There are two general types of mediation practised in Ontario: facilitative and evaluative.
In facilitative mediation, the mediator asks questions, validates, and normalizes the parties’ points of view, and helps them find and analyze options for resolution. Facilitative mediators do not make settlement recommendations to the parties or provide their own opinion on the outcome of the dispute.
In evaluative mediation, the mediator assists the parties in reaching a resolution by pointing out the weaknesses of their cases based upon both a legal and factual analysis and offers advice on what a judge or jury would likely do. An evaluative mediator might make formal or informal recommendations to the parties on the outcome of the issues or provide a suggested settlement amount.
Most evaluative mediators are former judges or lawyers with a particular expertise in the area of business or law at issue.
Most mediators use some facilitative and some evaluative techniques depending on their individual skills and predilections as well as the needs of a particular case. It is helpful to be clear with the mediator, in advance, about the preferred style of mediation for achieving the best
The potential advantages of mediation include:
• The flexibility to negotiate a settlement structure not available in a court judgment or arbitration award. This includes structuring the settlement in a tax advantageous manner, satisfying payments over time, providing security for payments, confidentiality, and “speak well” clauses.
• Preserving the business relationships with minimal risk.
• Providing each party with a peek at the opposing side’s case without formal discovery.
• A high chance of settlement. Statistics generally indicate a very high settlement rate in mediation. In the United States, for example, the CPR Institute for Dispute Resolution has reported success rates exceeding 80 per cent for its mediations.
There are certain practical and strategic issues to consider prior to engaging in the actual mediation process:
• Initiating the mediation: There is really no disadvantage to initiating the mediation process.
• Selecting the mediator: Facilitative mediation requires someone experienced in the mediation and legal process generally but who isn’t necessarily an expert in the subject matter of the dispute. If the parties want an evaluative mediation, it is important for the mediator to be an expert in the field of the dispute. Alternatively, a well-respected former judge, particularly one who presided over commercial disputes, can also be very effective and is generally a quick study.
• Pre-mediation preparation: It is clearly advantageous for each side to prepare and deliver a reasonably thorough mediation or settlement brief setting out the issues in dispute, annexing key documents, and presenting a summary analysis of the applicable law and expectations of the party.
• Determining who should be present at the mediation: Participants in the negotiations should include those who have the power or authority to make a decision and know and understand the issues in dispute. One commentator has noted that chief executive officers settle more cases than vice presidents, in-house counsel or other agents.
• Developing the negotiation or settlement target strategy: A party should understand its settlement goals, consider creative solutions, and realistically quantify what its case is worth, including any interest and costs. It is also important to estimate a party’s best and worst alternatives to a negotiated agreement.
• Setting the ground rules: A mediator may want an initial conference call with the parties to discuss various logistics including the nature of the issues in dispute, the time and place of the mediation, who will be in attendance, the type of mediation statements required, and any pre-mediation issues.
Mediation almost always begins with all parties meeting together in one room. The mediator then explains the mediation process to everyone present. Generally, each side makes an opening statement not longer than 15 or 20 minutes, but some mediators dispense with that and go straight into caucus mode.
Once the mediation is underway, each party and its counsel meet to caucus in separate rooms. The mediator then comes in seeking to better understand the party’s position and what it wishes to offer the other side. If it is an evaluative process, the mediator will typically provide feedback and then take the offer to the other side. There may also be information the party wishes to convey to the other side.
The mediator will typically elicit a series of offers from both sides. Hopefully, as the day proceeds and more information comes out, the offers become closer.
In the event the parties come to an agreement in principle during mediation, they need to memorialize their agreement in writing. The parties should not leave the mediation without signed minutes of settlement setting out the essential terms of the agreement.
In an adversarial system that is prone to long delays, extensive legal fees, and court-imposed decision-making, mediation offers parties to a dispute the chance to resolve their issues in a manner that is quick, free of risk, and relatively inexpensive.
While mediation does not always yield a successful settlement, the process nevertheless provides insight into the other party’s case and the relative strengths and weaknesses of each side’s position. At the very least, it moves the parties toward a range of possible resolutions.
Steven Goldman of Goldman Hine LLP acts as a mediator and arbitrator in franchise and other commercial disputes and has planned and implemented commercial reorganizations and restructurings. He is the former president and CEO of Speedy Auto Service and Minute Muffler in Canada.