Table of Contents
1. Nature of Mediation
Mediation is a method of dispute resolution in which two or more parties meet with an impartial mediator to attempt to agree to a settlement of their dispute. The mediator has no authority to issue any orders or to compel the parties to enter into a settlement agreement. The mediator’s role is simply to assist the parties in reaching an agreement.
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 in reaching an agreement.
Before the mediation is held, the parties will usually exchange a 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 or through a lawyer. This is often followed by some discussion between the parties. After the parties have explained their positions to each other, the mediator will often separate the parties into different rooms, speak to each party in private and attempt to help the parties come to a resolution. The mediator may present settlement offers from one party to the other and explain the rationale for the offers.
Mediation can be used before or during adversarial proceedings, such as a court action or an arbitration.
2. Advantages and Disadvantages
There are many benefits to mediation, including:
- It can be conducted in a short time frame and is usually completed in less than a day.
- It is generally less costly and less formal than a trial or an arbitration hearing.
- It is a confidential process, as all of the information revealed at a mediation is legally privileged, and the parties are not entitled to rely on the information in any litigation or arbitration.
- The parties have some control over the selection of the mediator and in establishing the procedure for the mediation and can choose a mediator who is not a lawyer or judge, such as 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 enable the parties to continue their business relationship.
- Information disclosed during the mediation may assist the parties in assessing the strength of their position or that of their opponent.
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 of the parties in multi-party disputes.
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 may have more power in the mediation, and that imbalance may preclude a satisfactory or fair outcome. 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.
In the event the matter will set a precedent in similar situations, or where a party wants a binding determination of law or an interpretation of legislation, the matter is likely inappropriate for mediation. Further, if one of the parties does not have a legitimate intention to attempt to resolve the matter, mediation is likely futile.
3. Court-Annexed Mediation
There is a trend in courts across Canada to favour mandatory participation in alternative dispute resolution. The Rules of Civil Procedure in Ontario establish mandatory mediation prior to trial 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.
In the province of Quebec, although not mandatory for all proceedings, the CCP offers a voluntary settlement conference where, at any stage of the proceedings, the chief justice may, at their 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 Rules of Court require all civil cases to participate in alternative dispute resolution, or have that requirement waived by the court, prior to securing a trial date. Acceptable alternative dispute resolution methods that satisfy this requirement include private mediation, arbitration, or judicial dispute resolution process. This requirement has been in place since 2019 and is expected to continue. In practice, most parties choose private dispute resolution procedures to satisfy this requirement, as securing dates for a judicial dispute resolution or another court-annexed process is difficult. Parties usually fulfil this requirement just prior to seeking a trial date, as the discovery process often significantly helps the alternative dispute resolution process and may incentivize parties to settle. The court may grant exceptions to the alternative dispute resolution requirement if the party applying for an exception demonstrates that it meets one of five expectations in the Rules of Court.
In British Columbia, a notice-to-mediate process has been established by regulation, whereby a party in a Supreme Court of Canada proceeding may require all of the other parties to attend a mediation by delivering a notice to mediate. The first enacted notice-to-mediate regulations applied to motor vehicle actions and residential construction, as well as certain disputes under the School Act. The process has been expanded to include a broad range of civil, non-family actions. Certain small claims matters are also subject to mediation.
4. Enforcing a Mediated Settlement
At the conclusion of a successful mediation, the parties will typically memorialize the terms of the settlement in a written document that is signed by the parties and their lawyers. An oral settlement agreement, if proven, is enforceable, but there is a risk that there will be insufficient evidence to prove its existence or terms.
Public policy in Canada encourages parties to settle litigation. 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 suffers from a mental disability, the court must approve the settlement before it can become enforceable.
A settlement agreement is a contract that may be enforced just like any other contract. Outside Quebec, if one party fails to comply with the terms of a settlement, the non-breaching party may have the option to accept the failure to comply as a repudiation of the contract of settlement and proceed to litigate the original dispute as if no settlement had been reached. The non-breaching party is also likely to have the option to start a court action to enforce the terms of the settlement. If the terms of the settlement are adequately documented in a written agreement, it will often be faster and easier to enforce the settlement agreement than it would be to litigate the original action. In Quebec, the authorities tend not to allow the repudiation of a settlement agreement, leaving the non-breaching party with the sole option of seeking homologation (approval) of the settlement agreement by the court.
In Ontario, the Commercial Mediation Act, 2010 makes it possible to enforce a settlement agreement resulting from the mediation of a commercial dispute without having to start a court action. This is because the settlement agreement, in certain cases, can be registered with the court and enforced as if it were a judgment of the court.