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Rules and Procedures
[ Arbitration Rules ] [ ADR Clauses ] [ Model Mediation Procedures ]
 
MEDIATION PROCEDURE

GUIDANCE NOTES

The paragraph numbers and headings in these notes refer to the paragraphs and headings in the Model Procedure.

Text in the Model Procedure in square brackets may be inappropriate and therefore inapplicable in some cases.

Introduction

The essence of mediation (and many other ADR procedures) is that:

  • it involves a neutral third party to facilitate negotiations;
  • it is a voluntary process;
  • a party may withdraw at any time;
  • it is quick, inexpensive and confidential;
  • it enables the parties to reach results which may not be possible in an adjudicative process such as litigation or arbitration and may be to the benefit of both parties, particularly if there is a continuing business relationship;
  • it involves representatives of the parties who have sufficient authority to settle. In some cases, there may be an advantage in the representatives being people who have not been directly involved in the events leading up to the dispute and in the subsequent dispute.

The procedure for the mediation is flexible and this model procedure can be adapted to suit the parties.

A mediation can be used:

  • in both domestic and international disputes;
  • whether or not litigation or arbitration has been commenced; and
  • in two party and multi-party disputes.

Rules or rigid procedures in the context of a consensual and adaptable process which is the essence of ADR are generally inappropriate. The Model Procedure and the Model Agreement and these guidance notes should be sufficient to enable parties to conduct a mediation.

In some cases the agreement to conduct a mediation will be as a result of an "ADR clause" (such as one of the Foundation’s Model ADR clauses) to that effect in an underlying commercial agreement between the Parties. Where that is the case the Model Procedure and Mediation Agreement may need to be adapted accordingly.

The Model Agreement, which has been kept as short and simple as possible, incorporates the Model Procedure (see paragraph 3). The Mediation Agreement can include amendments to the Model Procedure; the amendments can be set out in the body of the Mediation Agreement or the Mediation Agreement can state that amendments made in manuscript (or otherwise) to the Model Procedure and initialled by the Parties are to be incorporated into the Mediation Agreement.

Mediation Procedure - paragraphs 1 & 2

The Advisors can and usually do attend the Mediation. Although a lead role in the Mediation is often taken by the Representatives, the Advisors can play an important role in the exchange of information, in advising their clients on the legal implications of principles of settlement and in drawing up a settlement agreement. However, the commercial interests of the Parties will normally take the negotiations beyond strict legal issues, hence the importance of the role of the Representatives.

It is essential that the Representatives are sufficiently senior and have the authority of their respective Parties to settle the Dispute.

Mediation Agreement - paragraph 3

If the Foundation is asked to do so by a party wishing to initiate a mediation, it will approach the other party(ies) to a dispute to seek to persuade it/them to participate.

Ideally the Representatives, the Advisors (and the Mediator if he/she has been identified) and the Foundation (or whatever other ADR body is involved, if any) should meet to discuss and finalize the terms of the Mediation Agreement.

Alternatively, the party who has taken the initiative in proposing the Mediation may wish to send a draft agreement based on the Foundation’s Model Mediation Agreement to the other party(ies).

Code of Conduct - paragraph 4

The Foundation has adopted as its Code of Conduct for Mediators the ‘Model Standards of Conduct for Mediators’ approved by the American Arbitration Association, the Litigation Section and Dispute Resolution Section of the American Bar Association, and the Society of Professionals in Dispute Resolution, as amended from time to time.

The Code of Conduct covers such points as the Mediator’s duty of confidentiality, impartiality and avoiding conflicts of interest.

The Mediator - paragraphs 5 & 6

The success of the Mediation will to a large extent, depend on the skill of the Mediator. The Foundation believes it is very important for the Mediator to have had specific training and experience as a Mediator. The Foundation has its own panel of experienced mediators and can assist the Parties in identifying a suitable mediator.

Questions sometimes arise about whether it is more important to have a Mediator with good mediation skills or a Mediator with good background in or knowledge of the industry where the problem or dispute has arisen. Both would of course be optimal. However, where it is not possible, current research is suggesting that the Parties are best served by a mediator with good mediation skills.

In some cases it may be useful to have more than one Mediator, or to have an independent expert who can advise the Mediator on technical issues ("the Mediator’s Advisor"). All should sign the Mediation Agreement which should be amended as appropriate.

It is possible a student mediator ("the Student Mediator") may attend the mediations. The Student Mediator signs the Mediation Agreement and falls within the definition "the Mediator" in the Model Procedure and the Mediation Agreement.

It is advisable, but not essential, to involve the Mediator in any preliminary meeting between the Parties.

