In the estates regime, mediations occur regularly, particularly in Toronto, where mediations are a mandatory part of the litigation, in accordance with Rule 75.1.02(1)(a)(i) of the Rules of Civil Procedure.
A mediation is always an opportunity to attempt to settle a matter without resorting to costly and time consuming litigation. At mediation, the parties will each stay in separate rooms and the mediator (that is usually chosen by the parties to the litigation), will shuttle between the rooms seeking a more in-depth understanding of the parties’ positions as well as probing opportunities for settlement. Sometimes, before the mediation begins, the mediator will do an introduction to all the parties before they break off into separate rooms, explaining how the day will go.
An important aspect of mediation is the fact that a mediator has no decision-making power. He or she cannot force the parties to settle but can provide his or her opinion on the issues. As such, settlement at mediation can only be reached upon the agreement of the parties themselves.
Another means of dispute resolution (other than litigation) that is not often resorted to in estate litigation, is arbitration. Before agreeing to attend an arbitration, however, it is important to consider whether this form of dispute resolution would be helpful in the particular circumstances of the matter.
Arbitration, unlike mediation, is an adversarial dispute resolution process (similar to litigation) determined and controlled by a neutral third party. The arbitrator can make a final decision, called an “award”, contrary to a mediator, who cannot. The most significant aspect of arbitration, however, is that the courts generally do not interfere in a dispute that is subject to an arbitration agreement. As such, there is a risk that should a decision be made by an arbitrator, the court would then refuse to hear the matter further, leaving arbitration as the ultimate medium of resolving the particular matter.
Why is that so important?
In a situation where the parties have already engaged in settlement negotiations and there appears to be a gap between their respective positions, an arbitration may be worthwhile to pursue, particularly should litigation be untenable to the parties given the cost involved and/or if the matter in dispute does not involve a lot of money. In such a situation, a final arbitral award may bring finality and allow the parties to move on, particularly if the gap between the parties’ positions is not significant.
If, however, the parties had not yet engaged in negotiations and no offers to settle were made, pursuing arbitration may be a serious gamble. That is so because the issues to be arbitrated are set out by the parties and though the arbitration process is similar to traditional litigation, the arbitrator will not have an opportunity to hear all the relevant evidence. As a result, agreeing to arbitrate in a situation like that may cause prejudice to a client who may then not be able to appeal the “award” made by an arbitrator, outside of the regime put in place by the Arbitration Act, 1991, SO 1991, c 17.
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As lawyers, whether we are dealing with opposing parties, clients, or colleagues, we are often faced with having to say no at some point. Viewed as a negative response, the effect of saying no often leads to damaged or strained relationships.
Below is a brief overview of the rules that Mr. Latz espouses:
Rule #1 – Information is Key – at the outset it is important to determine your goals and then develop an information bargaining strategy. Ways to get and share information should be considered. Obtaining information is key before providing any response.
Rule #2 – Understand the Meaning of No – before saying no, Mr. Latz suggests that you consider the best alternative to a negotiated agreement. Referred to as ‘BATNA’, this is widely used in negotiation theory to think about what your plan B is. Mr. Latz further suggests that, at this time, steps should be taken to strengthen this plan.
Rule #3 – Explain your No with Fair Objective Criteria – if you are going to say no, explain why. This should be based on fair and objective criteria such as market-value, precedent, professional standards, or tradition.
Rule #4 – Combine your No with a ‘Yesable’ Offer – Mr. Latz suggest that you design an offer-concession strategy. Considerations should be had to the timing of making such an offer.
Rule #5 – Control the Setting – if you are going to say no, consider the importance of the setting on the relationship. For instance, there may be value in having a face to face discussion as opposed to over the telephone.
Of course, this is just an overview of the issues Mr. Latz discussed. I encourage you to visit Mr. Latz’s website at www.negotiationinstitute.com for more information.
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Estate planning can be tricky enough without some of the other issues often associated with aging – the need for care, moving homes, declining mental capacity, or the death of a spouse. Elder mediation – a specialized form of mediation that goes beyond mediation training and experience to include issues specifically related to the elderly – now has a presence in Canada after gaining a strong foothold in the United States.
