As of February 15, 2001 the British Columbia government introduced a mandatory mediation regime for civil lawsuits. All civil litigation proceeding in the British Columbia Supreme Court, with the exception of family law, administrative and sexual abuse matters, is subject to the new regime. What this means is that anyone involved in a civil lawsuit, whether as a Plaintiff or a Defendant, will very likely end up mediating the dispute. One of the parties to the dispute must actually initiate the mediation, but this should be expected, given the cost of litigation and the success rate mediations have enjoyed in British Columbia to date.
WHAT IS MEDIATION?
Mediation is a process whereby the parties to a dispute meet with a neutral third party who assists the parties in negotiating a resolution of the dispute. The third party will in most cases have specialized mediation training and may be an expert in the particular matter that is the subject of the dispute. The key, however, is that the third party will remain neutral but assist the parties in developing their own resolution of the dispute.
WHO ARE THE MEDIATORS?
Mediators in British Columbia have specialized training in mediation techniques. The Continuing Legal Education Society offers specialized courses to lawyers. The British Columbia Arbitration Mediation Institute and the Mediation Development Association also train mediators. The British Columbia Mediators Roster Society maintains a roster of mediators who have met specific training and experience criteria and agreed to a code of conduct. Your counsel can, of course, assist you in locating and selecting an appropriate mediator.
THE ADVANTAGES
Mediation has become increasingly popular over the last 15 years. Many parties, and their lawyers, have voluntarily submitted their disputes to the mediation process. The success rate has been quite high (some say up to 80 to 90%) and as a result lawyers, the public generally and the government have become more and more aware of the possibility. There is clearly a cost saving benefit to the government who must provide the judges and court house facilities. There are also savings to the parties.
But cost savings are not the only benefit. Most importantly, mediation allows the parties to a dispute greater control over the actual outcome. When a matter proceeds to litigation and on through the trial process the parties are ultimately putting the final decision in the hands of a third party. In many instances this may be the only means of resolving a dispute. However, the decision will be made subject to the court’s rules of procedure and based on the court’s interpretation of the evidence. One party must win and one party must lose, and there is seldom an opportunity to fashion a remedy that benefits both parties. Mediation allows the parties to be creative and develop a solution that is more beneficial and more workable than the limited range of remedies a court can award.
A mediation often results in a quicker resolution of the issues. At present in British Columbia, even simple court cases can take up to two years. For those without litigation experience, the process is often more frustrating than rewarding. A lawsuit, to be successful, must be conducted according to very specific rules, but even to a sophisticated business person the steps may be puzzling. And it is not just time that is at stake. There is also an emotional investment, particularly in personal injury cases, but even in straightforward business disputes.
A properly conducted mediation should produce a result that is satisfactory to all parties. The parties to a dispute can, of course, conduct settlement negotiations without resorting to a formal mediation. However, a formal mediation, in the presence of a skillful mediator, is more likely to reach that satisfactory result. It is not just the final number that is important. A mediation also allows the parties an opportunity to vent complaints and emotions and develop a more objective understanding of the dispute. While litigation often puts an end to ongoing business relationships, mediation presents an opportunity to repair and strengthen those relationships.
Given the benefits, it is clear why parties were proceeding to mediation, even in the absence of a legislated regime. And certainly parties are still free to pursue mediation and other forms of alternative dispute resolution, including arbitration, without resorting to the new Regulation. Nevertheless, the government has seen fit to legislate and even the most reluctant parties may find themselves involved in a mediation.
THE PROCESS
There is no single process that a mediation must follow. The format will depend on the parties and the mediator. What matters is the adoption of a process and techniques that will assist the particular parties in reaching a result. However, there is a basic format that most mediations conducted in British Columbia will follow.
Mediations may take a day, but if a matter is complex or involves a considerable number of parties, several days may be required. When to conduct a mediation is not always a simple question. Many mediators advise that the sooner in the dispute process a mediation takes place, the greater will be the chance for success. This is because the parties have less of an investment in the dispute itself, both emotionally and financially. However, it is also wise not to proceed with a mediation until the parties have at least a basic understanding of the other parties' strengths and weaknesses. If a matter is proceeding through litigation it may be necessary to ensure that all documents have been produced and possibly, oral discoveries completed, before commencing a mediation.
To begin, the parties must, of course, choose a mediator. Mediators are often other lawyers, but it is not uncommon to retain a retired judge or someone without formal legal training. All mediators will, however, have special training in terms of conducting mediations. Most counsel know various mediators and an agreement regarding an appropriate mediator can usually be reached quite quickly.
The mediator will ask the parties to sign a mediation agreement. This agreement verifies the parties' intention to proceed to mediation and the fact that whatever is said at the mediation cannot itself constitute evidence in any ongoing litigation. The agreement will also provide for payment of the costs of the mediation which are usually shared equally among the parties.
Prior to the mediation the parties will exchange Submissions briefly setting their positions. It may also be appropriate to exchange expert reports, if they are available. Sometime before the mediation proceeds counsel will meet with their respective parties to explain the process and the role the parties will play. It is also important for the parties to begin assessing the risks inherent in the case and potential solutions, both monetary and non-monetary.
