If Alternative Dispute Resolution is the future path of litigation, then the Federal Court of Canada is leading the way. In a judicial system which pits an increasingly litigious society against scarce judicial resources, the inclusion of court-involved alternative dispute resolution services for the first time in the Federal Court Rules, 1998 not only provides litigants with access to forms of dispute resolution that are both free and speedy but which are also proving to be tremendously successful.
Rule 386 of the Federal Court Rules, 1998 provides that the court may order that a proceeding, or an issue in a proceeding, be referred to a dispute resolution conference. The dispute resolution may take the form of a mediation, an "early neutral evaluation," or a mini-trial.
Early Neutral Evaluation
According to Federal Court Prothonotary, Mr. Roger Lafrenière, an early neutral evaluation is often used in cases which present a significant legal question on which the parties cannot agree and the resolution of which will largely settle the dispute between them. An early neutral evaluation is conducted by the written presentation by each party of its best case. The parties submit a dispute resolution brief containing the pleadings, brief submissions and key documents. As no witnesses are heard, cases which turn on contentious facts and issues of credibility will not lend themselves to resolution by this means. The evaluation may be delivered orally or in writing and is subject to the same delays as any regular decision in the Federal Court.
According to Prothonotary Lafrenière by far the most oft-resorted to of the three alternatives, is mediation. Litigants tend to prefer mediation according to Prothonotary Lafrenière because it is requires less preparation (and hence fewer resources) than an early neutral evaluation or mini-trial and usually results in a quicker resolution. Litigants can also reveal as much or as little about their case in the process. Mediation can take place at any stage of the proceedings; as early as the delivery of a Statement of Claim; or as late as one month before trial.
Prothonotary Lafrenière heralded the tremendous success rate of the cases that have been mediated under the Federal Court Rules. In fact, he estimates that the success rate is well over 80 per cent, although even this figure is conservative given that some mediations, although they do not result in an immediate resolution of the dispute, nonetheless contribute to an eventual settlement. Prothonotary Lafrenière acknowledged that such a high success rate may well be attributable to the fact that alternative dispute resolution conferences in the Federal Court, unlike the Ontario Superior Court, are not mandatory. This means that it is more likely that only the cases that are amenable to such resolution, are proceeding.
Court-ordered Dispute Resolution
Rule 386(1) of the Federal Court Rules permits the court to order a dispute resolution conference on its own initiative. Prothonotary Lafrenière advised that, while he is loath to make such an order, he has done so. One of the factors that he will consider is whether the cost of the litigation is likely to exceed the relief being claimed. Prothonotary Lafrenière is well aware of the "law of diminishing return" and the fact that eventually parties will have invested enough of their time and money that it leaves little room for the possibility of a truly successful outcome.
Rule 386(1) also permits a party to move for an order for a dispute resolution conference where the party opposite will not consent. Prothonotary Lafrenière suggested that in such cases an order may well issue given that there is a sign of flexibility on the part of at least one party. Indeed, Prothonotary Lafrenière suggested that in such circumstances the onus may well fall on the party who is opposing the motion to show cause why the court should not make the order.
Prothonotary Lafrenière advised that, to date, he has yet to conduct a mini-trial. Given the non-binding nature of these alternative dispute resolution services, it is unlikely that parties will wish to go to the expense and expend the time necessary to conduct a mini-trial. A large case will be difficult to do in summary fashion and if the case is small, litigants might as well proceed to trial in the regular course and obtain a binding decision. Still, Prothonotary Lafrenière does not dismiss the utility of the mini-trial alternative which he suggested may appeal to the proverbial client who wants his or her day in court or where a party is interested in pursuing a test case without establishing a binding precedent.
All Federal Court alternative dispute resolution services are non-binding, confidential, free of charge, and all Federal Court judges and prothonotaries are formally trained in alternative dispute resolution.
Pursuant to Rule 382(2), unless the court orders otherwise, a dispute resolution conference shall be completed within 30 days. Prothonotary Lafrenière advised that the Federal Court is not only ableto accommodate the 30 day deadline but will meet this deadline even if it means assigning the dispute resolution conference to someone other than the Case Management Prothonotary or Judge. According to Prothonotary Lafrenière, it is more often the availability of counsel and the parties that results in any delays in the process.
Prothonotary Lafrenière offered the following tips to counsel on conducting a successful mediation:
- mediation should take place at a stage in the litigation where all parties feel comfortable that they have been given sufficient disclosure so as to enable them to make an informed decision;
- the client representative should not only be knowledgeable about the case but have the authority to settle it;
- counsel should be willing to give up their control and be open to the process and while they should continue to act as legal advisors, they should offer and be open to creative solutions; and
- counsel should obtain a stay of the proceedings under Rule 390 of the Federal Court Rules pending the result of the alternative dispute conference so that further costs and deadlines are held in abeyance. This is particularly important where counsel and the parties are not able to meet the 30 day time limit for the conduct of the alternative dispute conference imposed by Rule 386(2).
In a system that is seen as prohibitively costly, the Federal Court alternative dispute resolution services, conducted without cost by trained and experienced judicial officers, offers an economic and practical alternative to traditional litigation which counsel would do well to consider at each step of the litigation process.
This article was originally published in The Lawyers Weekly on June 1, 2001.
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