The elder mediation specialty recognizes that conflicts often come to the surface as parents age and key decisions – such as those relating to ongoing health care, estate planning, and the upkeep and use of assets like cottages and vacation homes – need to be made.
How would you and your family cope when an elder member of your family enters a transition stage? Two U.S. elder mediators have identified four categories of families in how they handle a major elder transition:
- Graceful transitions – the family successfully manages old age and its transitions through targeted planning and effective communication, along with good legal and financial advice. Even as elders experience their inevitable physical decline, family members manage this process with dignity and respect.
- Successful struggles – the family has one or two major issues to work through but manages to come to a positive outcome with the support of friends, family and advisors.
- Quietly bruised – the family may be unable to move forward with important decisions and are living with situations that leave an aging parent in peril and increase emotional, financial and safety risks. There is often a sense of discomfort with choices made, and there may be disagreements festering under the surface about care giving, housing or inheritance decisions.
- Litigious – things have gone from bad to worse, and there is either the threat of litigation or actual litigation required to get decisions made. Wounds abound, and relationships are often destroyed forever between some family members.
You can find the full article here: http://www.mediationinstitute.net/training/wp-content/uploads/2011/12/MediationinEstatePlanningandElderCare.pdf
Elder mediation isn’t required in most family situations, but if either of the last two categories of family seem familiar, it’s a process well worth considering. Family Mediation Canada has more information on elder mediation in this country: http://www.fmc.ca/elder-mediation
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Last week, the family of Martin Luther King Jr. settled a dispute surrounding two cherished family artifacts: the late reverend’s personal travelling bible and 1964 Nobel Peace Prize medal. King’s three surviving children—Martin, Dexter, and Bernice—disagreed about whether or not to sell these treasured items. The two brothers, who wanted to sell to a private buyer, outvoted their sister, who had possession of the items and wished to keep them in the family. Former President Jimmy Carter acted as the mediator in the case.
Sadly, this kind of case is far too common. We have written about such “family wars” several times. Of course, no two family disputes will be exactly the same; each unhappy family is unhappy in its own way. Individual personalities and family dynamics as well as the significance of the issues in dispute make each family dispute different. The facts in this case are unusual because of the particular items in dispute. This family bible is significant not only to the family, but also to American history. The bible at issue was used by President Barack Obama during his inauguration in 2013. As well, not every family will have a former U.S. President act as mediator.
On the other hand, the themes represented in this case often arise in family disputes, no matter how celebrated or obscure the family. Here, the brothers desired to sell because the Estate needed the money. Bernice, however, could not conceive of selling her father’s cherished possessions. Conflict between sentimentality and more material considerations often fuel estate disputes.
As we have discussed before, it important for a lawyer to recognize the role of passion and sentimentality in estates disputes. Feelings should not be the sole driving force in litigation. As well, communication is the most effective tool to avoid estate litigation. Testators should speak to their families, particularly their children, about their wishes and the terms of their will, to avoid surprises and hurt feelings.
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This week on Hull on Estates, Natalia Angelini and Umair Abdul Qadir discuss the new Rule 75.2 of the Rules of Civil Procedure. Rule 75.2 provides the Court with the authority to order a mediation in certain estate litigation matters even when mandatory mediation under Rule 75.1 does not apply, and came into force on January 1, 2016.
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Estate litigation often involves not only financial, but emotional issues. Among the most common disagreements are those between family members, whether amongst siblings, or between siblings and a surviving spouse. In some cases, the parties cannot get along and they may require that the Court determine the matter in dispute. However, there are also situations where the disagreement can be worked out between the two sides, such as through an Alternative Dispute Resolution (“ADR”) process like mediation, without the extra time and expense that comes with a Court proceeding.
Another form of ADR used primarily in the family law context is Collaborative Family Law (“CFL”). CFL is structured in a series of four-way meetings between the parties and their lawyers. There is no mediator, arbitrator, or judge present, so CFL requires a high level of trust between the lawyers and clients. Candidates for this collaborative approach to dispute resolution are often parties who still get along reasonably well, and who are willing to cooperate with one another.
