Mediation is a confidential, off-the-record structured negotiation process in which a neutral person, the mediator, assists the parties and their lawyers to achieve a settlement of all or some of the issues of their dispute. The mediator has no authority to order the parties to do anything. The lawyers for the parties provide a synopsis of the facts, legal positions and some key documents to enable to mediator to understand the case. Sometimes, the lawyers provide a summary of damages and expert evidence.
After a brief introductory session involving all parties, the parties go to separate rooms with their respective lawyers. The mediator discusses the issues with each party and their counsel separately and shuttles between the parties in an attempt to narrow the issues and reach a settlement. The mediator’s experience and skill is required to help the parties identify creative ways to break the impasse on difficult issues, which may involve very significant amounts of money.
If the parties agree to settle the issues in the case, a settlement agreement or Minutes of Settlement are frequently prepared at the mediation and are signed by the parties and their lawyers.
The mediator’s understanding of the litigation and negotiation process and his commitment to find a resolution so long as there is hope for a settlement is key to the success of the process. The mediator uses many persuasive techniques to narrow the parties’ disagreement. The mediator also advances the benefits of settlement and points out the costs and risks of litigation. In some cases, settlement advances some interests of the parties which transcend the specific issue in the litigation. If requested by the parties, the mediator may express his opinion about the merits of a particular factual or legal issue. In some cases, of course, the gaps cannot be bridged and the mediation does not produce a settlement. Sometimes, progress is made on an issue during the mediation, which enables the parties to reach a settlement later.
Mediation is mandatory in nearly every action by the Rules of the Ontario Superior Court of Justice under Rule 24.1. Confidentiality is an essential aspect of mediation and is mandated by Rules 24.1.14, 75.1.11 and 75.2.08.
Arbitration is an adjudicative dispute resolution process in which the parties select a neutral person or persons, the arbitrator, to decide their dispute and agree to be bound by the decision. The attractiveness of arbitration as a dispute resolution process is that it enables disputants to agree upon most aspects of the manner in which their dispute will be determined, including,
- the forum (a sole arbitrator or a panel of three)
- the types of disputes which the arbitrator will be permitted to consider
- the manner in which the arbitrator will selected
- the arbitrator’s special qualifications or experience
- the identity of the arbitrator
- the rules of procedure and hearing process to be applied during the arbitration
- the governing law of the arbitration
- the place where the arbitration will be heard (known as the seat)
- the language of the arbitration
- the time in which the arbitrator must deliver the award
Disputants may agree to some or all of these matters in an agreement before any dispute arises or the agreement may be made when the existence of the dispute is already known. Where the parties have not agreed on all of the elements, the Ontario Arbitration Act, 1991 (where all parties are resident in Ontario) and the International Commercial Arbitration Act (where one of the parties is not resident in Ontario) provide many of the terms applicable to the arbitration upon which the parties have not expressly agreed.
Arbitration differs from litigation in Court in many ways. It is a procedure outside the Court system but there is involvement with the Courts in many arbitrations, particularly to deal jurisdictional issues and when the arbitration award has been issued by the arbitrator, to enforce it. Enforcement involves an application the Court to make the arbitration award a judgment of the Court, which permits use of enforcement procedures in the Rules of Civil Procedure.
Unlike mediation where the mediator has no authority to require the parties to do anything, the arbitrator has jurisdiction to do what the arbitration agreement authorizes, which may include,
- determining the process by which the arbitration will be conducted
- interpreting the scope of his/her jurisdiction under the arbitration agreement
- summonsing witnesses to appear before the hearing of the arbitration
- making interim preservation orders
- making a final award, which may include an award of costs
Unlike a judge of the Court, an arbitrator does have the power to find a party in contempt, nor does the arbitrator have jurisdiction to make an order against third parties who are not parties to the arbitration agreement.