Chapter 5 - Management of Cases

5.2 - Alternative Dispute Resolution

Members of the public should have the option to select the process which is most suitable to the resolution of their particular dispute, as well as the facilities to enable them to make that choice. Alternative dispute resolution -- or "ADR" as it is commonly known -- offers an important panoply of techniques for achieving this goal, particularly in conjunction with the rubric of caseflow management. [1]

Introduction

Issues concerning "alternative dispute resolution" (ADR) were deferred to our final Report. In our First Report, we recommended: [2]

  • that the Law Society proceed to implement the proposals of its Dispute Resolution subcommittee and, in particular, its draft proposal to amend the Rules of Professional Conduct to place a positive obligation on lawyers to inform their clients of alternatives to litigation and to respond to proposals for the use of alternative methods of dispute resolution;
  • that the concept of court-connected ADR be accepted in principle, but that the determination of the appropriate form of service model and funding option should await the evaluation of the ADR Centre pilot project;
  • that early screening and evaluation mechanisms be built into the caseflow management structure to be implemented in the province; and
  • that standards be developed by the ADR profession, in conjunction with the Law Society of Upper Canada and other appropriate professional organizations, for the accreditation of ADR practitioners who provide service to the public either privately or through court-connected facilities.

Amendment to Rules of Professional Conduct

In our First Report, we noted that the Law Society had recently completed an examination of the role of lawyers with respect to ADR and that its Dispute Resolution Subcommittee had recommended, among other things, that "the Rules of Professional Conduct should be amended to place a positive obligation on lawyers to inform their clients of alternatives to litigation...". [3] The Task Force recommended that the Law Society act on this recommendation.

It has done so. In May 1996, the Law Society adopted this proposal and amended Rule 10 of the Rules of Professional Conduct to include the following requirement: [4]

[That] the lawyer should consider the appropriateness of ADR to the resolution of issues in every case and, if appropriate, ... should inform the client of ADR options and, if so instructed, take steps to pursue those options.

This new obligation placed on lawyers underscores the increasing importance that is being given to alternative methods of dispute resolution in the civil justice system, and the need to ensure that accessible and accredited ADR services are available.

The Court-Connected ADR Centre - The Evaluation

The ADR Centre of the Ontario Court of Justice (General Division) was the first court-connected ADR program in Canada. It was introduced in the Toronto Region as a pilot program in October 1994, for the purpose of testing whether the availability of ADR techniques improved the conduct of civil cases.

The pilot project was designed and implemented by a Steering Committee comprised of representatives of the Bench, Bar and Ministry of the Attorney General. In addition, an ADR Users' Committee was established to consider improvements to the operation of the Project. The ADR Centre is staffed by a Project Director and four dispute resolution officers, two full-time and two part-time. While the funding for the Centre was originally to end on March 31, 1996, it has been extended pending a final decision about the role of mediation in the civil dispute process and the development of an appropriate transition plan.

Matters pertaining to the ADR Centre are governed by a Practice Direction, which provides that the primary objective of the Centre is to ensure "enhanced, more timely and cost-effective access to justice for both defendants and plaintiffs". [5]

Four in every ten cases filed at the General Division Court at 361 University Avenue are referred to the ADR Centre. Applications, family matters, motor vehicle claims, and construction liens are excluded. Referral occurs after a statement of defence has been filed. Mediation sessions, which are normally arranged for two hours, are scheduled within two to three months of the filing of the statement of defence.

The results of the Pilot Project were evaluated by an external team led by Dr. Julie Macfarlane of the Faculty of Law, University of Windsor. [6] Dr. Macfarlane released her report (the "Macfarlane Evaluation") on November 30, 1995. It concludes that the ADR Project has provided a cheaper, faster and more satisfactory result for many of the cases referred there.

More specifically, the Macfarlane Evaluation revealed the following:

  • about 52% of cases that are referred to the Centre attend a mediation session; 54% of those that attend a session settle; cases that settle do so generally before discovery;
  • cases that settle at the ADR Centre do so in half the time of non-referred General Division cases that settle before trial (mean time of 124 to 129 days versus over 200 days);
  • about 15% of cases referred to the Centre settle before the scheduled mediation session, suggesting that referral to the Centre helps to promote settlement in some cases;
  • a majority of lawyers and clients, both in cases that settled and those that did not, were satisfied with the process;
  • a majority (over 95%) of lawyers and parties, including those whose cases did not settle, said they would participate in ADR again;
  • of lawyers stated that they would not have fared better at trial than they did in mediation. Of those who felt they would have done better in trial, many believed that success would have been offset by the extra cost and time to get to trial. One lawyer called it the difference between a better legal result and a better client outcome;
  • a majority of lawyers (70.4%) and clients believed that their case would have settled at a higher cost if it had not been referred;
  • a majority of lawyers considered that the referral saved legal costs to their client both in cases which did and did not settle there;
  • the mediators were one of the most liked and most disliked aspects of the program;
  • a majority of lawyers "welcomed" the referral;
  • the opt-out process -- in other words presumptively mandatory referral -- attracted negative comment from only a small number of lawyers with a few lawyers commenting that "if the process were not based on an opt-out system, it would be difficult to persuade people to use ADR at all";
  • the majority of lawyers did not see the timing of the referral as a problem;
  • reduced costs and faster resolution of the dispute were the most important reasons given by the majority of lawyers for proceeding with a mediation session; and
  • the two most common things lawyers would change about the program were the scheduling process (it did not allow counsel any choices over scheduling but instead simply notified them of a first date and time) and the mandatory selection of mediator.

Drawing upon the foregoing, the Macfarlane Evaluation arrived at a number of conclusions, including the following: [7]

  • that there is strong and broad approval for the availability of ADR as part of the litigation process;
  • that there is no significant opposition among lawyers or litigants to the mandatory nature of ADR in the pilot program and that referral to ADR should continue on an 'opt-out' basis after the filing of the first statement of defence.

Integration of ADR into the Case Management Model

a.   "Screening" and mandatory referral to ADR

The First Report recommended that "early screening and evaluation mechanisms be built into the caseflow management structure to be implemented in the province". [8] Referral to ADR is one such mechanism.

