New Requirements for Creating Enforceable Settlement Agreements in Negotiation and Mediation

A recently amended version of Code of Civil Procedure Section 664.6 establishes new requirements for creating a settlement agreement in negotiation or mediation that is enforceable as a judgment. This new statute is important for all individuals participating in mediation.

The amended procedure for enforcing settlement agreements is effective as of January 1, 2021. Code of Civil Procedure Section 664.6 now allows lawyers who have received expressed authorization to sign settlement documents for clients after concluding negotiations or mediation. This new amendment aligns the law with current practices as some lawyers have already been signing settlement agreements for their clients. Furthermore, the new statute addresses situations in which a party is absent from the end of a mediation session or negotiation. The amendment streamlines the execution of settlements documents and introduces a new disciplinary provision for lawyers who sign settlements documents without receiving express authorization from a client. Although neither the statute or specific provision specify that the authorization must be in writing, a lawyer may choose to get a signature in order to avoid being subject to State Bar disciplinary action.

The newly amended Code of Civil Procedure Section 664.6 does not apply to civil harassment actions, matters adjudicated in juvenile or dependency Court, or actions brought under either the Family Code or Probate Code. Additionally, this new statute does not apply to pre-litigation settlements because the Court does not have jurisdiction over non-litigants. Common law causes of action may enforce pre-litigation agreements; however, statutory confidentiality for both negotiation and mediation may cause evidentiary challenges. Also, according to Evidence Code Section 703.5, mediators are generally unable to be subpoenaed to testify about communications during mediation. In order to meet the requirement of pending litigation, pre-litigation parties may agree to the filing of a complaint with appearances by defendants as well as the execution of settlement documents. However, since parties create the terms of agreement for both negotiations and mediation, compliance is rarely an issue.

 * Attached below are the current statute and old statue.

[CURRENT] CODE OF CIVIL PROCEDURE – CCP

            PART 2. OF CIVIL ACTIONS [307 – 1062.20] ( Part 1 enacted 1872 .)

TITLE 8. OF THE TRIAL AND JUDGMETN IN CIVIL ACTION [577 – 674] 
( Chapter 8 enacted 1872. )

 CHAPTER 8. The Manner of Giving and Entering Judgment [664 - 674] ( Chapter 8 enacted 1872. )

664.6.  (a) If parties to pending litigation stipulate, in a writing signed by the parties outside of the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.

(b) For purposes of this section, a writing is signed by a party if it is signed by any of the following:

(1) The party.

(2) An attorney who represents the party.

(3) If the party is an insurer, an agent who is authorized in writing by the insurer to sign on the insurer’s behalf.

(c) Paragraphs (2) and (3) of subdivision (b) do not apply in a civil harassment action, an action brought pursuant to the Family Code, an action brought pursuant to the Probate Code, or a matter that is being adjudicated in a juvenile court or a dependency court.

(d) In addition to any available civil remedies, an attorney who signs a writing on behalf of a party pursuant to subdivision (b) without the party’s express authorization shall, absent good cause, be subject to professional discipline.

(Amended by Stats. 2020, Ch. 290, Sec. 1. (AB 2723) Effective January 1, 2021.)

2018 CALIFORNIA CODE

CODE OF CIVIL PROCEDURE – CCP

            PART 2. OF CIVIL ACTIONS [307 – 1062.20] ( Part 1 enacted 1872 .)

TITLE 8. OF THE TRIAL AND JUDGMETN IN CIVIL ACTION [577 – 674] 
( Chapter 8 enacted 1872. )

 CHAPTER 8. The Manner of Giving and Entering Judgment [664 - 674] ( Chapter 8 enacted 1872. )

 664.6.

 If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.

 (Amended by Stats. 1994, Ch. 587, Sec. 7. Effective January 1, 1995.)