Mediation gone awry ...

Here's a cautionary note for parties, lawyers and mediators.

Gunvaldesen-Klassen v. Bulpitt 2009 NSSC 66 involved an oil spill at a residence in Halifax, Nova Scotia. The neighbours' property was affected. The neighbours sued the homeowner, who then third partied two prior owners. The insurers of the various parties were involved. There were significant clean up costs (no doubt in excess of several hundred thousand dollars.) The individual insureds also had their own uninsured property damage claims.

Not surprisingly--and quite properly--the parties decided after discover to attempt to mediate a settlement. The negotiations that took place on the day of the mediation were "long and protracted." They ended with the parties thinking they had a settlement. Unfortunately the "settlement" was not reduced to writing. And once the lawyers and insurance representatives returned to their various offices it became apparent that each had a slightly different understanding of what the settlement comprised. In the event one of the parties applied to the Court for an order enforcing the settlement. But the evidence failed to establish that all parties were "of one mind." So the judge ruled that there was no settlement.

The moral of the story? Get it in writing.

It's true that some settlements at mediation--like a personal injury matter where the only issue is quantum of damage--do not really need to be reduced to writing. There is usually only one issue and one number and, usually, only two parties. Agreement is easy to find.

But other settlements--those involving a number of parties with different interests--clearly require something written down before everyone walks out the door. Practitioners (including mediators), take note.

On-the-fly procedures ...

The other day I performed a med/arb fashioned by the parties. They recognized that there wasn't much dispute on the facts (as opposed to their legal consequences). They suggested that I meet with each side and hear their evidence (in the absence of the other), and then attempt to mediate a settlement. If that didn't work, I was to decide whether I had enough information to make a binding decision without a "formal" hearing. If so, they were content to let me make a decision. If not, I could hear evidence and cross-examination and then make a decision.

What I found interesting is that the parties recognized what most decision-makers will tell you: the issues that divide parties are rarely factual; they are more often about the emotional reaction of the parties or the legal inferences or consequences to be drawn from those facts. Why then is it necessary to burden the parties with the requirements of formal proof? Why not let them tell their story in their own words (which is what they so often want to do) and then provide them with a decision. Much quicker, much cheaper and, I believe, ultimately much more satisfying to the parties.