Alternative Dispute Resolution – Consider Your Options Carefully!

Posted on May 5, 2016 by djb | Posted in General Business Articles

Dwayne Pyper, CPA, CA, CBV, Q.MedArticle written by: Dwayne Pyper, CPA, CA, CBV
Partner, Financial Services

I’m going to start by repeating what I’ve said in previous articles:  I’ve been involved in litigation support on matrimonial and shareholder disputes for years and I have come to one absolute conclusion…the vast majority of people must find a better way!

The Canadian Judicial Council (CJC) says the following about dispute resolution:

Litigation (starting a legal action and having your case heard in court) is only one way to resolve a dispute. You can resolve your dispute with or without the involvement of lawyers and without using the court system. These methods are called “alternative dispute resolution”.

Alternative dispute resolution (ADR) refers to the various ways disputes are resolved outside the court system. While you may think that having a trial is the most common way to resolve legal problems, a very small percentage of cases actually go to trial. ADR allows people to settle their disputes in an informal, less expensive, and usually faster way than going to court.

The parties in a legal dispute may enter into negotiations, which simply mean that they have discussions, with or without lawyers, about how to resolve the dispute. The negotiations often result in an agreement between the parties and the matter is concluded.

Mediation is another process to help people resolve legal disputes without going to court. A mediator is a professional, independent (neutral), third party who listens to the concerns of each party in the dispute and helps them reach a satisfactory conclusion. The mediator is not a judge and will not impose a decision on the parties in the dispute.

Arbitration is a more formal way to resolve a dispute. The parties hire an arbitrator (a professional, neutral third party), who listens to the information provided by both parties and makes a decision about the dispute. Unlike a mediator, the arbitrator makes a decision and the parties must accept it as final.

Did you know that Rule 24.1 of the Rules of Civil Procedure establishes mandatory mediation for case managed civil (non-family) actions and Rule 75.1 brings contested estates, trusts and substitute decision matters within mandatory mediation?  However, Rules 24.1 and 75.1 apply only in Toronto, Ottawa, and Windsor.

In Ontario, mediation is a voluntary process when it comes to family issues.  However, I don’t think enough is being done to ensure that families in crisis adequately consider this option.

Therefore, I’ll add one more method of ADR to those referred to above…Collaborative Practice.

I’ve been trained in Collaborative Practice for financial professionals and over the years have worked with many family lawyers and their clients on both formal and informal dispute resolution matters.  Formal refers to matters where the parties have signed a Collaborative Agreement, while informal refers to those with no formal agreement but where a collaborative intent is desired between the parties.

The International Academy of Collaborative Professionals (IACP) describes Collaborative Practice as follows:

  • Empowers you to resolve your legal disputes without judges, magistrates or court personnel making decisions for you.
  • Provides you with specially trained Collaborative lawyers, mental health and financial professionals to educate, support and guide you in reaching balanced, respectful and lasting agreements.
  • Offers you a safe and dignified environment to reduce the conflict and minimize its impact on you, your children, your family and your life.
  • Is a voluntary dispute resolution process in which parties settle without resorting to litigation.

In Collaborative Practice:

  1. The parties sign a collaborative participation agreement describing the nature and scope of the matter;
  2. The parties voluntarily disclose all information which is relevant and material to the matter that must be decided;
  3. The parties agree to use good faith efforts in their negotiations to reach a mutually acceptable settlement;
  4. Each party must be represented by a lawyer whose representation
    terminates upon the undertaking of any contested court proceeding;
  5. The parties may engage mental health and financial professionals
    whose engagement terminates upon the undertaking of any contested
    court proceeding; and
  6. The parties may jointly engage other experts as needed.

In general I am disappointed that the parties to family disputes don’t engage in a formal collaborative process more often.  I think the overriding reason they don’t is point 4.  The parties don’t want to run the risk of having to get new legal counsel if their collaborative process breaks down.  However, if the parties would take that leap of faith and become completely engaged in the collaborative process, I think they would be better served in the majority of cases.

Although typically utilized only for couples trying to deal with separation and divorce, Collaborative Practice is starting to gain momentum as an alternative in other areas of dispute resolution.

More recently I have obtained my Qualified Mediator’s designation from the Alternative Dispute Resolution Institute of Ontario (ADRIO) and been engaged as a financial mediator to assist parties involved in either matrimonial or shareholder disputes to resolve their differences.

Like any form of dispute resolution, it must be remembered that mediation is not appropriate for everyone.  This is particularly the case when there has been violence or abuse.  Where one party is afraid of, or intimidated by, the other party, mediation may not be a good idea.

The purpose of mediation is not to determine who wins and who loses, but to develop creative solutions to disputes in a way that is not possible at a trial.

I see the main benefits of mediation to be the following:

  1. Mediation leads to resolutions that are tailored to the needs of all parties.  Generally, the best solution to a problem is one that is worked out by the parties themselves.
  2. Many people find mediation more satisfying than a trial because they play an active role in resolving their dispute, rather than having a solution determined by a judge.
  3. The mediation process is informal and can be completely confidential.  Parties in mediation may speak more openly than in court.  Many people find mediation to be a more comfortable and constructive process than a trial.
  4. In situations where the parties have an ongoing relationship, mediation is particularly helpful because it promotes cooperative problem-solving and improved communication.

Mediation, Collaborative Practice and Litigation have some significant differences, but they can all be improved if you keep the following tips in mind:

  1. Have a plan:  Think about what is most important to you.
  2. Consult with a lawyer:  A little knowledge can be a dangerous thing.  Contacting an experienced lawyer is the very first thing you should do as they advise regarding your rights and responsibilities.
  3. Form a team:  Think about having a jointly retained financial expert involved for any type of Alternative Dispute Resolution (“ADR”) process.  Depending on the nature of the issues, other professionals may be beneficial as well.
  4. Be honest:  When you go to see your lawyer, tell them everything.  Don’t ambush them with a totally new aspect to the case later on.
  5. Know your best and your worst case scenarios:  Mediators often refer to this as the best alternative to a negotiated agreement’ or ‘BATNA’.  Determine your key issues in advance so you can be more flexible on the others.  Knowing this will make it easier to assess your risk and make decisions throughout the process.
  6. Strive for settlement:  Regardless of whether you use one of the available types of ADR or litigation, make every effort to settle the matter.

If you find yourself involved in a dispute…before you blindly head toward litigation please think about ADR and consider your options carefully!

References and thanks go out to:

  1. The Canadian Judicial Council
    www.cjc-ccm.gc.ca/english/resource_en.asp?selMenu=resource_alternatives_en.asp
  2. The International Academy of Collaborative Professionals:
    www.collaborativepractice.com/
  3. Ontario Ministry of the Attorney General – Ontario Mandatory Mediation Program:
    www.attorneygeneral.jus.gov.on.ca/english/courts/manmed/notice.asp
  4. Ontario Ministry of the Attorney General – Family Mediation Services:
    www.attorneygeneral.jus.gov.on.ca/english/family/mediation.asp
  5. Robert D. Bordett, CFP, CDFA, Collaborative Practice and Mediation Services:
    www.u2agree.com