Breaking the Impasse: A Brief Refresher on Choosing a Mediator

… (under Section 258.6 Insurance Act and O. Reg 461/96)

It seems commonplace in motor vehicle accident litigation at present that counsel struggle to agree on an appropriate mediator.  Nonetheless it is rare that counsel utilize the procedure that is in place to break the impasse when these disagreements occur.

The typical scenario is that plaintiff counsel request mediation pursuant to s. 258.6(1) of the Insurance Act and list eminently qualified, specialist mediators, whose qualifications are beyond reproach, and whose skills are required for the complex and serious case at hand.   

Defence counsel take a different view and insist that while they will meet their obligations to mediate under the Insurance Act they will only agree to a “roster” mediator, or at least a mediator that will conduct the mediation at roster rates.

Plaintiff counsel protests that the roster has no application to their action.  Indeed, throughout most of Ontario there is no roster.  The roster is a child of Rule 24.1 of the Rules of Civil Procedure, and that particular rule only has application in actions commenced in the City of Ottawa, The County of Essex and the City of Toronto.

Yet defence counsel insists that only roster rates will be paid, after all the Insurance Act and the Regulation does not speak to the rates other than to say the insurer shall pay “reasonable rates” and this is a rather small and simple case.  After all, what is deemed “reasonable rates” in Toronto, must surely be reasonable in the rest of the province.  Besides, they have their marching orders.

Plaintiff counsel is affronted.  To them it seems the insurer is only coming to the mediation to check a box, or worse to send a message.  They aren’t taking their client’s case seriously.  They need a strong mediator -someone to whom the insurer will listen.  A roster mediator will not do.

An impasse is reached.  Sound familiar?

There is a mechanism to break this impasse.  It has been available since 1996 but it seems that many counsel have forgotten it or do not avail themselves of it.

Under section 3 of Ontario Regulation 461/96 Court Proceedings for Automobile Accidents that Occur on or after November 1, 1996, if the parties cannot agree to a mediator each of them shall (within 10 days) name a person to participate in the appointment of a mediator and those two persons together appoint the mediator.

It is worthwhile to set out the entire section:

Mediation

3. (1) If a request for mediation is made under subsection 258.6 (1) of the Act, the plaintiff and the defendant’s insurer shall, within 10 days after the request is made, agree on and appoint a person to be the mediator.  O. Reg. 461/96, s. 3 (1).

(2) If the plaintiff and the defendant’s insurer are unable to agree on the appointment of a mediator, each of them shall, within 10 days after the request is made, name a person to participate in the mediator’s appointment, and the two persons named shall together appoint a person to be the mediator.  O. Reg. 461/96, s. 3 (2).

(3) The mediation shall begin on a date agreed to by the plaintiff and the defendant’s insurer or, if they are unable to agree on a date, within 14 days after the mediator is appointed.  O. Reg. 461/96, s. 3 (3).

(4) The mediator may adjourn the mediation, with or without conditions,

(a) if the plaintiff or the defendant’s insurer is represented in the mediation and the representative is not authorized to bind the person he or she represents; or

(b) the plaintiff or defendant is not present at the mediation.  O. Reg. 461/96, s. 3 (4).

(5) The mediator shall give the plaintiff and the defendant’s insurer a written report identifying the issues that were settled and the issues that remain in dispute.  O. Reg. 461/96, s. 3 (5).

(6) The defendant’s insurer shall pay all reasonable fees and expenses of the mediator.  O. Reg. 461/96, s. 3 (6).

In the 2018 decision of Thomson v. Portelance 2018 ONSC 1278, Justice Stephen Firestone held that once plaintiff counsel requests mediation under the Insurance Act the defendants have a positive obligation to appoint a mediator and schedule and conduct the mediation within the timeframes and procedures set forth in s. 258.6(1) of the Act and O. Reg 461/96.

In Keam v. Caddy 2010 ONCA 565, 103 O.R. (3d) 626 the Court of Appeal held that the legislature has clearly determined that in every case where one party is willing, mediation is the best way to try to promote settlement of claims and to avoid the expense of a possibly lengthy and certainly costly trial.  The legislature has provided no exceptions to this policy or to the obligation to mediate that it has imposed to implement the policy.  The Court of Appeal held that because there are no exceptions to the obligation, the insurer has no option whether or not to participate.  There can be no legitimate reason to refuse to participate because to elect not to participate constitutes a breach of the insurer’s statutory obligation. 

Of course, the consequence of the failure of the insurer to comply with their obligation to mediate is costs following trial.  There is no mechanism if the case settles prior to trial.  Importantly the Court of Appeal held as follows, at paragraph 26:

The cost consequences will follow whether the plaintiff or the defendant has been successful at trial, so that, for example, where a plaintiff's claim is dismissed, the trial judge may deprive the winning defendant -- represented by the insurer that refused to accept a request to mediate -- of all or part of its costs that would normally follow the event.

There is little to no guidance from the Courts however as to what the “reasonable fees and expenses” of the mediator means.  We do, however, have some clues.  The Court of Appeal in Keam, for example, has suggested that the “legislature’s approach recognizes that participation in a mediation could have a salutary effect on one or both sides, with input from an experienced and respected mediator”.  It is likely not sufficient therefore to suggest a mediator that does not have extensive experience in personal injury litigation.  A mediator whose commentary is likely to be given due regard and consideration by counsel and the parties is required.  In this regard someone who has a well-balanced approach and a background in both insurance defence and plaintiff personal injury matters is more likely to be effective.

Ultimately what is required by both the plaintiff and defendant insurer is that they abide by the process set out by the Insurance Act and the regulation.  If they are unable to agree on a mediator, the next step in that process is to each appoint a person to participate in the selection of the mediator.  One can expect that such persons appointed to select a mediator will consider what mediator is well suited to help resolve the case at hand.  They may consider the size and complexity of the case, the experience of the mediators in the subject matter, and the likelihood that a mediator will be successful in resolving the matter.

Not every personal injury matter will be of such complexity to require the pre-eminent mediator to resolve, but neither will choosing a mediator solely based on fees without regard to their experience and the likelihood of success be reasonable.  Even raising the process under s.3 and having a discussion as to whether it is necessary to resort to the process or whether a compromise can be reached.

Mediator Selection

There is no guidance as to who shall be appointed to select the mediator.  It can be anyone.  In my experience, Plaintiff counsel have chosen another plaintiff lawyer practicing in the area. Defence counsel are likely to pick a local external insurance defence lawyer.  In both cases going to someone outside of the firms or insurers involved is appropriate.  These individuals can invariably agree on an individual within a single phone call. 

The process is quick and easy and, in my experience, inexpensive.  I have not experienced anyone charging for appointing a mediator.  Usually, it is done as a favour for a colleague or a professional courtesy.

When faced with the impasse, remind counsel that the procedure for picking a mediator is set out in s. 3 of Regulation 461/96 and inquire as to whether a compromise can be reached.  If not, name your person to appoint the mediator and ask counsel to do the same within 10 days.