After further consideration, we are of the view that there should be mandatory referral of all general civil cases to a three hour mediation session, to be held following the delivery of the first statement of defence, with a provision for "opting-out" only with leave of a Case Management Master or a Judge. While this endorsement of mandatory referral to mediation may appear at odds with our earlier recommendation with regard to screening through a Judicial Support Officer (now Case Management Master), we have been persuaded that mandatory referral is the most appropriate option, for a number of reasons.

The evaluation of the ADR Pilot Project found that 40% of the cases referred to mediation resulted in settlement in the very early stages of the case, thereby reducing court caseloads and the costs of litigation. Lawyers reported that legal costs were reduced even for cases that did not settle. In our First Report, we estimated the cost of a typical civil case to a litigant to be in excess of $38,000.00. [9] These costs are substantial and well beyond what the ordinary citizen of this province can afford to pay.

Even where there is no settlement as a result of the referral, the parties are forced at an early stage to evaluate the merits of their case. The research is clear that the opportunity for settlement increases whenever counsel are required to open their file and think about their case in a substantive way -- the "pick-up factor", as it were. This factor may serve to explain why 15% of cases settle before attendance at an ADR session.

The settlement results of the pilot project are impressive. The fact that referral to mediation can achieve an early resolution of 40% of cases within two to three months of the filing of a statement of defence, has caused us to reconsider our earlier view that all defended cases should first go through a form of screening process with what will now be a Case Management Master. Given the limited nature of court resources and the findings of the Macfarlane Evaluation with regard to screening, the Review has determined that the screening and evaluation process is most effectively achieved through an early mandatory referral to mediation.

We have been further persuaded that all types of civil, non-family, cases should be subject to referral to mandatory mediation. In making this recommendation, the Task Force acknowledges the controversy over whether all civil cases are suitable for mandatory referral. For example, there is a common perception that cases involving personal injury claims generally are not candidates for early mediation because the injuries need "to mature" before settlement can be reached. There is also some sense that early mediation in simple collection matters or cases involving straightforward claims for goods sold and delivered may only foster delay on the part of defendants. However, the experience at the ADR Pilot Project does not necessarily bear out these common perceptions. As stated in the Macfarlane Evaluation: [10]

The area of law in which a claim is brought was not considered by lawyers to be as significant in evaluating the suitability of a case for early ADR...[and] the data does not suggest that any of the case types currently referred to the ADR Centre are not susceptible to mediated settlement. Settlement has been successful at the Centre across a wide range of case types.
As a consequence, there appears to be no argument for screening out cases by area of law. Screening out cases by internal case characteristics (such as legal or factual 'complexity', above) seems unrealistic. Such a process would be time-consuming and would risk both unreliability and rigidity. The screening function is better left to a well-informed Bar.

We believe, on balance, that a general referral of all types of civil non-family cases is preferable, provided that the referral process undergoes continuous monitoring and evaluation in order to identify potential problems.

As to the mandatory nature of the referral, the literature on the subject reveals that parties do not opt-in to voluntary systems. [11] The Macfarlane Evaluation also found that counsel were aware of this, and noted that: [12]

A few made the further comment that if the process were not based on an opt out system, it would be difficult to persuade people to use ADR at all.

The majority of counsel who responded to the pilot project evaluation were satisfied with the mandatory nature of the referral -- 58% of lawyers "welcomed" the referral to the ADR Centre. [13] Dr. Macfarlane concluded that: [14]

The evaluation did not find any significant opposition among lawyers or litigants to the mandatory nature of ADR in the pilot programme. Indications of low take up rates from voluntary programmes suggest that the mandatory nature of referral (with the possibility of 'opt-out') should be continued.
She also noted the following comment made by one counsel: [15]
I have no problem with the process being fairly coercive. It is a waste of taxpayers money for so many cases to go to trial. There is plenty of coercion anyway in the litigation system which we accept, for example rules about cross-examination and so on.

It is important that the cost and time-saving benefits of ADR be maximized. This is best achieved, in our view, if participation is mandatory. Accordingly, the Review concludes that referral to ADR must be mandatory subject to an opt-out by exception only by way of a motion to a Judge or Case Management Master. The decision of the Judge or Case Management Master should be appealable only with leave.

RECOMMENDATION

The Task Force recommends the mandatory referral of all civil, non-family, cases to a three hour mediation session, to be held following the delivery of the first statement of defence, with a provision for "opting-out" only upon leave of a Judge or Case Management Master. The session should be conducted by a mediator selected by the parties from a list of accredited mediators or, failing agreement by the parties, by a mediator selected from that list by a Judge or Case Management Master.

b.   The Form of ADR

At the outset, it was contemplated that the court-connected ADR Centre in Toronto would offer both mediation and early neutral evaluation. In fact, very few early neutral evaluation sessions were conducted overall and the Macfarlane Evaluation does not focus on the subject. Where these sessions took place, they were conducted by a judge and usually occurred in connection with a scheduled mediation session and where one or more of the parties felt it was important to have an opinion on the probable outcome of a particular issue. In that sense, early neutral evaluation can help the parties better define their interests for purposes of the mediation session, or post mediation, with regard to further settlement discussions. Early neutral evaluation can play a significant role in the settlement of cases where it is integrated with other forms of ADR and case management.

Members of the Bar are very supportive of an early neutral evaluation option if a referral to ADR is to be integrated into the case management process. We have some concern, however -- based upon the experience at the ADR Centre -- that parties and/or lawyers who generally resist the concept of ADR, will request a referral to early neutral evaluation as a means of avoiding the mediation process. It must be emphasized that the Civil Justice Review has premised its recommendation of mandatory referral to mediation on the basis of the established success of that form of ADR in achieving settlements in the early stages of litigation. It is our view that, while very useful in some circumstances, early neutral evaluation should be the exception and not the rule in the early referral mechanism.

