One of the advantages of mediation is that the parties agree to their own settlements, unlike a trial, where a jury or a judge will impose their own settlement on the parties in a judgment.  But what happens when a party tries to either get out of a deal or go back to the court to try some related items?

Well, a Florida appeals court recently decided a case on this topic.  Robert and Terry Spring sued a medical transport company as a result of injuries sustained in an auto accident.  The parties, along with the respective insurance companies, attended a mediation in March 2006 at which a settlement was reached.  The Springs received $600,000 in compensation from 3 insurance carriers.

As is usual practice in a settlement, a general release, hold harmless and indemnity agreement was incorporated to release the suit.  The release read, “It is expressly understood and agreed that the acceptance of said consideration is in compromise of disputed claims, and that this General Release is not an admission of liability or negligence on the part of the released parties, but is made for the purposes of terminating the above-referenced dispute and preclude any litigation between the parties.”

After signing the final agreement, one of the insurance companies wanted to seek reimbursement of attorneys fees from another insurance company for their defense of the insured.  The trial and appellate courts both denied their claim, stating that: (1) in their general release they’ve given up all claims and did not make an exception for legal fees, (2) they had the opportunity to incorporate that exception into the settlement since they participated in it and (3) the plain language of the release rules.

So, the lesson here?  Understand what you are agreeing to and make sure you’ve taken all of your interests into account.