When one party does not act in good faith

We hear this often from counsel and clients: “They are not negotiating in good faith.” Typically it reflects a frustration with the negotiation strategy or evaluation of the claim by the opposing party.

We researched the law on this subject and could not find a legal requirement that parties “act in good faith.” The Rules discuss appearance, participation, authority, etc., but not a “good faith” obligation with respect to mediation. Some federal court orders for mediation include “good faith” language, but it’s unclear how this standard is enforced.

There are ethical and procedural rules that govern the conduct of counsel and the parties at mediation. Also, the mediator is responsible for the integrity of the process, including adjourning or terminating any mediation which, if continued, would result in unreasonable emotional or monetary costs to the parties; if the mediator believes the case is unsuitable for mediation or any party is unable or unwilling to participate meaningfully in the process; or terminating a mediation entailing fraud, duress, the absence of bargaining ability, or unconscionable conduct. See Rule 10.420, Rules Regulating Certified Mediators.

If a good faith standard exists and has been imposed, with consequences for “not acting in good faith,” we would be interested in hearing about it.