There is always scope for the use of any and all forms of ADR in the dispute resolution process. Other options, such as mini-trials, we envisage being integrated into the process at later stages, if necessary, and in the context of the case management system.

c.   Timing of the Referral

Our recommendation with regard to mandatory referral to mediation includes the requirement that the referral take place after the first statement of defence has been delivered. The timing of the ADR session is another area in which opinions differ. However, we are strongly of the view that early mandatory direction to ADR at the post-defence stage is the most appropriate for the majority of cases. The experience of the Pilot Project indicates that early referral at this stage of the proceeding is not as contentious as had been anticipated. According to the Macfarlane Evaluation: [16]

Some negative comments had been anticipated over the timing of referral to the ADR Centre, which takes place after the filing of the first statement of defence (that is, before close of pleadings in cases involving counter-claims or more than one defendant party). It was expected that counsel in some cases would feel that settlement discussions were premature when they took place before discovery.
However, results suggest that the timing of the referral is not seen as a problem by the majority of lawyers. Survey respondents were asked if they felt that they had adequate opportunity to prepare for settlement discussions given the time of the referral. 79.6% replied that they did, and only 10% cited more time needed to prepare as a reason for asking for an adjournment. Of the minority of all lawyers who complained that the timing of the referral gave them inadequate time to prepare, defendants' lawyers were proportionally over-represented. Defendants' lawyers comprised 70.5% of those who said that they had inadequate time to prepare.
An even larger majority of the interview group (88.2%) replied that the stage at which this case was referred to the Centre allowed them to adequately prepare for settlement discussion. Nearly 60% of this group explained their answer by saying that either the issues were already clear at the stage at which the case was referred (that is, after filing of the first statement of defence), or that the case was not complex and did not need to proceed to discovery in order for settlement discussions to take place.
In her Conclusions and Recommendations, Dr. Macfarlane states: [17]
Settlement before discovery reduces both the number and amount of cost items. Fewer events in the life of a law suit reduce costs to both the user and the taxpayer. Evaluation data shows that the ADR Centre has been successful in increasing the settlement rates for cases between the filing of a statement of defence and discovery. 13% of cases for which a statement of defence has been filed in the Case Management stream settle before discovery. 25% of cases referred to the ADR Centre following filing of a statement of defence are settled at the Centre. Another 17% of cases referred to the Centre settle before mediation. Evaluation data suggests that in some of these cases, referral to the Centre may have provided a catalyst to settlement prior to mediation.

The ADR Project Steering Committee, referred to earlier, is of a similar view. With regard to the minority of lawyers who believe that mediation should not occur until after discovery, the Steering Committee responded as follows: [18]

The Committee feels that this position misconceives the purpose of mediation. Mediation aims to express both parties' interests in the dispute and work on ways in which the dispute can be resolved. Nothing compels the parties to agree to any particular resolution. Therefore, their ability to "win" a fight is less important than their ability to persuade the other side to consider their interests seriously. That can be done early in the dispute.

The Task Force agrees.

d.   Integration with Case Management

Referral to ADR must be effectively integrated with the proposed case management system. We contemplate that such integration will occur in the following way.

First, the initial mediation session will lead to one of the following results:

  1. a mediated settlement; or
  2. if no settlement is reached, either:
    1. an agreement to some other ADR Plan with notification to the relevant Case Management Team and with a "report back" time to the Team to ensure the case stays on the proper track; or,
    2. a referral back to the case management process.

Where the case comes into the case management system -- either in the foregoing fashion or through the failure of the parties to follow through with the referral process in a timely fashion -- an initial case conference will be held with a Case Management Master or Judge who will:

  • canvas again with the parties whether all reasonable ADR channels have been exhausted and, if such is not the case, develop an ADR Plan and timetable for the matter, with the parties' agreement, subject to appropriate "report backs" to the Case Management Team; or,
  • establish a case timetable and place the matter on the appropriate case management track.

The ADR component of case management should not present new opportunities for those who wish to cause delay. It is therefore critical that the referral to mediation be integrated into the case management timetable or "track" and that the overall timetable established for the completion of the case not be unduly extended to accommodate this referral.

In this vein, we feel it appropriate that where a failure to follow through with the mandatory mediation referral procedure cannot be justified by a party or their counsel, the Judge or Case Management Master should have the power to order the party or the party's solicitor to pay costs occasioned by the delay in failing to do so.

Appropriate Form of Service Model and Funding

The Review recognizes that if referral to ADR is to be mandatory, the process needs to be guided by clearly articulated principles. The ADR Project Steering Committee identified the following factors as important for court-connected ADR programs in the policy options presented to the Ministry of the Attorney General: [19]

  • ADR should be equally accessible to all disputants, at least to the extent that the services of the Court now are;
  • ADR should be affordable;
  • if referral is mandatory, the parties should have a choice of who will mediate; the quality of mediators should be high and reliable;
  • the system should be cost-effective to the parties (i.e. they get good value for their money) and to the court system (i.e. disputes get resolved economically and well); and
  • the system can be expanded in due course to the whole province of Ontario.
  • The Review agrees that the model for providing court-connected ADR should ensure that these principles apply.

a.   ADR must be court-connected

Our First Report identified two factors that support the conclusion that ADR programs should be available to the public as part of the "court" system. The first relates to the obligation of the state to ensure the availability of different forums and processes for the resolution of disputes. The second refers to the smooth fit between ADR and a caseflow management system. The results of the Macfarlane Evaluation of the ADR Pilot Project strongly support our earlier recommendation that the concept of court-connected ADR be accepted in principle. The author concludes that: [20]

Mandatory referral should be predicated upon a continuation of the relationship between the ADR pilot and the Ontario Court (General Division). The ADR Centre model (a Court office located away from the Courthouse) was evaluated very positively by both lawyers and clients. It is not known what response would have been given had the service, for example, been located in the Courthouse itself, or alternatively, operated by a private ADR firm. However, one possible interpretation of the very positive evaluations of the Centre's service and facilities is that its supervision by the Court ensures its credibility in the eyes of clients and counsel.

