MEDIATION
For this week's Blogs, I don't intend to focus on an overall theme, but rather raise a number of interesting issues that I have dealt with over the last few months.
My first topic is Mediation. Mediation is now widely regarded as an important tool in the arsenal of any litigator. There is some debate as to when the parties to an action should mediate. Many counsel believe that early mediation provides a golden opportunity to settle disputes in the early stages without incurring significant legal fees. Other counsel believe their client's position is compromised if they have not examined the opposing party.
Recent changes to the mandatory mediation rules for civil actions in Ontario now largely leave the decision as to when to mediate in the hands of counsel with the expectation that many mediations will now take place after examinations for discovery have been completed. However, the estate litigation world is somewhat different. I am a fan of early mediation, especially in the estate context. Very little good can come of families fighting over what many consider a windfall.
Moreover, mandatory mediation is required in many estate actions and it is routinely conducted early on. Where it is not mandatory, counsel will often agree to early mediation. One note of caution: where mediation takes place before examinations for discovery have been conducted, the parties should exchange affidavits of documents beforehand so that they at least familiarize themselves with the relevant documents. It is generally accepted that mediation is confidential. The parties are encouraged to speak their minds in order to facilitate settlement. As a result, the content of what is said at mediation cannot be used against a party at a later date. A recent decision of the Divisional Court of the Ontario Superior Court of Justice is worth considering. In Rudd v. Trossacs Investments Inc. (2006), 79 O.R. (3d) 687, the issue of whether a mediator could be called as a witness was canvassed. In Rudd, the parties entered into a settlement agreement following mandatory mediation. A dispute arose as to whether a particular party was a party to the settlement agreement.
A motion was then brought for the enforcement of the settlement. An interim order was sought to compel the mediator to testify about communications at the mediation. The motions judge ordered that the mediator could be examined as a witness on the pending motion to enforce the settlement. The motions judge discussed the common law principle that settlement discussions are privileged, but concluded that once a settlement had been reached and its interpretation is in question, it may be necessary to disclose mediation discussions to ensure "substantive justice".
Not surprisingly, the decision was appealed to the Divisional Court, which allowed the appeal. The court held that communications between the parties at the mediation and with the mediator originated in confidence and so should not be disclosed. In fact, all parties had signed a confidentiality agreement that expressly stated that the communications at the mediation were to be confidential and the mediator's notes and recollections could not be subpoenaed in the litigation. The court was also satisfied that the confidentiality of communications during the mediation was essential to the functioning of the mediation process.
The court then noted that there was a significant public interest in protecting the confidentiality of discussions at mediation to make the process as effective as possible. In fact, mandatory mediation is required in many civil disputes in order to assist the parties in arriving at a settlement. The court noted that the ability of the parties to engage in full and frank disclosure was also fundamental to the mediation process and to the likelihood that it would lead to a resolution of the dispute. Parties would likely be less candid if they knew or were not assured that their discussions would remain confidential.
Finally, the court was concerned that the mediator would lose the appearance of neutrality if required to testify in a proceeding between the parties. According to the court, there was an important public interest in maintaining the confidentiality of the mediation process. In conclusion, the court held that the mediator could not be compelled to be a witness on a pending motion. The confidentially of communications at mediation was protected. As a result, mediation will continue to be embraced by counsel as an important alternative dispute mechanism.
Have a great day. Justin de Vries --------