Based on the frequently emotional and familial aspects of estate litigation, it seems that CFL, or a form of CFL, could be applicable in the estates context. Back in 2010, as noted by this prior blog post, there seemed to be some interest in applying the CFL model to estate Law. This article in Canadian Lawyer from later that same year discussed why collaborative estate law didn’t seem to be catching on.
One of the key features of CFL that seems to make it unattractive in estate law is that, if after the series of four-way meetings, the parties cannot agree between themselves, they must start from scratch. The lawyers who participated in CFL cannot continue to represent the same client in court proceedings. All information produced in the CFL process has to be reproduced, including financial statements, expert reports, appraisals, etc. Although the best case scenario in CFL involves saving money as well as preserving relationships, the worst case scenario could possibly involve additional expenses and harm to relationships in any event.
However, perhaps the clause that restricts a lawyer from staying on the file after unsuccessful meetings could be removed, or at least modified. One possibility considered is to disqualify only the individual lawyer who worked on the file, and not the entire firm. This may make it more accessible to parties who would otherwise be good candidates for resolving their problem in a collaborative way, as opposed to an adversarial one.
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In my recent post, To Litigate or To Mediate, I discussed the benefits of participating in mediation at the early stages of litigation.
Today, I’d like to discuss some of the mistakes commonly made by lawyers when preparing for and attending mediation. From my experience, each of the following mistakes can dramatically impact the likelihood of achieving a successfully mediated resolution.
(1) Choosing the wrong mediator – a mediator’s knowledge, experience, and approach to the dispute can have a significant impact on the outcome of the mediation. As such, it is important to choose a mediator that has considerable knowledge and experience relevant to your dispute
(2) Failing to prepare the mediator – a mediator who has a thorough understanding of the facts, issues and positions of the parties will be better placed to assist the parties in reaching a settlement. To assist the mediator in this regard, each party should provide the mediator with a mediation brief outlining the facts, issues and the law they feel are relevant prior to the mediation.
(3) Arriving unprepared for the mediation – to make the most of the mediation each side should arrive prepared. Counsel for each side should have a command of the facts, the law and a considered plan for approaching the session. Also, it is important not to forget a calculator and any relevant documents, including court orders.
(4) Failing to prepare the client – if your client understands the purpose of the mediation, the strengths and weaknesses of his or her case and how the mediation is expected to unfold, he or she will be better placed to achieve more at the session.
(5) A lack of commitment to resolve the dispute – Rule 75.1 of the Rules of Civil Procedure requires that parties to any estate dispute commenced in Toronto, Ottawa and Windsor, submit to mandatory mediation prior to attending court for a trial. Unfortunately, this can result in parties attending mediation, not because they wish to settle the dispute, but rather because they have been ordered by the court to attend. The mediation should be approached, by both sides, with a commitment to resolve the dispute.
(6) Failing to listen to the other side – listen to the other side to identify their interests, perceptions and motivations. Doing so is extremely useful for generating options to settle the dispute.
(7) Failing to set aside sufficient time for the mediation – while there will often be significant downtime during the session, it is important to set aside sufficient time for the parities to thoughtfully consider a range of options and positions. A settlement is significantly less likely to occur if the parties run out of time or feel rushed into making a decision.
(8) Failing to ensure all the necessary parties attend – to get the most out of any mediated session all relevant parties should be present, however, it is essential for the person(s) with settlement authority to attend the mediation. If the individuals attending do not have authority to settle the dispute, no agreement will be finalized at the session.
(9) Failing to ensure the settlement is properly documented – any agreement reached by the parties at the mediation will be non-binding unless and until reduced to a written agreement that is signed by all the parties. A draft settlement agreement can be prepared by counsel prior to attending mediation, such that agreed terms can be finalized efficiently prior to the close of the mediation session.
While mediation can be a challenging process to navigate, it has the potential to result in a viable and effective settlement. By avoiding these common pitfalls you can significantly increase your chances of reaching a successfully mediated settlement.
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Rule 75.1 of the Rules of Civil Procedure provides for the mandatory mediation of estates, trusts, and substitute decisions matters which are commenced in Toronto, Ottawa, or the County of Essex.
Rule 75.1 provides that, except in a contested Passing of Accounts, the Applicant shall make a motion, in the same way as under R. 75.06 (Application or Motion for Directions), seeking directions for the conduct of the mediation. Rule 75.1.05(2) provides that the Notice of Motion for mediation directions is to be served within 30 days after the last day for serving a Notice of Appearance.
