Advanced mediation is gaining traction. Natai Shelsen argues it gets results and preserves relationships
Heads up, solicitors – there’s a new kid in town. Advanced mediation is the latest trend in dispute resolution, and you would be wise to accept her friend request.
Advanced mediation is different from the mediation most lawyers are familiar with because it happens outside of litigation. It typically involves parties with an ongoing relationship who want to resolve a dispute before it becomes (too) acrimonious but are unable to do so on their own. Think business partners who can’t agree on how to wind up their business, a dispute involving a commercial tenant, or a subcontractor who refuses to complete the job.
When calls come in from clients with similar issues, the modus operandi of most solicitors is to refer them to litigators. The referral is made with a hint of dread, in case a contract they drafted gets ripped to shreds by their litigator-friend or, far worse, by a judge. Could advanced mediation be a better mousetrap?
It’s certainly gaining traction. Proponents will tell you that it gets results and preserves relationships. Parties are not yet entrenched and are motivated to settle and move on. They haven’t yet spent countless dollars on legal fees. They can negotiate creative business solutions not typically available in the courtroom. And they can get back to focusing on what matters most – running their business – far more quickly than with litigation.
So what’s the catch? To most of us, advanced mediation is unknown, and questions abound. How can parties assess the true strength and value of their claims outside of the litigation process? Can it be used strategically to gather information for use in subsequent litigation? And every lawyer’s worst nightmare: what if I bust a limitation period by referring to a mediator instead of a litigator? Allow me to put your mind at ease (bearing in mind the typical disclaimer: this is not legal advice!).
Mediation outside of litigation
It’s hard for lawyers to picture mediation outside of the litigation process. It’s true that some clients need to get a more realistic picture of their or their opponent’s claim before they can agree to settle. And the litigation process offers invaluable tools – like documentary disclosure and examinations – that help with that evaluation process. Sometimes clients need to see the legal bills stacking up to push them to the bargaining table.
The advanced mediation process – like mediated settlements – should be tailor-made to suit the dispute in question. Depending on the nature of the dispute, the amounts at issue and the sophistication of the parties, some parties attend with their lawyers, obtain independent legal advice or get an early neutral evaluation of the claim prior to attending mediation. Parties can also agree to disclose documents on a without prejudice basis in advance of mediation.
In other cases, the presence of lawyers can overcomplicate things. The truth is, parties often know what they want, what they’re willing to forgo, and what it’s worth to them. Mediated settlements may not always be the deals that lawyers envision, but, in some ways, that’s the beauty of them.
Mediation agreements typically contain confidentiality provisions which protect communications and settlements. While many parties value the confidentiality afforded by mediation (in contrast to public court proceedings), they can mutually agree to subsequently waive these rights to share certain information (like a public statement or new policy that was agreed to in mediation).
The Supreme Court recently held in Union Carbide v. Bombardier that discussions and documents exchanged in mediation (in the context of an ongoing litigation) are protected by settlement privilege, the evidentiary protection of communications exchanged by parties in settlement discussions. If a litigious dispute is within contemplation, advanced mediation may also be protected by settlement privilege. Like all negotiated settlements, communications may be disclosed to the extent necessary to prove the terms of a settlement. Parties can, however, limit the availability of the exceptions to privilege by drafting clear confidentiality provisions.
Limitation Periods. Advanced mediation automatically suspends certain limitation periods (yes, you read that right). If parties agree to mediate, s. 11 of Ontario’s Limitations Act, 2002, automatically suspends the 2-year and 15-year limitation periods that typically apply to civil claims. No written agreement is necessary to invoke s. 11. These limitation periods are put on hold from the date the agreement to mediate is concluded, until the date the claim is resolved or the mediation terminated.
The Limitations Act, 2002, applies exclusively to claims pursued in court proceedings and not, for instance, to the one-year limitation period under the Ontario Human Rights Code. Where a limitation period is not automatically suspended, parties may be able to suspend it with a carefully drafted tolling agreement in which parties agree that a limitation period will not run during mediation and waive their right to invoke a statutory limitation period should the matter not settle. Mediators may include such language in their mediation agreements.
Not every dispute is suited for advanced mediation, but many would benefit from it. Issues can be resolved more quickly and typically at a lower cost than with litigation. Parties can craft enduring and practical solutions to address personal or business realities. Relationships can be preserved. Businesses can get back to doing what they do best – running their business.
So get to know your new best friend. Follow her on Instagram. And next time your client calls because its former VP has started a competing business, phone her up. This is the beginning of a beautiful friendship.