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July 20, 2018

The Cost of Refusing to Mediate

We have seen lots of information about using mediation to reduce the costs of resolving disputes.  Now in Ontario if you do not use mediation, it could cost you money. 

According to a recent decision by the Ontario Superior Court of Justice when a party in a lawsuit is “unreasonable “ in its refusal to participate in mediation, the Court can reduce the award of costs to that party.

This decision is very significant for all types of disputes.  Prudent lawyers and parties involved in disputes need to bear this  in mind when deciding about the use of mediation.

This case concerned a plaintiff who was injured when stepping or jumping out of the way after a stock race car left the track and was making its way to the open pit area. The race car did not make contact with the injured plaintiff.  The racetrack’s insurer defended the lawsuit. The circumstances did not require mandatory mediation. The case is Canfield v. Brockville Ontario Speedway, 2018 ONSC 3288 (CanLII), http://canlii.ca/t/hs7v0

In the words of Mr Justice Graeme Mew at paragraphs 56 and 57,

The present case is not one of those circumstances where a plaintiff was trying to shake down an insurer by demanding mediation of a wholly unmeritorious case.  To the contrary, it is a case where the insurer took a tough and uncompromising stance. That, of course, is a defendant’s prerogative.  Defendants do not have to settle.  But if reasonable opportunities to mediate are spurned, that can be a relevant factor when fixing costs.

 It was, in my view, unreasonable for the insurer to decline mediation in this case.  That should be reflected in the disposition of costs.  Had a mediation occurred in 2015 or even in 2017, substantial costs would have been avoided.

As you can see in this excerpt, reasonable circumstances to refuse mediation seem to be limited to the extreme and unusual.

Only 3 jurisdictions in Ontario - Toronto, Ottawa, and Windsor - have a requirement for mandatory mediation in civil lawsuits.  In other parts of the province and in other kinds of disputes where mediation is not mandatory, this decision is another boost from the Court to encourage the use of mediation.

 

Join us for Fundamentals of Mediation, a 40 hour, 5 day intensive mediation course.

The next course dates are September 26, 27, 28, October 1 & 2, 2018 in London, Ontario, Canada.

Early registration discount ends August 22!

 

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