The provision of ADR under the auspices of the Court also ensures the accountability of the service to the Court itself, and through the Court to the public.

b.   Service Model

The appropriate form of ADR service model, in our view, must conform to the following principles:

  • affordability
  • accessibility
  • choice
  • quality
  • cost-effectiveness
  • expandibility

Both the Macfarlane Evaluation and the Options Paper prepared by the ADR Project Steering Committee include service model options. These options also address funding. Essentially, there are four potential models for the provision of court-connected ADR services:

  1. A Court-based system with public employee mediators on staff who are,
    • fully publicly funded through the government estimates process; or,
    • financed on a cost recovery basis through filing fees;
  2. A Court-based system with a mix of staff and private mediators, with the funding options described above;
  3. A Court-based system with private sector mediators who are,
    • paid through public funding mechanisms; or,
    • paid directly by the parties;
  4. A fully private system, in which the Court encourages the voluntary resort to ADR.

Option 4 is not being considered here, as the Review believes that mandatory participation is required in order to maximize the benefits of ADR. In order to protect the integrity of the court connection, it is fundamental that the private ADR providers be properly accredited and that the administration of the program remain the responsibility of Courts Administration, with ultimate responsibility for the supervision of the process residing in the judiciary.

(i)  Staff Mediator Option

The staff mediator option underlines the Court's commitment to the ADR process. It simplifies the issue of quality control and ensures the availability of mediators. As well, it enhances the ability to control costs. At the same time, however, it is the most costly option from the perspective of public funding, and therefore is unlikely to be acceptable to government in the current environment of fiscal restraint.

There are additional problems with this option, from our point of view. From a cost perspective, it is important to note that the mediators must be paid whether a mediation proceeds or not, since they are on salary and "in house". Moreover, the model lacks flexibility in that it limits the parties' right to choose their mediator, a matter which is of concern to the bar and the public, and a right which we believe is important in a "mandatory referral" regime.

(ii)  The "Private" Mediator Option

The use of private mediators gives the parties the greatest amount of choice with regard to their mediator. Such a model contemplates that a roster of qualified mediators will be established and an appropriate accreditation process is in place. We will return to a consideration of the difficulties surrounding qualifications, standards and accreditation later in this Chapter.

There are, however, complications with a pure version of the private provider option. Access may be limited unless mediators agreed to a fixed rate of remuneration that is affordable by all -- a difficult and unlikely exercise. Moreover, a court-connected ADR program depending exclusively on external private mediators might not be possible in those parts of the province where there are not enough mediators, or not enough mediators with sufficient expertise, to ensure a reliable supply within a case managed timeframe.

Further, as we have said, if the mediation process is to be mandatory, parties should have the option to choose any mediator who is on the roster. But what if the desired choice is to go "off roster"? This is a troubling question because the court-connected nature of the mandatory referral process makes it equally imperative that the Court and the public be assured that mediators have been accredited. At the same time, there is a strongly held view among members of the bar that the parties should be able to resort to any mediator they perceive to be qualified and to pay that mediator's fees at the market rate. Similarly, they argue, the parties should have the option, at their own cost, to schedule more than one session with a mediator, or to come back to the mediator at a later stage in the litigation.

There is much to be said in favour of freedom of choice on the part of the parties and counsel. However, the integrity of the court-connected mandatory referral system that we envisage leads us to conclude that, in the first instance, the parties should be confined to "on roster" mediators, and that the fee for the first three hour session should be regulated. If the parties wish to make arrangements with the mediator for a further session, they may do so at whatever market rate they can negotiate.

Nonetheless, we do not rule out altogether resort to an "off roster" mediator. At the initial mandatory referral stage of the process, however, we believe that retention of "off roster" mediators should be permitted only with leave of the Case Management Master or Judge. In this way, the Court and the public will have some comfort that the person selected, although not on the accredited roster, is nevertheless qualified.

(iii)  The Mixed Panel Option

The mixed panel option carries with it most of the pros and cons of each of the separate options. However, a mixed panel comprised of a small core of staff mediators -- either full-time or on contract -- along with an accredited roster of private sector professionals would ensure a supply of qualified service providers, particularly in those areas where the ADR industry is not yet sufficiently established.

Given the importance of choice of a mediator in a mandatory referral scheme, this option has much to offer. A roster of accredited private ADR providers best ensures that parties will have a number of mediators to choose from, while the availability of staff mediators ensures the availability of accredited mediators in areas where there are insufficient qualified private mediators.

RECOMMENDATION

The Review recommends that court-connected mandatory referral to mediation operate with a roster of accredited private sector mediators and that a mixed panel of staff and private sector mediators be made available in those locations where there is an insufficient supply of qualified private sector mediators.

c.   Funding

(i)   Cost Recovery

As courts are funded out of tax dollars, it can be argued that ADR should be funded in the same way -- particularly if it is court-connected. In a continuing climate of fiscal restraint and reduced funding from all levels of government, however, it is not realistic to expect that sustained financial support will be forthcoming to provide for a fully subsidized province-wide program. What is required is a service model that will minimize costs both for the taxpayer and litigants.

Minimizing costs to taxpayers, in our view, requires that a cost recovery model be used to fund the ADR system. In addition, if costs to litigants are to be minimized, the use of such a model dictates that the cost of the service provided be controlled. Otherwise users cannot be assured that the ultimate expense will not be so high as to deprive them of access to the most appropriate dispute resolution technique. Further, if a cost recovery approach to funding is to be used, it is important to determine from whom those costs will be recovered.

(ii)  Imposing an ADR fee at the point of filing or at the time of referral

If a dedicated ADR fee were imposed in all actions, we believe that the costs of implementing and administering the court-connected ADR program could be recovered. The technique of using a general surcharge on court filing fees to fund ADR is used successfully in California, for instance, and Professor Frank Sander, a recognized expert in the field, advocates that such a system is fairer than ADR user-pay fees "since the costs of improving the public dispute system are spread over all litigants, not simply imposed on the immediate disputants seeking to avail themselves of ADR procedures." [21]

We recommend that a fee be imposed at the commencement of the litigation, when the claim is issued, and also upon the filing of a statement of defence. While it is arguable that only those cases that are defended and referred to mediation benefit from the actual ADR session and, therefore, that other litigants should not have to pay, all participants in the system, and the public as a whole, benefit by having a process in place which leads to earlier settlements and less costly litigation. At the present time, our litigation process does not offer litigants their first settlement mechanism -- the pre-trial -- until after the matter has been listed for trial and a fee of $268 has been paid. In non-case managed settings, listing for trial typically does not occur until 2 or 3 years after the commencement of the case.

