Law Times

Page 10 April 9, 2018 • lAw Times www.lawtimesnews.com Parties reluctant to give final offer The tricky issue of mediation chill BY DALE SMITH For Law Times W hile mediation is expected to be confidential, if it fails and the mat- ter goes to court, a pre-trial judge will often demand to know what the last offer presented was. Al- ternative dispute resolution pro- fessionals say this can create a kind of "mediation chill," where parties are reluctant to give a fi- nal offer in the event that a judge forces them to reveal it. "In private mediation, the general understanding is that, when the parties come to the ta- ble, the process is confidential," says Bernard Morrow, principal of Morrow Mediation in Toron- to and a former litigator. "Everyone understands that after the mediation has conclud- ed, anything that was discussed at mediation cannot be dis- closed outside of the mediation context. You can't reference at court or during an examination for discovery what was said dur- ing the course of mediation." Morrow explains that the purpose behind the confidenti- ality commitment is to create an environment that allows those participating in mediation do so openly, without fear of repri- sal or that something they say can come back to haunt them at a later date, and that it gives them the comfort to be more open and frank than they would be on the record. "The difficulty I'm finding is that, on occasion, when we reach a critical point in the mediation process where we're getting to the tipping point in the negotia- tion, there may be a reluctance to go the extra mile if there's fear from one party or another, that in the event that a resolution is not achieved at mediation, the last offer made will anchor each party at pretrial," he says. Morrow refers to this phe- nomenon as "mediation chill." He says he understands that one of the first questions asked by most pretrial judges is what the last offers were exchanged at mediation, and that this is where the anchoring and the chill come into play. "If there's a fear at mediation that the process may not result in a resolution, a party may be concerned about putting their last offer out there because, if it's rejected, that's their starting point at pretrial," says Morrow. He says that whatever their reasons are for not wanting to have that anchor, it becomes problematic. "One gambit that I've seen is where the defendant doesn't want to make an offer," says Ian Stauffer, partner with Tierney Stauffer LLP in Ottawa, who both litigates as well as acts as a mediator and arbitrator. "They'll say to me as the me- diator: 'See if you can get the plaintiff to make another offer with the understanding that we might respond to it.'" Stauffer says that the biggest problem in terms of settlement with mediation is that parties are often not prepared because they can occur too early in the process. As an example, there may not be certain reports available, such as regarding future loss of income, or if the reports do come in, they come in too late for the other party to fully digest them. "There's just not enough evi- dence to give comfort to the de- fendant," says Stauffer, adding that some insurers don't want to get reports early on in the pro- cess as a means of trying to save money. Lauren Tomasich, litigation partner with Osler Hoskin & Harcourt LLP in Toronto, says there should be a reluctance to give a final offer unless the par- ties know that they're in the same financial territory, and she agrees that parties can be reluc- tant to give a position in media- tion that they would be bound to at pretrial. "I've also had the opposite sit- uation where the spread was re- ally small and the pretrial judge didn't really pressure people to settle, so it can depend on the judge, the circumstances and the dynamics," says Tomasich. She says that, more broadly, successful mediators never get into offers until they have enough information that the parties are really in the same ballpark, and even if the media- tor is trying to push parties in ei- ther direction, it isn't productive to tell each party at what point the other side is. "Final offers, from a psycho- logical and emotional perspec- tive, can be tricky," says Toma- sich. "People can really get fixated on the number, and the psychol- ogy and emotion can prevent them from changing even when the economics would dictate FOCUS In-class and online programs recognized by Law Societies Executive Education to Navigate the Canadian Legal Landscape Visit Lexpert.ca to find out more Lauren Tomasich says in mediation there should be a reluctance to give a final offer unless all parties know that they're in the same financial range. One gambit that I've seen is where the defendant doesn't want to make an offer. Ian Stauffer See Good, page 12 Every day, practice tools change the way firms produce work, market their services, interact with clients, and run day-to-day operations. Come explore, test, and learn about products and services at the Thomson Reuters Product Showcase. Find out how we're helping firms like yours profit from greater efficiency by using up-to-date technology. 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