Mediators Can Express Opinions in Mediation-Arbitration, but Tread Carefully

Preventing a mediator-arbitrator from expressing a tentative view of the strength of a party’s position during mediation would have a “chilling effect” on the effectiveness of the mediation-arbitration process.

So says the Federal Court of Appeal in a recent labour relations case. It is one of a growing number of cases where courts have recognized the value of mediation-arbitration and expressed reluctance to tie the hands of the mediator-arbitrator too much.

In Fono v. Canada Mortgage and Housing Corporation, 2021 FCA 125, an employee sought judicial review of the decision of an adjudicator under the Canada Labour Code. The adjudicator declined to award reinstatement of the employee, even though the employer had admitted that the employee had been unjustly dismissed.

The question before the Federal Court was whether references in the judicial review application to communications made during the mediation phase of the adjudication process, and to settlement offers, violated settlement privilege and should be struck.

In the first instance, the Protonotary struck the impugned paragraphs. The employee appealed to the Federal Court, which found that the Prothonotary “did not err in concluding that settlement privilege precluded the evidence and allegations regarding what transpired during the mediation and concerning settlement offers…” (Fono v. Canada Mortgage and Housing Corporation, 2019 FC 1190).

The Federal Court of Appeal agreed with that conclusion. It said:

[7] The paragraphs struck from the Notice of Application and the affidavit on the basis of settlement privilege were properly struck as there was more than ample basis for the Prothonotary to have concluded that they referred to settlement offers or to comments made during a confidential, privileged mediation session. …

[8] The law protects these sorts of communications from disclosure in the event the case does not settle in order to foster open and frank settlement discussions. Were this not the case, employers or former employers might well be loath to suggest settlement compromises if their offers could be used against them if a settlement were not achieved.

[9] Further, it is common for labour adjudicators or arbitrators who conduct consensual mediation sessions prior to hearing a case to express tentative views during the mediation as to the potential strengths or weaknesses of parties’ positions with a view to fostering settlement, especially where, as was the case here, the parties are represented by experienced counsel. Such statements are not indicative of bias. …

[10] It would have a chilling effect on employment and labour mediations and undercut their efficacy if statements such as those the appellant alleges were made by the adjudicator were to be placed before the courts. The comments impugned by the appellant merely reflect the adjudicator’s tentative views as to the strength of the offer made by the respondent as compared to risks associated with pursuing the adjudication. This sort of comment is standard fare in a mediation.

Colm Brannigan says the decision is a welcome endorsement Med-Arb from the Federal Court, and a recognition that effective mediation is an important part of the process. Nevertheless, there are limits on what a mediator-arbitrator can say and do. It is important that they be experienced and well-trained to avoid these pitfalls.

Brannigan is a Chartered Mediator-Arbitrator and the co-developer and co-instructor, with Richard Moore, of the ADR Institute of Canada’s Med-Arb Workshop program.

He notes that Med-Arb has become firmly established in family and labour/employment disputes over the past 20 years. In both areas, parties need more timely resolution of their disputes than they can get in court. Privacy and confidentiality are also important in many family disputes, often because of concerns about the welfare of the children, or because of family businesses or other significant assets.

Med-Arb is becoming more widely used in business and commercial disputes, especially in situations where the parties may still be doing business. And Brannigan is seeing Med-Arb in other areas, such as estates, real estate and condos.

One thing holding back the growth of Med-Arb in new areas, Brannigan says, is that lawyers haven’t done it and don’t feel comfortable with it, so they don’t recommend it to their clients. But he is finding that lawyers that have used Med-Arb keep coming back to it.

One frequent concern is that, with a single mediator-arbitrator, the mediation process will not be as effective because the mediator cannot express a frank opinion about the merits of the case. On the other hand, lawyers worry that, if the mediator is too frank, it is evidence of bias that could get an arbitration award thrown out, wasting the time and cost of the Med-Arb.

The Fona decision and other similar cases that clarify what gives rise to a reasonable apprehension of bias, may help alleviate some of those fears.

Reasonable Apprehension of Bias

It is well established that to show a reasonable apprehension of bias, a party must show that an informed person, viewing the matter realistically and practically and having thought the matter through, would conclude that the arbitrator or adjudicator would not decide the matter fairly. (See R v. R.D.S., 1997 CanLII 324 (SCC), citing the dissenting reasons of de Grandpré J. in Committee for Justice and Liberty v. National Energy Board, 1976 CanLII 2 (SCC))

Negative comments made by a mediator-arbitrator during mediation don’t give a losing party an automatic “do-over”.

In the Fona decision, for example, the court noted that the employee, represented by experienced counsel, had proceeded with the adjudication following the mediation, despite the comments made by the adjudicator during the mediation session.

In Skinner v. Fedex Ground Ltd., 2014 FC 426, another labour law case, the Federal Court considered whether comments made by the adjudicator in a private mediation session that “based on what he had seen of the complaint so far, the fact that the Applicant had been disciplined on several occasions suggested that the Applicant’s case was not very strong” raised a reasonable apprehension of bias.

The court said it did not. The employee had asked the adjudicator for his opinion and he gave it.

[9] … I find that no apprehension of bias arises from the incidents recounted by the Applicant. The Adjudicator’s use of allegory and frank opinion regarding the Applicant’s chances of success were clearly directed at assisting the Applicant to understand that a realistic risk existed in taking the complaint to hearing. In my view, the Adjudicator’s attempt to assist the Applicant was very much in keeping with what might be reasonably expected of a competent mediator.

In the family law context, the judge in Reilly v. Zacharuk, 2017 ONSC 7216, noted that, in a mediation-arbitration process “[a] reasonable person would expect the mediator to have made comments outlining his or her views in the course of the discussions with the parties.” [para 70]

The reasonable apprehension of bias principle was applied to a family law mediation-arbitration in McClintock v. Karam 2015 ONSC 1024. In that decision, the judge stated:

[68] As stated by de Grandpre J., one of the considerations is the “special circumstances of the tribunal”. In this case, the tribunal is a mediator/arbitrator, and he has been constituted by agreement. It must be concluded that the parties, in agreeing to mediation/arbitration, would understand the nature of the process of mediation/arbitration. The informed person, in deciding whether there is a reasonable apprehension of bias, would also understand the nature of the process of mediation/arbitration.

[69] In order to effectively mediate, the person appointed must engage in a process that has a good deal of informality. Mediative techniques include persuading, arguing, cajoling, and, to some extent, predicting. Mediation is a process to secure agreement, if possible. All of those techniques, as well as others, will come into play in trying to secure agreement.

[70] If the mediator/arbitrator must move to the arbitration phase, it cannot be expected that he or she can entirely cleanse the mind of everything learned during the mediation phase, and of every tentative conclusion considered, or even reached, during the mediation phase. However, at a bare minimum the parties are entitled to expect that the mediator/arbitrator will be open to persuasion, and will not have reached firm views or conclusions.

In that case, which I have written about in a previous Slaw column, the court allowed evidence of comments made by the mediator-arbitrator during both the mediation and arbitration phases and concluded that a reasonable person would think that the arbitrator had already made up his mind about key evidence and issues in dispute.

That case is an excellent case study of what not to say and do as a mediator-arbitrator.

It also highlights the importance of training and experience, so the mediator-arbitrator understands how to set the parties’ expectations, and to design and manage the process to avoid some of these pitfalls.

Those interested in learning more about the ADRIC Med-Arb course can find details here. The next 3-day course is scheduled for October 2022.

And for more on Med-Arb generally, see my 2020 Slaw column “Med-Arb: More than Just a Mash Up” here.