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October 2017

Navigating Through Challenging Mediations:

Creating Value in the Midst of Obstacles

Van Krkachovski
Van Krkachovski

by Van Krkachovski


Mediation is a process in which a neutral third party assists the disputing parties in reaching a mutually acceptable resolution. Mediation is designed to be a confidential and voluntary process, free of the formality and adversarial nature of court proceedings. Due to the benefits that the mediation process has yielded, Rule 24.1 of the Rules of Civil Procedure enforces mandatory mediation in Toronto, Windsor, and Ottawa in certain civil actions, in addition to contested estates, trusts, and substitute decision matters under Rule 75.1. Mediation in Ontario has generally had a high rate of success among parties. According to the statistics compiled by Ontario's Ministry of the Attorney General, approximately 90% of cases are settled prior to trial.

There are however multiple reasons why a matter will not resolve at mediation. Among them are (1) the late service of expert reports or (2) the defendant's insurer taking a no-liability or defensible position, which may result in the insurer being unprepared to make a settlement offer at mediation. With respect to the former, it is common for insurers to have internal discussions, sometimes weeks before mediation, regarding the settlement authority for a particular matter, resulting in a decision being made on the amount of settlement authority to be afforded to the individual attending mediation. As a result, expert reports served days before the mediation by the plaintiff will not be accounted for during this assessment and very often sets up the mediation for failure. Therefore, timely service of expert reports is essential to enable the defendant to fully know the plaintiff's case and make a fully informed decision regarding its settlement position.

With respect to the latter, if the insurer is simply not prepared to make a settlement offer, the value of mediation will lie in trying to narrow and/or resolve some of the issues, better understand the parties' respective positions, and most importantly, allow the claims examiner to make their own assessment of the plaintiff regarding presentation and credibility in order to evaluate how the plaintiff will be perceived at trial.

Reason (3) as to why mediation may not result in settlement is simply the respective parties fundamentally disagree on the settlement value of the claim, with the result that the settlement authority provided to the claims examiner is insufficient to resolve the matter. While the settlement authority may be viewed as inadequate, it is more appropriately a reflection of the differing views of the claim. The claims examiner's ability to meet and assess the plaintiff for the first time, in addition to the capability of plaintiff's counsel, may prompt a modified settlement position following mediation. When mediation fails to settle the matter, both the claims examiner and his or her counsel will report to their supervisors regarding the outcome of the mediation and the process itself. What has been learned at the mediation about the other party's case may very well influence a settlement position going forward, which is true of both the defence and plaintiff sides.

Mediation is mandatory – Settlement is not

Rule 3.2-4 of the Rules of Professional Conduct obligates a lawyer to advise and encourage the client to compromise or settle a dispute whenever possible on a reasonable basis. Furthermore, when dealing with motor vehicle cases pursuant to section 258.6 of the Insurance Act (the "Act"), an insurer is obligated to participate in mediation when requested. Section 258.5(1) of the Act further stipulates that the insurer must attempt to settle the claim as expeditiously as possible.

This Ontario Court of Appeal's decision... is key in highlighting the interplay between the legislation and a party's duty at mediation.

The Ontario Court of Appeal's decision in Ross v Bacchus, 2015 ONCA 347, is key in highlighting the interplay between the legislation and a party's duty at mediation. In this personal injury case, the defendant's insurer had agreed to attend mediation but advised at the mediation itself that it was not interested in settling the case. Consequently, the trial judge ordered an additional $60,000 in costs due to the insurer's apparent failure to comply with its obligations to settle expeditiously under the Act. However, on appeal, the Court overturned the trial judge's cost award, highlighting the fact that settlement is not mandatory in order to meaningfully participate in the process. The Court stated that an insurer who participates in mediation cannot be declared to have failed to participate simply because the insurer indicated prior to mediation that it was not prepared to settle.

It is important to keep in mind that although mediation is mandatory in jurisdictions such as Toronto, settlement is not. The goal of mediation is to provide the parties with an opportunity at an early stage in the litigation process to discuss the issues in dispute. As a result, the Act may reasonably be interpreted to suggest that hard-nosed bargaining in order to dissuade a plaintiff from proceeding to trial may be acceptable, contingent on the insurer making genuine efforts to resolve the issues. One may also infer that this demonstrates settlement is not necessarily the ultimate goal of mediation. Rather, the purpose of mediation is to facilitate a faster resolution, which may involve the parties making good faith efforts to gain a better understanding of the issues and the parties' respective positions.