There are other methods of achieving the principles of affordability and accessibility in the funding of ADR procedures. One of those, as mentioned, is to require only the referred parties to pay for the mediation session and to establish a pro bono system for impecunious litigants. Such a system of needs assessment would ultimately prove difficult and costly to implement in a mandatory referral scheme and, in our view, the imposition of an additional fee on the broadest number of cases responds best to the tests of affordability, accessibility and cost-effectiveness referred to earlier.

If all litigants share the burden of funding the ADR system, the program can be provided at a much lower cost per litigant, and the imposition of a fee on all actions would remove any disincentive to use mediation. It is also preferable, in our opinion, that litigants pay one fee and that the Court, in turn, disburse the payment to the mediator chosen from the roster. In the first place, filing fees paid to the Ministry will finance the program. In the second place, the public is unlikely to accept, readily, the concept of having to pay a filing fee as well as a fee to the mediator. Finally, there will be much greater difficulty in gaining acceptance for regulating the private mediators' rates if the fees are not paid through the Court. [22]

The Civil Justice Review believes that a court administered ADR program can be funded through an additional filing fee of between $100 and $115 per party. This conclusion is based upon the imposition of such a fee on the party commencing the action, at the time of issuing the claim, and on defendants, at the time of filing their statement of defence. The calculations are rough, but they are predicated upon a three hour mediation session, with one hour of preparation time and some margin for administrative costs, and upon an estimate of the number of cases initiated, a 40% defence rate, and approximately 1.2 defendants on average per case. We estimate that such a scheme would pay the mediators at a rate of approximately $100 per hour for a three hour mediation session and one hour of preparation time.

RECOMMENDATION

We recommend that the court-connected mediation program be funded on a cost recovery basis from filing fees paid by all parties to an action.

We further recommend that, in order to contain the cost of a court-connected mediation program and ensure its affordability and accessibility, court roster mediators be paid a regulated fee.

(iii)  Segregation of the ADR Fee

If the ADR program is to recover its costs from litigants and to disburse some of those fees to private sector mediators, a method must be found to segregate a portion of the filing fees for this purpose. At present, monies received by court offices are deposited to the province's Consolidated Revenue Fund and merged with the government's overall revenues. As discussed in our First Report: [23]

Consideration might be given, it seems to us, to redirecting some of those revenues, at least notionally, to modernizing and retro- fitting the civil justice system for the rest of the 20th and into the 21st century. At the very least, any savings that may be attributable to the re-design and re-organization of the system should be available to finance the changes necessary to bring about that re-design and that re-organization.

In some jurisdictions in the United States, ADR surcharges are imposed on court filing fees and the funds so generated are earmarked to offset fully the cost of operating the ADR service. An advantage of the surcharge is its visibility and the fact that it can be rationally connected to the services it supports. If it is established through ongoing evaluation that court-connected mediation should be discontinued, the surcharge should similarly disappear.

Ontario's experience with surcharges has been limited to surcharges for fines in criminal matters but this practice may provide a useful precedent in establishing a cost recovery model for ADR.

RECOMMENDATION

We recommend that the Ministry of the Attorney General and Ministry of Finance should investigate the possibility of imposing an ADR surcharge or some other regulatory scheme in order to segregate the ADR filing fee or surcharge from the Consolidated Revenue Fund.

d.   A principled approach to court fees

Our recommendation that ADR be provided on a cost-recovery basis through the imposition of additional filing fees or a surcharge may appear to be at odds with the Review's concerns about the already high costs of litigation. We do not believe this to be so.

In Chapter 4.2 of our First Report, we listed the various stages in the present court process and set out the corresponding fees. In a typical court case which is listed for trial, fees paid will likely be in the vicinity of $750. Of this amount, the single largest fee is the $268 which it costs to list a matter for trial -- an event that is estimated to occur in only 5% of all cases. On the other hand, the ADR Pilot Project has demonstrated that mediation referral leads to the settlement of more cases earlier in the proceedings, thereby avoiding the more significant costs that are otherwise incurred later in the proceedings. In our view, therefore, it is preferable to impose an additional modest ADR surcharge fee at the beginning of the litigation, because all concerned -- including the public in general -- will benefit from the fruits of the ADR program.

Throughout our public consultations, we were repeatedly advised by members of the public that they had spent large amounts of money in the course of litigation only to settle in the end. We were repeatedly told how they felt excluded by the litigation and decision-making process. With the exception of the oral examination for discovery, much of the litigation process occurs without the litigant's participation, unless the matter proceeds to trial. It is difficult for litigants to relate the costs of the lawsuit to their own involvement with the case. With early mediation, the litigant is involved in the process immediately, and the connection between the fee and the process is clear.

The Review is not only concerned with "costs", but with what is "cost-effective" as well. Our concerns with regard to the high cost of litigation can be reconciled with the imposition of an additional fee where it can be demonstrated -- as it has been -- that the program which is funded by such a fee has the real potential to avoid or reduce litigation costs in the long run. We believe this to be the case with the ADR program.

In the final analysis, we are convinced of the need to develop overall policies with regard to setting court fees in the dispute resolution process. When one examines the current tariff [24] , it is difficult, if not impossible, to discern the policy basis for establishing some fees. Why should a motion cost only $48 and a trial record cost $268 when we were advised that the former creates so much more work for the Court than the latter? Clearly the time has come to establish policies for fees that reflect and support the case management policies of the Court.

RECOMMENDATION

We recommend that a Working Group comprised of representatives of the Ministry of the Attorney General, the Judiciary, the Bar and the Public be established to consider the matter of court fees and to develop principles and procedures with regard to establishing their amount.

