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Mediation: What’s It Gonna Cost You?

 Jun 12, 2018 11:00 AM
by Shalini Thomas

The plaintiff was successful in his lawsuit against a speedway for injuries sustained while moving out of the way of a stock race car that came off its track. At the end of the seven-day trial in Belleville, the parties could not agree on costs.

In coming to its decision, the Court considered various issues, including the refusal of the defendant (i.e. the defendant’s insurer) to participate in mediation despite numerous proposals from the plaintiff for same.

The Court stated that while mediation was not mandatory for the jurisdiction, a party’s unreasonable refusal to mediate can attract an adverse costs award. The factors considered in such a determination include the nature of the dispute, the merits of the case, whether other methods of settlement have been attempted, whether the costs of mediation would be disproportionately high, whether mediation would delay a trial and whether the mediation had a reasonable prospect of success.

In this case, the Court found that the insurer took a “tough and uncompromising stance” in refusing mediation as, contrary to the insurer’s position, the facts of the case indicated that neither side had a strong position on liability. As such, the Court found that the defendant’s refusal to mediate deprived the parties of an opportunity to settle the case without the necessity for trial and without incurring substantial costs.

In practical terms, the Court would have awarded the plaintiff approximately $190,000 (plus HST) in costs but for the defendant’s unreasonable refusal to mediate, resulting in an award of $210,000 (plus HST).

This decision serves as a cautionary tale for those jurisdictions where mediation is not mandatory. In these jurisdictions, insurers should think long and hard before refusing to participate in a requested mediation as it may end up costing them in the end.

See Canfield v. Brockville Ontario Speedway, 2018 ONSC 3288


Shalini defends insurance claims covering all aspects of general insurance liability including motor vehicle accidents, occupiers’ liability, slip and falls, as well as accident benefits litigation and arbitration and priority and loss transfer disputes.


  

 

 
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