As of January 1, 2010, new rules have come into effect with respect to mandatory mediation for court actions that are commenced in Toronto, Ottawa and Windsor. In many cases, the changes will impose mandatory mediation onto the litigants at an earlier stage in the court proceedings. The thrust behind the changes are to ensure that the cost of litigation is not disproportionate to the amount at stake. However, in some instances, early mediation may, in fact, increase costs and hinder resolution.

For new actions commenced after January 1, 2010, mandatory mediation must occur within 180 days after the first defence is filed. In Toronto, for those cases in existence prior to 2010, mandatory mediation must be completed within 180 days from January 1, 2010 – that is, by the end of June 2010. Previously, in most cases other than wrongful dismissal actions and those actions governed by the simplified procedure, mediation did not have to occur until the stage of the proceedings at which the parties agreed that mediation was most likely to be effective. Now, if mediation is not held within the timeframe (or if there is no consent or court order to extend the time for conducting a mediation), a mediator will automatically be assigned.

The new rules do not remove the discretion of the court to extend the time before which a mediation is to be conducted. In those circumstances where the other side will not provide its consent, a court order may be sought and a court will consider such factors as the number of litigants, the complexity of the issues in the lawsuit, whether the mediation will be more likely to succeed once evidence is obtained through the discovery process, and whether given the nature of the case or the circumstances of the litigants, the mediation will more likely succeed if the time period is extended.

In those cases in which the issues are not complex and the evidence is not extensive, these rule changes could be very effective in settling litigation before legal costs begin to spiral. However, there is the danger that especially in more complex litigation, if parties are forced into mediation before all of the evidence is available and before the discovery process is completed (which will likely be difficult to accomplish within 180 days), there will be fewer settlements at mediation, which therefore defeats the intent of the rule changes. Where one of the litigants seeks an extension of time before mediation is conducted, but the other refuses to consent, a motion will be required, thereby increasing legal costs. In addition, early mediation may result in a party feeling pressured into a settlement before it has the opportunity to obtain sufficient evidence.

Although the amendments to the rules governing mediation are not extensive, they could have an impact on how the litigation is conducted.
If you have any questions about the changes to the rules, please do nohhesitate to contact Albert Campea acampea@kmblaw.com.