The Foundation - paragraphs 7 & 8

The Model Procedure envisages the involvement of the Foundation because this may benefit the Parties. Its involvement, however, is not essential and this Model Procedure can be amended if the Foundation is not to be involved.

Exchange of Information - paragraphs 10 & 11

Documentation which a Party wants the Mediator to keep confidential from the other Party(ies) (e.g. a counsel’s opinion, an expert report not yet exchanged) must be clearly marked as such. It can be disclosed by the Party before or during the Mediation. It will not be disclosed by the Mediator without the express consent of the Party.

One of the advantages of ADR is that it can avoid the excessive discovery process (including witness statements) which often make litigation and arbitration more complex. The Documents should be kept to the minimum necessary to give the Mediator a good grasp of the issues. The Summaries should be similarly brief.

Disclosure and Confidentiality - paragraphs 12 to 18

The Model Procedure provides, subject to exceptions provided, for full disclosure by the Parties to each other and the Mediator during the Mediation, of all information and documents relevant to the issues being mediated. Where full disclosure is not made, the Party not making full disclosure is required to disclose the issue or issues to which the information and/or documentation not being disclosed relates and is obliged to make disclosure, upon terms of confidentiality of that information and/or documentation to the Mediator. The Mediator is not to disclose to any other Party any information given to him/her by a Party in confidence without the express consent of that Party.

In any related litigation in Canada such documents (see paragraph 12) should in any event be inadmissible and privileged as "without prejudice" documents since they will have been produced in relation to negotiations to settle the dispute. Documents which pre-existed the Mediation and would in any event have been discoverable will, however, not become privileged by reason of having been referred to in the Mediation and will therefore still be discoverable. The position may differ in other jurisdictions and should be checked.

Mediation discussions are without prejudice. Although the Parties agree not to call the Mediator or the Foundation as a witness in any legal or adjudicative proceedings and will not subpoena notes or records, they recognize that the possibility exists that the Courts may require the Mediator or the Foundation to testify.

The Model Procedure permits limited disclosure of information for research or educational purposes, and further permits the Mediator to disclose information and data necessary to clarify terms of the agreement reached in mediation.

The Mediation - paragraphs 19 & 20

The intention of paragraph 20 is that the Mediator will cease to play an entirely facilitative role only if the negotiations in the Mediation are deadlocked. Giving a settlement recommendation may be perceived by a Party as undermining the Mediator’s neutrality thereby jeopardizing the process, and for this reason the Mediator may not agree to this course of action. Any recommendation will be without prejudice and will not be binding.

Settlement Agreement - paragraph 21

If no agreement is reached, it is nonetheless open to the Parties to adjourn the Mediation to another time and place. Experience shows that even where no agreement is reached during mediation itself, the Parties will often reach a settlement shortly after, as a result of the progress made during that mediation.

No Further Steps - paragraph 23

The only permitted further steps in any legal proceedings are those required to preserve rights.

Fees, Expenses and Costs - paragraphs 24, 25 & 26

The usual arrangement is for the Parties to share equally the fees and expenses of the Foundation and the Mediator relating to the procedure, but other arrangements are possible. A party to a dispute which is reluctant to participate in a mediation may be persuaded to participate if the other party(ies) agree to bear that party’s share of the mediation fees.

Waiver of Liability - paragraph 27

The Model Procedure provides for limited liability of the Mediator and the Foundation and specifies no joint and several liability.

International Disputes - Language and Governing Law/Jurisdiction

The Model Agreement is designed for domestic disputes but can be easily adapted for international disputes by the addition of the following paragraphs:

"Language – The language of the Mediation will be ... Any Party producing documents or participating in the Mediation in any other language will pay for, or if agreed to, provide the necessary translations and interpretation facilities."

"Governing Law and Jurisdiction – The Mediation Agreement shall be governed by, construed and take effect in accordance with [Canadian] law.

The courts of [Canada] shall have exclusive jurisdiction to settle any claim, dispute or matter of difference which may arise out of or in connection with the Mediation."

Where the law is not Canadian or the jurisdiction not Canada the Mediation Agreement may need to be amended to ensure the structure, rights and obligations necessary for a mediation are applicable.


This Model Mediation Procedure have been produced by The Canadian Foundation for Dispute Resolution. Any feedback or concerns on the content of this document please contact CFDR at the addresses below.

The Canadian Foundation for Dispute Resolution
12075, 237 Fourth Avenue S.W., Calgary, Alberta T2P 0H6
Tel. (403) 237-2872 Fax. (403) 237-2753

112 Adelaide Street East, Toronto, Ontario M5C 1K9
Tel. (416) 307-0019 Fax. (416) 307-0011

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