Accreditation

The First Report of the Civil Justice Review highlighted the need for generally accepted standards for the ADR profession. Pending our Supplemental and Final Report, we asked Christine Hart, then the Director of the court-annexed ADR Centre, to explore several subject areas relating to the qualifications of court roster mediators. These areas included:

  • standards for court roster mediators
  • elements of a training program
  • experience
  • grand-parenting
  • continuing education
  • ensuring continuing competence
  • code of ethics
  • court orientation, and
  • a body to oversee start-up

As part of Ms. Hart's inquiry, more than 300 letters were sent out requesting input from mediators, judges, members of the public who had used mediation services, tribunals employing mediation in their process, ADR educators, and lawyers across Ontario. A public consultation meeting was held in October 1995 in Toronto. Approximately 60 people attended the meeting and oral presentations were made by mediators, educators, lawyers, mediation managers, representatives of the Law Society of Upper Canada, the Arbitration and Mediation Institute of Ontario and the Advocates' Society. An additional 24 written submissions were received subsequently.

Ms. Hart prepared a paper for the Review, entitled Qualifications of Court Roster Mediators in Civil, Non-Family Cases, to which we have earlier referred. She found that there were no set answers to the questions raised in many of the areas canvassed. In the end, she came to the following conclusion respecting the qualifications of a court roster mediator: [25]

The only thing that is clear is that courts should not be looking for a single "perfect" qualification for a competent court roster mediator. What can be said, however, is that with a growing body of knowledge drawing both on the theoretical and on-the-ground experience, courts are increasingly able to identify the skills, experience and predispositions that are most likely to be found in a successful mediator, and to design an application process in which the applicant's knowledge and use of those skill can be fairly assessed.

Drawing upon the work encompassed in the paper, and upon other available research and experience, it seems to us that there are a number of key factors which, at a minimum, need to be reflected in any qualification/accreditation standards for court-roster mediators. They may be grouped in the following categories:

  • training
  • experience
  • whether a legal background is necessary
  • adherence to an ADR providers' Code of Conduct, and
  • the need for liability insurance

a.   Training

Forty hours of non-practice training is the current standard for a number of court-connected programs in the United States and other jurisdictions, and for a variety of ADR professional organizations. This standard, however, is being questioned. For example, the Ontario Association for Family Mediation and the Academy of Family Law Mediators now require 60 hours of training and are considering recommending twice that number, in addition to 20 hours of continuing education every two years. Whatever the number of hours for this type of training, the critical issue is the content of that training: it must produce competent mediation skills.

b.   Experience

Experience standards for court roster mediators can be measured against the total number of mediations actually completed or they can be measured against the number of hours of practice. Standards vary broadly. For example, the Arbitration and Mediation Institute of Canada requires five mediations brought to resolution in the last year, and five years in the field for its Chartered Mediator designation. There is a recognized standard for family mediators of 100 hours of supervised practice.

It was suggested at the consultation meeting held in October 1995 that the adopted standard be 100 hours of supervised mediation practice or five completed mediations, whichever came first. Five mediations, based on our model of a three hour session, would fall considerably short of the standard of 100 hours. We note that the suggested standards make no reference to successful mediations, and it may well be difficult to determine success on the basis of settlement results alone.

What skill is to be gained from the experience requirement? This is a helpful question to ask, because it may be that all or only some of the skills in question are important. Is it reassurance that the ADR provider is comfortable in dealing with professional advocates? Is it skill in assisting parties to reach settlement? Is it an ability in a particular subject area? As Ms. Hart states: [26]

The types of mediation experience thought important will obviously be different for each program, but without any analysis of what the program hopes to learn from an examination of the court roster applicant's previous experience, picking a required number of mediations seems to be a rather meaningless exercise.

c.   Legal Background

A review of research in court-connected mediation programs in the U.S. has shown that legal training is not a predictor of ability and skill as a mediator. Indeed, legal training as an advocate may sometimes make it more difficult to assume the non-judgmental role that is required of a mediator. Needless to say, of course, there are many skilled mediators who also happen to be lawyers, just as there are many who are not.

Nonetheless, whether legal training is required or not, there is recognition in the industry that court roster mediators must have a knowledge of the civil process that will be accessed if the dispute is not mediated successfully. In some instances, such as family law, it is critical that mediators have an awareness of the legal rights and entitlement of the parties. [27]

d.   Liability Insurance

Liability insurance is not an area to be ignored. Already there have been a limited number of cases, we understand, in which proceedings have been commenced alleging that a court-connected mediator exercised undue influence on a party to settle. Other kinds of complaints can easily be foreseen. If private sector mediators are to provide court-connected mediation services, it is essential, in our opinion, that they carry liability insurance to protect clients -- and themselves -- in the event of professional negligence, and to ensure that the principled nature of the process is upheld.

e.   Conclusion

The Civil Justice Review has not attempted to formulate with any precision the standards and qualifications which should apply to court roster ADR providers. We do not see that as our role. There is clearly a variety of views in the ADR community on these issues and, as Ms. Hart has pointed out, there is probably no single view which is a complete fit for the type of court-connected program recommended. As ADR's flexibility in "fitting the forum to the fuss" is one of its hallmark characteristics, so, too, should a flexible and tailored approach be taken to developing appropriate qualification and accreditation requirements.

We believe the time has come for the ADR service providers themselves to collaborate and articulate the criteria for court roster mediators. If the Court is to require referral to mediation as part of the case management process, it is in the interest of ADR professionals to respond to the call for an appropriate accreditation process. We urge the Government, in conjunction with the Court, the Bar, ADR service providers and the users of such services, to establish a satisfactory process to develop standards and an accreditation process for this growing industry.

RECOMMENDATION

We recommend that the Government of Ontario, in conjunction with the Court, the Bar, ADR service providers and the consumers of such services, establish a consultation process which will lead to the development of standards and an accreditation process for ADR providers in Ontario, with a view to having such standards and accreditation process in place within a one year period.

In the interim, until such time as a province-wide process is in place, we recommend that prospective court roster mediators be required to submit to an application procedure in which mediation training and experience, as well as knowledge of the court process, are assessed. We suggest that the ADR Project Steering Committee be authorized to develop criteria for this assessment process, and that Local Advisory Committees be struck to review prospective mediator applicants based on those criteria, and to implement and monitor court-connected ADR programs where established.

