Negotiating or mediating your agreement – don't stop until it is legally binding
A recent English case at the Court of Appeal (Frost v Wake Smith and Tofields Solicitors  EWCA Civ 772) illustrates the need to spend the necessary time documenting precisely what has been agreed or, where that is just not possible, ensuring that those involved understand the need for further work to be undertaken to conclude an agreement.
The case involved two brothers, David and Ron Frost, engaged in a long-running dispute. They tried to separate their property and business interests and sought legal representation to negotiate and ultimately mediation to resolve the complexities. During this mediation, an agreement was reached in principle and the brothers left for dinner whilst David Frost’s solicitor sought to document the terms of the agreement, which was then signed by the Frosts on their return under the impression that it was a binding agreement because the solicitor had not pointed out otherwise.
The agreement was not, however, legally binding. It lacked detail leading to uncertainty as regards a number of the provisions, including the failure to accurately describe the properties, to deal with the property charges and the tax consequences of the agreement. When issues arose after the mediation, David Frost brought proceedings against his solicitor's firm, claiming negligence, inter alia, in failing to ensure that a legally binding agreement was reached at the end of the mediation.
It was held at first instance that the solicitor had not acted negligently or in breach of the retainer. It was acknowledged that, given the complexities of the case, production of a binding agreement was practically impossible. This was upheld by the Court of Appeal.
Click here for the judgment (especially paragraphs 28 and 33)