section 13-22-307 protects as confidential those communications made in the presence or at the behest of the mediator. Thus, while common law contract principles are not suspended from operation during mediation, the evidence of contract formation during mediation other than final written and fully executed agreements is generally inadmissible.⁴¹⁰

Thus, C.R.S. § 13-22-308 does not abrogate the common law of contracts with respect to validity of settlement agreements reached in mediation. However, C.R.S. § 13-22-307 may prevent admission of the evidence needed to prove a common law agreement, because the needed evidence is privileged.

The court of appeals stated that the Yaekle decision addressed two issues:⁴¹¹

Section 308 of the Act establishes one way in which an agreement reached during mediation can become an enforceable court order. However, the Supreme Court also held that common law principles apply to determine whether negotiations or communications create an enforceable contract when they are not connected to specific mediation proceedings. As a result, the supreme court disapproval of Nat'l Union Fire Ins. Co. v. Price, 78 P.3d 1138, 1140 (Colo. App.). . . .

Section 307 of the Act creates a privilege against disclosure of communication, made in the presence or at the behest of the mediator.⁴¹²

§ 21.4.3-Ethical and Honesty Standards

Increasingly, issues are arising as to whether a settlement should be vacated or damages awarded because of fraudulent or negligent misrepresentation...