ADR and Family Law

a.   Referral to ADR in Family Law Cases

We do not want to leave the subject of ADR without a reference to its role in family law matters. The Family Law Working Group is developing a family law model with respect to ADR in the context of the new "early resolution focused" process for family law proposed in our First Report. In this regard, we stated: [28]

The revised process stresses, through initial screening and diversion during the court proceedings, the importance of mediation and other dispute resolution options, where appropriate. The Review supports the availability of alternate dispute resolution facilities in family law matters, under judicial supervision, keeping in mind the importance of guarding against power imbalances which may exist between parties in such settings.

The place of ADR in family law matters cannot be addressed without first acknowledging the extent to which ADR mechanisms are already in place in that area. Indeed, many ADR techniques were pioneered there. Moreover, negotiation has always played a particularly important role in resolving family law disputes. Domestic contracts, for example, play a significant role in pre-planning the resolution of matrimonial conflicts. In addition, family law dispute resolution frequently calls on the expertise of outside professionals for assessments and counselling, and mediation services have long been a part of the process.

Family law is fertile ground for the use of ADR techniques. Where the parties have children, their relationship as parents must survive the dispute resolution process -- difficult as that may be. ADR is an appropriate process in such cases because, as opposed to a more adversarial process, it supports the preservation of long term relationships. As well, the desire to preserve the assets of a marriage for the partners and their children can also provide a powerful incentive to seek less costly adversarial solutions.

What has been lacking, however, is a systemic approach to the delivery of ADR services in family law matters. Moreover, the current litigation process exacerbates the already acutely confrontational elements of these cases by conferring a tactical advantage on the party who achieves the first success in an interim order of the Court.

At the same time, however -- while recognizing a climate which favours the role of ADR in family law -- one cannot ignore the existence of acrimony between the parties, and the presence of spousal abuse problems and power imbalances, all of which may skew the resolution process away from an alternate dispute resolution focus and even make the circumstances inappropriate for such methods.

The streamlined process for family law which we described in our First Report is an attempt to moderate those aspects of the court process that exploit the acrimony between the parties and block the search for more co-operative solutions. This newly designed process creates two distinct opportunities to integrate ADR services within a case-managed environment.

The first of these opportunities occurs in connection with the Information Centres that we described as part of the early education process. We stated: [29]

In each courthouse, an information service should be available to outline the details about court proceedings -- what is required and what can be expected. It is hoped that information about local family law lawyers and alternate dispute resolution resources would also be available, stressing the value of the client and his or her needs. For cases involving children, information about the impact of parental separation and court proceedings would be available.

We went on to recommend that an information services video be prepared and that, except in emergency cases, parties should be required to view the video prior to instituting a court proceeding. We also proposed changes to the originating process for family law proceedings to include a section where the prospective litigant will be asked to describe what efforts have been made to use alternative dispute resolution techniques before resorting to the courts.

The second opportunity for the integration of ADR into a case-managed process will occur at the first family law case conference, which we propose be scheduled before a judge within two weeks of the deadline for filing a response. It is contemplated that early judicial intervention will take place before the first motion in order to avoid the "affidavit wars" which currently characterize interlocutory proceedings in family law disputes. At the first case conference, an overall case management regime would be established for the case, if settlement cannot be achieved and opportunities to consider how mediation might resolve all or part of the case would be explored again.

It is contemplated that the case management judge would play a more active role in the ADR referral process than might otherwise be the case in general civil matters. ADR in family law involves more than the mediation of interests, but also legal rights which are inextricably interrelated. While this dichotomy can be found in all civil disputes, it is of heightened importance in certain aspects of family law matters, having regard, in particular, to the impact of settlements and decisions on children. Thus there is an important function to be performed by judicial supervision in these circumstances.

RECOMMENDATION

We reiterate our previous recommendations made in the First Report, that:

  • the use of ADR in family law matters be considered at both the pre- and post- application stage of the proceedings;
  • that, at the pre-application stage, potential family litigants be required to consider the use of ADR and indicate in the originating process whether they have used ADR techniques and, if not, why;
  • that, at the post-application stage, the appropriateness of referral to ADR be considered at an early mandatory case conference to be held within two weeks of the deadline for the filing of the Response.

b.   Service Delivery and Funding

At the present time, there is veritable melange of ADR service delivery models in existence in the family law field. A few court locations have staff mediators on site. The new Family Court sites (that is, the expanded Unified Family Court sites) feature mediation services contracted for by the government. Differing community resources offer a variety of counselling and mediation services at a wide range of prices, including a number of services which are available for free. Legal Aid now requires settlement conferences as a condition precedent to authorizing a certificate to proceed to court; but in a large number of cases, the parties pay for these services themselves.

Applying a consistent model is difficult given the landscape of family law litigation in Ontario. Family law matters are currently dealt with in three different courts -- the Ontario Court of Justice (General Division), the Ontario Court of Justice (Provincial Division) and the expanded Unified Family Court. Even within the individual courts there exist differences in procedures and handling of cases. The province-wide implementation of the Family Court will resolve these problems eventually, but this initiative will not be completed in the short term.

It is not expected that government will be able to fund any more mediation services and again we are forced to consider other cost-effective models. We have recommended a surcharge to fund mediation in civil matters. This is problematic in family law given the fact that, at present, the Ontario Court of Justice (Provincial Division) does not impose any fees. Unlike the delivery model proposed for civil cases, we do not recommend, at this time, that all family law cases be referred to mediation after a case is defended. The new family law process that we have recommended emphasizes pre-application ADR and early judicial intervention. Under judicial supervision at an early case conference, selective referral to ADR will take place.

In other respects, the information services which we have proposed will serve to co-ordinate information with regard to available ADR services in the community and the cost of those services. Once a proceeding has been commenced, a panel of court approved ADR service providers could be used in cases where mediation is thought to be useful. As a condition of being on the panel, mediators would be required to provide services at a regulated fee, as well as pro bono services for those clients who cannot afford to pay. Needs assessment for these cases will not be as difficult as in civil cases since the Court will have access to financial information about the parties as part of the court record. At this time, Legal Aid authorizes a disbursement for up to five hours of mediation services. In this way, both access and affordability may be ensured for all.

