We discussed in a prior article how some courts have addressed the duty to act in good faith in the mediation context (“The Duty of Good Faith in Mediation Proceedings,” NYLJ, Aug. 25, 2010). Issues relating to good faith generally arise in the context of one party moving for sanctions, claiming that the other party did not participate in mediation in good faith. And parties have been sanctioned for failure to participate in good faith. The nature of the good faith obligation in mediation arose recently in the Southern District of New York.
Sanctions Ordered
Last year, a Bankruptcy Court judge in the Southern District sanctioned a party for failing to participate in good faith in a court-ordered mediation. See In re A.T. Reynolds & Sons, 424 B.R. 76 (Bankr. S.D.N.Y. 2010). The court in A.T. Reynolds criticized the party’s conduct prior to the mediation, finding that the party asked for a list of the issues that would be the subject of the mediation, requested the identities of the representatives of the other parties that would be attending the mediation, resisted providing a mediation statement, and insisted that it would only be prepared to address the issues that the debtor had expressly identified for mediation. See id. at 91-92.
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