V. Mediation

Mediation is a method of dispute resolution in which two or more parties meet with the assistance of an impartial mediator to attempt to agree to a settlement of the dispute between them. The mediator has no authority to issue any orders or to compel the parties to enter into a settlement. The mediator’s role is simply to assist the parties to reach an agreement among themselves.

1. Nature of Mediation

Prior to the mediation being held, the parties will normally exchange a brief summary of their positions and copies of the most relevant documents. At the start of the mediation, each party can make an opening statement, either in person and/or through its lawyer. This is usually followed by an open discussion between the parties.

After the parties have explained their positions to each other, the mediator will often separate them into different rooms, and the mediator will then speak to each party in private and attempt to help them come to a resolution. The mediator may present settlement offers from one party to the other and explain the rationale for the offers.

2. Advantages and Disadvantages

There are many benefits and advantages to mediation. A mediation can be conducted in a short time frame. Usually a mediation is completed in less than a day. It is less costly and less formal than a trial or an arbitration hearing. Mediation is a confidential process. All of the information revealed at a mediation is legally privileged and the parties are not entitled to rely on the information in any subsequent litigation or arbitration.

The parties have some control in selecting the mediator and establishing the procedure for the mediation. They can choose a mediator who is not a lawyer or judge, and thus they can choose an expert in the area in dispute. Because the parties are involved in structuring the settlement, they can be creative and implement business solutions that would not be available to a court deciding a lawsuit. In some cases, a mediated settlement will allow the parties to continue their business relationship.

The main disadvantage of mediation is that, if it fails, the parties will have spent time and money on the process without achieving a settlement. However, even if a complete settlement is not achieved, benefits may be gained. For example, issues or claims may be narrowed or resolved and partial settlements may be achieved with some parties in multi-party disputes.

Information disclosed during the mediation may assist in assessing the strength of your position or that of your opponent.

Nonetheless, there are circumstances in which mediation may not be the best course of action. If there is a disparity with respect to the power of the parties or a party is unable to afford to proceed with litigation, the other party will have more power in the mediation and that imbalance may preclude a satisfactory or fair outcome at mediation. Further, there may be cases in which extensive pre-hearing discovery of documents or witnesses is important, given the nature of the allegations or the defence. In such cases, it may be best to delay mediation until after the discovery process is completed.

3. Court-Annexed Mediation

There is a trend in favour of mandatory consideration and/or participation in alternative dispute resolution in courts across Canada.

The Rules of Civil Procedure in Ontario establish mandatory mediation for nearly all civil cases and cases related to the administration of an estate or trust that are commenced in the cities of Toronto, Ottawa and Windsor. Such cases in those cities must be mediated before proceeding to a trial.

In Quebec, though not mandatory for all proceedings, the Code of Civil Procedure offers a settlement conference where, at any stage of the proceedings, the Chief Justice may, at his own initiative and with the consent of the parties or at the request of the parties, designate a judge to preside at a settlement conference to facilitate dialogue between the parties and explore mutually satisfactory solutions to the litigation.

In Alberta, the new Rules of Court, in effect as of November 1, 2010, require that parties participate in a dispute resolution process, or have that requirement waived by the court, prior to securing a trial date. Dispute resolution processes include the use of an impartial third-party mediator, court-annexed dispute resolution, judicial dispute resolution or any other program or process as designated by the court. On application, the court may waive the requirement of a party to attend the dispute resolution process. Grounds for such an application include situations where: the parties previously engaged in a form of dispute resolution process before the action started and there would be no benefit in holding a further process; the nature of the claim is not such that a dispute resolution process would likely result in a settlement; there is a compelling reason not to engage in the process; the court believes that the process would be futile; or where receiving a decision by the court is otherwise desirable.

4. How is a Mediated Settlement Enforced?

At the conclusion of a successful mediation, the parties will normally memorialize the terms of the settlement in a written document that is signed by the parties and their lawyers. Depending on the circumstances, it may be possible to enforce an oral settlement agreement, but it is more difficult to do so.

A settlement agreement resulting from a mediation is enforced in the same manner as any other settlement agreement. Public policy in Canada encourages parties to settle litigation and, as a result, it also favours the enforcement of all valid settlement agreements. There are some limited circumstances in which a court will not enforce a settlement, for example, if one of the parties is under a mental disability, the settlement must be approved by the court before it is enforceable.

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