The mediator will arrange for a suitable space, usually a large boardroom with various "break-out" or "caucus" rooms nearby. The parties will sit across the table from each other with their counsel, with the mediator at the head of the table. The mediator will begin by explaining the process. The parties are then given an opportunity to outline their views of the case. The parties, and not just their lawyers will be encouraged to speak. Keep in mind that it is the parties, and not the lawyers, who must be satisfied with the final result and it is often important that the parties have their say.
It is also important that the parties themselves attend the mediation. The term "parties" is used loosely here. If someone other than a party has the final say regarding what it is to be paid or accepted in settlement, for instance a claims examiner from an insurance company or the parent or a young litigant, that person must be at the mediation.
After initial presentations are completed, the mediator will assist the parties in identifying points of agreement and points of contention. At this stage the parties will usually "caucus" with their respective counsel in order to discuss the key issues and possible strategies. The mediator will often want to meet with the parties separately.
Further meetings with all persons present may occur in order to focus on and discuss particular issues. Offers to settle are usually not made until the parties have had at least one opportunity to caucus. The mediator will assist the parties in understanding the other parties’ position. It is important to keep in mind that the mediator is not there to make a decision for the parties. He or she is there to assist. A good mediator will offer different ways to look at particular issues and, most importantly, keep the parties talking until a resolution is formulated or there is a complete impasse. Many mediators will also objectively assess the risks the parties face if their dispute continues and discuss those risks with the parties and their own counsel during the caucus stage of the mediation. The parties and their counsel can then decide how the potential risks impact on the resolution they wish to achieve.
In the majority of mediations a settlement will eventually be reached. The mediator will then document the agreement reached at the mediation. This is an important step because it will preclude any future disagreement as to the settlement. Formal documentation, including any necessary court documents, together with any payments, are usually exchanged in the days soon after the mediation.
THE LEGISLATION
The Rules regarding how a mandatory mediation works are set out in a Regulation made pursuant to the British Columbia Law and Equity Act. Mandatory mediations in respect of motor vehicle accidents and residential construction take place pursuant to different Regulations, although the provisions in all the Regulations are similar.
Any party to an action may initiate a mediation by delivering a Notice to Mediate to the other parties and the Dispute Resolution Office of the Ministry of the Attorney General. The Notice must be delivered no earlier than the filing of the first Statement of Defence in the Action and no later than 120 days before the trial date.
The parties must then appoint a mutually acceptable mediator. If the parties cannot agree, the Regulation provides a mechanism whereby a mediator is selected by a "roster organization" approved by the government.
If, in the mediator’s opinion, the action is sufficiently complex, a pre-mediation conference will be held. The pre-mediation conference is intended to consider all organizational matters, including scheduling, time limits, whether pleadings are complete and the exchange of documents and expert reports. The mediation itself must occur within 60 days of the appointment of a mediator and not later than 7 days before the date of the trial, unless there is an agreement or court order to the contrary.
The parties themselves must participate in the mediation. A party need not attend a pre-mediation conference if represented by a lawyer. However, a party must attend the actual mediation, or send a proper representative. A company will, of course, send a representative. An individual under a legal disability (being a minor, for example) or suffering a physical or mental disability that would prevent effective participation may also appear through a representative. A party or representative may attend the mediation accompanied by a lawyer.
If a representative attends on behalf of a party, the representative must be familiar with all relevant facts and have full authority to settle or have ready access to the person or persons who do have authority. "Party" is defined in the Regulation to include insurers, since where there is an insured claim, it is usually the insurer and not its insured who has authority to settle.
A party can only be excused from participating in a mediation if all the other participants agree or if there is a court order to that effect.
Fourteen days before the mediation, each party must deliver a Statement of Facts and Issues. The parties must also complete a fee declaration. Costs are to be paid equally unless the participants agree otherwise. Conduct of the mediation is at the discretion of the mediator who is directed to "assist the participants to reach a resolution that is fair, timely and cost-effective." A mediation is concluded when all the issues are resolved or the mediator terminates the mediation. When a mediation is concluded a Certificate of Completed Mediation will be filed.
Applications may be made to the Supreme Court for directions or in the event of a default. Directions may be sought regarding the timing of the mediation, the terms and conditions and whether a party is exempt from attending. If one party fails to properly participate in the mediation or otherwise fails to comply with the Regulation, other parties may deliver a notice, called an Allegation of Default, and then proceed with a court application. The Court may give directions or make orders regarding the conduct of the mediation. Alternatively, the Court may strike the action or Statement of Defence, grant judgment against the defaulting party and award costs. In other words, the failure to properly participate in a mediation has serious consequences.
Finally, it is worth noting that information, opinions and documents disclosed in the course of a mediation cannot be used in the court action, or other civil, criminal, quasi-criminal, administrative or regulatory proceedings, unless the information, opinions and documents are otherwise producible.
IN SUMMARY
It is now more likely than not that a person who becomes involved in litigation in British Columbia will proceed to mediation. Mediation has many advantages and can result in an efficient and effective resolution to litigation. The idea of sitting down with the other parties to a lawsuit may seem somewhat daunting. But used properly, mediation, including the new mandatory regime, is an effective procedure.
Mediation has been an integral part of Clark Wilson LLP's litigation practice for many years now. The Alternative Dispute Resolution Practice Group and the Business Litigation Group include several lawyers with mediation training and experience, ready to assist clients in understanding the mediation process and using it to good advantage.
Larry Munn
Tel. 604.643.3160
lm@cwilson.com
