Frei

Introduction

Mediation using a neutral professional is often an effective and efficient way to resolve legal disputes. The California Legislature, businesses, consumers, and lawyers have all recognized the benefits of mediation.

Many written contracts include provisions requiring the parties to mediate before filing a lawsuit or arbitration proceeding, and conditioning recovery of attorney fees by a prevailing party on an attempt to mediate. The standard form residential purchase agreement used in California has a recently added clause providing that a prevailing party in litigation or arbitration who refused a request to mediate made before the commencement of such proceedings is barred from recovering attorney fees. This is the first published case in which this provision has been applied.

In accordance with the parties’ express agreement, we hold that the prevailing parties are barred from recovering attorney fees because they refused a request to mediate. The trial court’s finding that they did not refuse such a request is not supported by substantial evidence. The new provision barring recovery of attorney fees by a prevailing party who refuses a request for…