Mandatory mediation

After years of sending contentious matters directly to the adversarial arena of the courtroom, many Canadian legislators are increasingly considering and instituting mandatory mediation. In Ontario, the Regional Municipality of Ottawa-Carleton and the City of Toronto are the chosen cities for a pilot project. Elsewhere in Canada, parts of Saskatchewan, Alberta and Quebec have implemented mandatory mediation. As consulting engineers and potential experts or parties to an action, it is important to become familiar with the mediation process.

Of all the actions commenced, only about five per cent ever go to trial. The vast majority of the remaining 95 per cent are resolved, according to law professor Garry D. Watson’s text entitled Civil Litigation. For those conflicts that do go to court, however, litigation remains a costly and lengthy process. According to the McFarlane Report released in 1995 and commissioned by the Ontario Attorney General, a three-day trial in the Ontario Superior Court of Justice can cost more than $38,000. This amount may be more than the case is worth. Mandatory mediation was implemented to reduce such costs, as well as to combat the delays inherent in litigation by helping to bring about the early and fair resolution of disputes.

A significant decision in Ontario that may touch the very core of our adversarial system of resolving disputes was rendered by Mr. Justice Blenus Wright in Ontario (Minister of the Environment) v. National Hard Chrome Plating Company (February 26, 1993, Ontario General Division). The case involved the leakage of chromium solution from the defendant’s property and the corresponding enormous costs to clean it up. The defendant made efforts to comply with a government order to clean up the property within the time frame and standards requested by the Ministry. Later, however, the defendant advised the Ministry that because of the costs involved, they were unable to implement the clean-up to the government’s satisfaction. As a result the Ministry sought an injunction to have the defendant comply with the order.

In dismissing the motion for the injunction, the judge discussed the pitfalls of litigation in determining whether costs should be awarded. He noted that when the matter first came before him, he expressed his reservations about the appropriateness of the injunction proceedings due to the fact that the environmental legislation contained a provision permitting the Ministry to undertake the clean-up and later recoup the costs. In the end the judge ordered the Crown representing the Ministry to pay fixed costs at $45,000.

The Crown was ordered to pay costs because they had sought a mandatory injunction which is an extraordinary remedy. The judge wrote: “Courts are prepared to consider government requests for extraordinary remedies in situations where legislation is inadequate to protect the public interest. But, in situations where, as in this case, the government has not used the legislative scheme which is available to it to take action in the public interest, this Court is reluctant to grant an extraordinary remedy.”

More importantly, however, the judge discussed the inordinate time, expense and delay that is characteristic of litigation. He wrote: “I believe both counsel, and especially counsel for the defendant, became so enamoured by the adversarial process that he lost perspective and winning at whatever cost took precedence over serving the clients’ best interests…. A bill of costs of almost $99,000 for a motion of this nature is an example of how litigation costs, have, in my view, skyrocketed beyond reason. I have difficulty comprehending how lawyers can justify such exorbitant costs for a motion of this nature and why clients allow their solicitors to run up such huge bills.”

In the mediation process, a neutral third party facilitates communication among the parties with the goal of assisting them to reach a mutually acceptable resolution. Parties are required to bring more than documents to the mediation table; they should arrive with the desire to want to resolve the dispute. It is important to be aware that mediation is not an all-or-nothing process. It is a session where open dialogue acts as a compass to resolution.

Often the parties are given the option to select a mediator from a list compiled by the local mediation committee, or they may select their own. Each jurisdiction will be different, but it is important to become familiar with the process in your area because there are various deadlines and steps that must be followed. For example, a party may have to file the name of the mediator within 30 days of the filing of the defence. In Ontario, parties have 90 days to carry out a mediation session.

Another attractive feature of mediation is that it is a fairly simple process. The mediator is given a copy of the pleadings (i.e. statement of claim and statement of defence) and a statement of issues prepared by each party. The statement of issues should identify the factual and legal issues in dispute and set out the position of the party. The parties are often permitted to attach documents considered central to their case.

Only the parties and their lawyers are required to attend the mediation session. In Ontario, within 10 days after the mediation is concluded, the mediator will give the mediation co-ordinator and the parties a report.

Mediation is cheap in comparison to litigation. In Ontario, each party must pay $300 to cover the mediator’s one-half hour of preparation time for each party and up to three hours of actual mediation. If the mediation session runs over three hours, an hourly rate kicks in. The fees after the three-hour mandatory mediation session are not regulated, nor are the fees of unlisted mediators.

Where the case involves a highly specialized and complicated issue, a party may want a mediator with experience in the field. Moreover, mediators can come from a variety of disciplines. This is an opportunity for consulting engineers to play a role in the mandatory mediation process. In Ontario, there is no requirement that the mediator be a lawyer, just that he or she is familiar with the judicial system and the rules that govern it.

If mandatory mediation results in an agreement settling the action, the parties or their lawyers will sign it. When a party to a signed agreement fails to comply with its terms, the other party may apply to the courts, and a judge may grant judgment or continue the proceeding as if there had been no agreement.

Become familiar with the mediation programs available in your jurisdiction. It could save your firm a great deal of time and money in solving construction disputes. CCE

David Bristow, Q.C. and Cynthia Koller are with the Toronto law firm Fraser Milner, Barristers and Solicitors, e-mail David Bristow@FraserMilner.com

“I have difficulty comprehending why clients allow their solicitors to run up such huge bills.”