Benefits of the Mediation Process

Although mediation may not always result in settlement, there are several benefits the process can offer disputing parties.

1. Informality and Flexibility

Mediation is an informal procedure that is not bound by the procedural requirements of trial proceedings. It is also a much faster and less expensive process. Mediations are almost always completed in a day, in contrast to the years it may take to resolve a case at trial. Unlike the adjudication process, there are no procedural limits to the number of parties participating, the location, and the types of disputes involved. Mediation is more informal than adjudication since it encourages direct participation by the disputing parties. During mediation, the parties have ownership and control of the process and agree on a mutually acceptable resolution, unlike litigation where a court or an unpredictable jury imposes a judgment on the parties that is binding. The mediator simply acts as a moderator and does not have the power to make decisions about the relevancy of issues or information. Mediation is a private process and the public does not learn about either the process or the outcome. Thus, mediation provides an open and safe environment, where parties can express their needs and wants in a non-adversarial space.

2. Personalized Process

Another benefit of mediation is that the disputants are encouraged to participate directly in the process. In litigation, rules govern the types of questions that are asked and thus result in structured answers from witnesses. However, during mediation, there are no restraints on the parties' ability to express their goals and concerns. People often listen better once they feel their positions have been heard and understood. Mediation can facilitate reaching an understanding of the parties' positions on the issues, which may result in future settlement.

In addition, mediation very often is the first instance where the claims representative is meeting the plaintiff. Mediation provides an opportunity for the claim representative, who is the true "decision maker", to evaluate the claimant's credibility and demeanour, which will allow them to develop their own assessment of the plaintiff. With all of the parties in attendance at mediation, counsel is afforded the opportunity to "size up" the parties, and their counsel with respect to the effectiveness of their submissions, opening remarks, and how counsel will likely present at trial.

3. Refining the Scope of the Issues

Disputants may set the groundwork for a future settlement by discussing the issues and possible outcomes at mediation. Cases that have gone through mediation without achieving a settlement are more likely to settle earlier than cases that did not go through the process. Even if the insurance representative does not view the settlement value of a claim similarly to the plaintiff, mediation can be a highly useful process to clarify positions and understand one another's interpretation of the law or the facts at issue. The parties may be able to agree on one or more elements of the overall dispute, such as the quantum of damages or issues regarding liability. Regardless of whether mediation results in settlement, resolving any portion of a dispute will save the parties a great deal of expense and time going forward.

4. Choosing an Experienced and Knowledgeable Mediator

Although the disputants retain a high degree of control over the mediation, the mediator can have a significant impact on the outcome of the process. A mediator provides a neutral, third-party perspective, which can assist the parties in breaking down complex issues and evaluating the strengths and weaknesses of their respective case. Thus, a crucial step in ensuring mediation is successful is the parties' selection of an appropriate mediator. Counsel and the parties should consider and research the mediator's experience in the subject matter of the dispute. Although it may be appealing to hire an inexpensive mediator, the parties should keep in mind the significant value an experienced mediator with expertise in a certain area of law can bring to the mediation. An experienced mediator is able to encourage the parties to re-evaluate extreme positions, test their respective positions, provide them with real-life parallels to their conflict, and assist them in making informed decisions – all of which increase the likelihood of achieving settlement or minimizing the time and cost to resolve some or all of the issues.


Mediation is a highly beneficial tool in the litigation process even when faced with obstacles hindering or preventing settlement. It is important to keep in mind that mediation can provide several benefits apart from settlement, which can ultimately facilitate a quicker resolution of the case. Actively embracing the mediation process can allow the parties to gain a better understanding of the case, re-evaluate their positions, refine the scope of the issues, and hear (and hopefully consider) the perspective of a neutral third-party – the experienced mediator.

Read our mediation brochure for more information, or to book a mediation,
contact us at 416.860.7738 or


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