RECOMMENDATION

We recommend that mediators used for family law matters must be on a court approved roster.

We further recommend that, as a condition to being on the roster, family law mediators be required to provide services at a regulated fee, as well as pro bono services for those clients who cannot afford to pay.

c.   Child Protection Cases

Consideration must also be given to the appropriate role of ADR in child protection matters.

In child protection services today, workers are expected to ensure the safety of children and where possible to work with families, in a constructive and supportive manner, to strengthen the family's parenting capacity. Not all child protection matters come before the courts and the child welfare system has a legislative mandate to provide an array of services to clients on a voluntary basis. These services include counselling services which have a mediating dimension in many ways.

There are, however, many cases where it is essential to use the court, both to ensure a child's safety and also to address the public's interest in the treatment of society's children.

Within this context, the use of mediation in child protection work is complex and the trading off of interests is generally viewed as inappropriate and risky. Hence, there is a strong resistance to the use of mediation even where it is mandated, as is the case in Nova Scotia.

Both the British Columbia and Nova Scotia child protection legislation sanction the use of mediation at any stage. [30] A Nova Scotia study reports that 67% of child protection cases in Nova Scotia over a 14 month period were successfully mediated before any court involvement. [31] The range of issues being mediated was very wide, but a key to success was a clear set of referral criteria as every case is not suitable for mediation. Studies of mediation in child protection have been hampered by small sample size and absence of control groups. Yet, some benefits have been identified by these projects including the Centre for Child and Family Mediation in Toronto. A high rate of dispute resolution and user satisfaction was reported in mediated cases in Toronto. [32]

Some other benefits noted in the literature are significant cost savings, speed of resolution and durability of agreements.

Despite the historic resistance, there is growing evidence and recognition that mediation can be a useful tool in child protection cases. [33] Accordingly, the Task Force makes the following recommendations.

RECOMMENDATION

We recommend the establishment of a Task Force to design a mediation process appropriate for child protection cases, including the establishment of province-wide criteria for case referral.

We recommend that, at this time, referral to mediation in child protection cases be voluntary and the consent of all parties be required.

We recommend that the government pilot and evaluate the results of child protection mediation in at least three sites in the province.

We recommend the establishment of a joint educational initiative directed at the family bar and child welfare personnel on the subject of mediation in child protection matters.

We recommend that the government consider amending the Child and Family Services Act to facilitate access to mediation at any point in the court process, but respecting the principle of early intervention.We recommend that mediators used for child protection cases must be on the court roster and must have specific child welfare training.


Footnotes:

[1] First Report of the Civil Justice Review (Toronto: Ontario Civil Justice Review, March 1995), at p.210 [hereinafter "First Report"].
[2]Id., at p.223.
[3] Law Society of Upper Canada, Alternatives: Final Report to Convocation, The Law Society of Upper Canada Dispute Resolution Subcommittee of the Research and Planning Committee, (February, 1993); as referred to in Alternative Dispute Resolution and Canadian Courts: A Time for Change, prepared for presentation at the Cornell Lectures, Cornell University, July 1994, by the Honourable Mr. Justice George Adams and Naomi L. Bussin, at p.27.
[4] Professional Conduct Handbook (Toronto: Law Society of Upper Canada, 1996 edition), at p.35.
[5] Practice Direction - ADR Centre (1994), 16 O.R. (3rd) 481, at p.483.
[6] Dr. Julie Macfarlane, Court-Based Mediation for Civil Cases: An Evaluation of the Ontario Court (General Division) ADR Centre (November 1995) [hereinafter "Macfarlane Evaluation"]. Dr Macfarlane's evaluation covers cases referred to the Centre from January 1, 1995 to September 30, 1995.
[7] Id., at pp. 71 - 73.
[8] First Report, supra, note 1, at p.223.
[9] Id., at pp. 143 - 144.
[10] Macfarlane Evaluation, supra, note 6, at p.72.
[11] See, for example, Rosenberg and Folberg, "Alternative Dispute Resolution: An Empirical Analysis" (1994), 46 Stanford L. Rev. 1487; and Brazil, "Institutionalizing Court ADR Programs", in Sander (ed.), Emerging ADR Issues in State and Federal Courts (Chicago: ABA Litigation Section, 1991) 52.
[12] Macfarlane Evaluation, supra, note 6, at p.26.
[13] Id., at p.24.
[14] Id., at p.72.
[15] Id., at p.26.
[16] Id., at p.25.
[17] Id., at pp. 71 - 72.
[18] ADR Project Steering Committee, "The Future of the ADR Centre - Policy Options" (December 1995), at p.9.
[19] Id., at p.4.
[20] Macfarlane Evaluation, supra, note 6, at pp. 73 - 74.
[21] Frank Sander, "Paying for ADR" (1992), ABA Journal 105, at p.105.
[22] See Christine Hart, Qualifications of Court Roster Mediators in Civil, Non-Family Cases (October 1995), at p.8 (a paper prepared for the Civil Justice Review).
[23] First Report, supra, note 1, at p.141.
[24] O.Reg 293/92, am.O.Regs. 272/94;359/94;802/94.
[25] Supra, note 22, at pp. 9 - 10.
[26] Id., at p.12.
[27] Id., at p.15.
[28] First Report, supra, note 1, at p.279.
[29] Id., at p.276.
[30] The Child, Family and Community Service Act, S.B.C. 1996, s.22 and the Children and Family Services Act, S.N.S. 1990, c.5, s.21(1).
[31] Savoury, Beals and Parks, "Mediation in Child Protection: Facilitating the Resolution of Disputes" (1995), 74 Child Welfare 743.
[32] Levinger and Rubin, "Bridges and Barriers to a More General Theory of Conflict" (1994), 10 Negotiation Journal 201, at p.204; and Maresca, "Mediating Child Protection Cases" (1995), 74 Child Welfare 731.
[33] Marvin M. Bernstein, Child Protection Mediation: Its Time Has Arrived (February 1996) (research paper submitted to Osgoode Hall Law School, Toronto, Ontario)

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