In terms of who actually conducts the mandatory mediation session, R. 75.1.06 provides that the mediator can be a person chosen from the list for the county by agreement of the designated parties, a person assigned from the list by the mediation co-ordinator for the county (at the request of a designated party), or a person who is not named on the list, if the designated parties consent.
Most clients are vaguely familiar with the court process and think they know what to expect – they know it involves a judge, their lawyer, a trial, and a courtroom. Not many clients however know what to expect at mediation. As a result, it is important for counsel to take time to describe the process, answer any questions, and prepare their client for what they can expect to happen at mediation. By doing so, counsel can help reduce their client’s anxiety about the attendance.
Estate mediations can be a very emotionally draining experience. Apart from any legal foundation to the dispute, many intangible factors tend to also be present in estate matters. Jealously, anger, and greed are difficult emotions to overcome and can be sever stumbling blocks in settlement. Sometimes, steering clients away from the emotional aspects and towards the financial implications of continued litigation assists them in moving past those types of difficulties.
Clients need to be assured that the mediation process is completely confidential and that anything that is said or admitted cannot be used against them at a later date. The fact that there will be no public record of the proceeding may provide some clients with the comfort to say things that might otherwise not be said. In addition, clients can be advised that any information they provide to the mediator to try to help him or her understand their position better can remain confidential, and that the mediator will not disclose any information unless expressly authorized by the client. Having the opportunity to participate in open and frank discussions may be the key to resolving outstanding issues, issues which might not otherwise be addressed in the litigation process.
In jurisdictions not governed by mandatory estate mediation, r. 75.06(2)(f.1) allows a judge hearing an Application or Motion for directions to direct that a mediation session be conducted nonetheless. Counsel may want to keep this provision in mind when otherwise seeking directions in respect of a matter which may, in whole or in part, benefit from a mediation session.
Ian Hull – Click here for more information on Ian Hull.
As anyone who has ever been a party to litigation (and every litigation lawyer) knows, the costs of any court proceeding is a looming threat that surrounds the entire process. The sanction of costs is meant to discourage frivolous and vexatious litigation that has no chance of success. It is also meant to temper the zeal of the litigating parties (even where there are very real issues to be tried) by making them think hard about the necessary steps and how they conduct themselves in the litigation.
The court has broad discretion to award costs under section 131 of the Courts of Justice Act. The factors the court considers in exercising that discretion are found in Rule 57.01 of the Rules of Civil Procedure and include the result in the proceeding, any offer to settle made in writing, the principle of indemnity, the amount of costs that an unsuccessful party could reasonably expect to pay, the amount claimed and the amount recovered in the proceeding, the apportionment of liability, the complexity of the proceeding and the importance of the issues.
Notably, the court will also consider, the conduct of any party that tended to shorten or to unnecessarily lengthen the proceeding, whether any step was improper, vexatious, unnecessary, taken through negligence, mistake or excessive caution, and a party’s denial of or refusal to admit anything that should have been admitted.
Costs sanctions are just one of the many mechanisms built into the litigation process designed to encourage settlement. For example, matters commenced in the Toronto Estates Court are subject to mandatory mediation, which means that the parties must attend with counsel to enter into in good faith settlement negotiations assisted by a professional and neutral third party.
If mediation fails, a pre-trial provides the opportunity for court-assisted settlement whereby a judge will assist and encourage the parties to settle.
Certainly, it is always better to be a part of the resolution, which provides a measure of control over costs and other factors. A much more attractive option than the risk involved with having no control over the outcome.
Food for thought for all the litigants out there.
Sharon Davis – Click here for more information on Sharon Davis.
Listen to Will Challenge Litigation – Part 3
This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the Will Challenge Process, step by step.
They discuss what happens during the Discovery process and explore what Mediation is and how it works. Will challenge proceedings can benefit greatly from facilitation during the litigation process.
To see the video version of this podcast, you can also download it from iTunes or watch it on YouTube on the Hull and Hull channel: http://www.youtube.com/HullandHullLLP
If you have any comments, send us an email at email@example.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.