Mediator Musings

an experienced mediator’s reflections on various things mediation

 

The 2016 Ontario Superior Court decision in Dimopoulos v. Mustafa 2016 ONSC 4119 highlights what has become an understood exception to mediation confidentiality - one which all counsel should keep in mind when preparing Mediation Briefs and participating in meditation negotiations.

Part 4 of Justice Tzimas' decision (beginning at paragraph 23) considered whether the Court should award a remedial penalty against the defendant insurer in addition to the costs to be awarded to the plaintiff. Plaintiff counsel argued that this should be the case because of the defendant’s failure to mediate and to attempt to settle the plaintiff’s claim as expeditiously as possible as required by sections 258.5 (1) and (5) and 258.6(1) and (2) of the Insurance Act. In this context the plaintiff asked the Court to lift the cloak of privilege over the mediation process and the defendant’s mediation brief as it would be the only way that the court could appreciate the extent of the defendant’s failure to comply with section 258.6 of the Insurance Act. For example, argued the plaintiff, the Defendant's Mediation Brief concluded with, “it is the defendant’s position that the plaintiff will be shut out at trial and will be liable for the defendant’s costs. For the purposes of mediation, this defendant is only willing to negotiation (sic) the quantum of costs payable to this defendant.”

The Court stated at paragraph 32, 'In this instance, by suggesting that the defendant’s mediation brief failed to attempt to effect a settlement, the plaintiff put into question the bona fides of the mediation process. In light of such an allegation, even though the preservation of confidentiality of the mediation ought to be the court’s point of departure, in circumstances where the only way to evaluate the allegation is to look behind the process then it is appropriate to admit the evidence in question. I echo the concerns outlined in Marshall v. Ensil Canada Ltd. 2005 CarswellOnt 803 at para.22 that a mediation brief and evidence concerning the mediation ought to be admitted only “in rare cases where the importance of considering the evidence outweighs the importance of preserving confidentiality.” This case reflects such a rare case, and in any event the request is only with respect to the mediation brief and not the full contents of the mediation."

I have to question the Court's suggestion that this is such a rare case. I'm frequently confronted by defendants strongly convinced of the merits of their case who are unwilling to make a meaningful monetary contribution to settlement.

In this case the Court went on to hold, "The mediation brief reflected a meaningful participation in the process by the defendant. Even if a settlement of the claim was not forthcoming, it enabled the plaintiff to obtain an understanding of the defendant’s position and the reasons for that position. That outcome, while obviously not optimal for the plaintiff, was nonetheless meaningful as it allowed the plaintiff to review his risks and trial strategy and approach."

While the Court did not award a remedial cost penalty agains the insurer in this case it's not hard to contemplate a case where it might be inclined to do so; a case in which the mediation brief failed to reflect any meaningful participation in the process. It's also not hard to contemplate a case where the Court could go beyond considering the mediation brief and actually entertain evidence on the conduct of a party at a mediation.

This seems a slippery slope that easily can lead to the erosion of the efficacy of the mediation process. Mediation confidentiality is understood to be necessary to permit parties and counsel to have a frank and open discussion on the strengths and weaknesses of the case and the possible range of damages. If such discussions need to be filtered through concerns about how a Court might eventually see them it's hard to see that having a positive effect on the process.

By the way, counsel should also be aware in this vein that subsection 9(3) of the Commercial Mediation Act, 2010, S.O. 2010, c. 16, Sched. 3, provides as follows: 

(3) Information about the conduct of a party to the mediation or the conduct of the mediator may be disclosed after the final resolution of the dispute to which the mediation relates for the purpose of determining costs of the mediation or of proceedings taken because the mediation did not succeed. 2010, c. 16, Sched. 3, s. 9 (3).

My concern about this provision is one of the reasons that my Mediation Agreement expressly contracts out of this legislation as permitted by s. 2(2)(a) of the Act.

 

 

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   Dec 13, 21

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