Not every legal dispute needs to be resolved in a courtroom, and not every solution is best reached by applying the rigidity of statutory remedies. Alternate Dispute Resolution (“ADR”) has been on the rise as one of the primary ways to bring a dispute to resolution. Rather than spending significant time and money to litigate a case, the recent trend sees the increased use of ADR processes, such as mediation or arbitration, in the negotiation of a settlement outside of the courtroom. For estate litigation, and other disputes involving family dynamics, ADR is a valuable asset that can help preserve relationships and money involved. The rigidity of courtroom procedure is often not so well-equipped to facilitate mutually-agreeable outcomes for such emotionally charged disagreements.
Aside from the potential benefits related to saving costs and time, there are many factors that should be noted as benefits when considering the option of ADR. Due to the fact that ADR is collaborative, parties generally feel as if they have been directly involved in negotiating the settlement or resolution. Allowing the parties to the dispute to be involved in the process provides the parties with more control over the process and its outcome
Secondly, ADR can assist parties in negotiating in ways that are not available through traditional litigation. For example, a negotiated settlement may be more flexible and address legal and non-legal issues alike, rather than being confined to those that can be dealt with through the process of litigation and restricted by the court forms and processes that are required by the court process. The ADR process may also allow additional flexibility in creating a solution or settlement. For instance, a settlement may include elements of tax planning that might not be considered in a trial decision.
Thirdly, ADR is able to provide privacy and confidentiality to the parties involved. Generally, when a matter is litigated, it becomes a matter of public record. As such, personal information may become available for the public to refer to in the future, and other lawyers may rely upon it if your case establishes an important principle. Through the use of ADR, parties can be guaranteed both privacy and confidentiality. Agreements are usually signed at the outset of the ADR process, stipulating that the issues and settlement terms discussed will not leave the ADR location, and that no information will be released in regard to the conclusion reached. Confidentiality clauses can typically be incorporated as a term of negotiated settlement.
While ADR is a helpful resolution method, there are certainly some limitations. For example, within the family law context, it may not be advisable in cases where there may have been spousal abuse, or there is a power imbalance between the parties. Furthermore, in the estate law or other civil law disputes, there may be extreme hostility due to the pre-existing relationships, and a lengthy court battle may be preferred to working together to come to a resolution. Due to the collaborative nature of ADR, the process may not be beneficial for everyone. To have success in ADR, the parties need to be willing and able to participate and work toward a solution that would benefit all the parties involved.
When deciding whether or not to attempt ADR, the lawyers involved need to consider the different personalities and players involved in the dispute. It is important to have a proper understanding of the parties and their history in order to ensure that a resolution can be reached, and that there is no risk of physical or emotional harm that could arise out of having the parties together in a room. For example, if you know that a client is stubborn, has a short temper, and feels negatively toward the other party, ADR may not be suitable.
Furthermore, if, as a lawyer, your client decides to attempt ADR, it is important to make it clear from the outset that ADR may not result in as high a monetary reward as litigation. Damages awarded through traditional litigation may prove to be greater, although the legal fees related to pursuing litigation may be disproportionate to the difference between the outcome of a negotiated settlement versus that decided at trial. It is important to manage your clients’ expectations and ensure that they understand that, while ADR has its potential benefits, if they are solely looking for a large monetary reward (although not guaranteed) and are unwilling to compromise, litigation may be a better path for them.
When dealing with someone who is willing to negotiate with the other party and craft a flexible and mutually agreeable settlement, mediation may be desirable. When assisting parties who may prove to be less compromising and may be require a decision to be imposed upon them by a third party, arbitration could be a better option. An ADR mechanism that is increasingly common is known as "med-arb," which is a combination of both mediation and arbitration, where the parties begin in mediation and, if no further negotiation appears to be worthwhile, the process can transition to arbitration.
In order to encourage the use of ADR, some jurisdictions have introduced the concept of mandatory mediation. Pursuant to Rule 24.1 of the Ontario Rules of Civil Procedure, mandatory mediation was introduced in Toronto, Ottawa and Essex County for certain types of actions, in order to reduce costs and delay in litigation, and to facilitate the early and fair resolution of disputes. Furthermore, Rule 75.1 of the Ontario Rules of Civil Procedure requires mandatory mediation for estates, trusts and substitute decision-making for proceedings in the same regions. The more recent introduction of Rule 75.2 of the Rules of Civil Procedure provides Ontario judges in jurisdictions where mediation is not already mandated to nevertheless order parties to estates or estate-related matters to attend mediation.
In conclusion, ADR provides a meaningful (and sometimes mandatory) opportunity for parties that wish to come to a cost-effective and timely resolution of all outstanding issues in a way that may not be possible through traditional litigation. The introduction of mandatory mediation in certain jurisdictions makes it clear that the legal profession and law-makers alike are seeking the benefits of ADR.
Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.
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