Estate litigation is a long, slow and expensive endeavour. Will challenges, support claims or objections to the appointment of a trustee often drag on for years, and can swallow much of the value of the estate at issue. One way to avoid the cost and delay is through a mediated settlement agreement. The purpose of a mediation is to facilitate open negotiations without prejudice between litigants and encourage compromise, in the hopes that the litigants will be able to come to an agreement that is “good enough” for everyone and bring the litigation to an end. In some jurisdictions, including Toronto, mediations are mandatory for estate litigation: the matter may not proceed to trial, unless a mediation has been held and failed to achieve a settlement agreement.
Choice of mediator
A mediation is held by a neutral, third-party mediator, that is jointly selected by the parties. In estate litigation, the mediator is often a senior estates lawyer with many years of experience in this area of law. Many mediators have also completed courses or diploma programs in alternative dispute resolution. It is also possible to obtain a judicial mediation, a mediation held during a scheduled court appearance presided over by a judge of the Superior Court.
It is best practice to choose a mediator with sufficient experience in dealing with the particular issues at hand, and one that will be a good fit with the personalities involved. Given the nature of estate litigation, litigants are often highly emotionally invested in the dispute, and using a mediator that is able to connect with the litigants on a personal level may be of assistance in achieving an agreement. The mediator must run a conflicts check to ensure that he or she has never had involvement with any of the litigants involved, which could be a possibility especially if the mediator maintains a large estates practice of his or her own.
Preparing for a mediation
In preparation for a mediation, the litigants exchange mediation briefs, which outline each litigant’s case and provide the factual and legal basis for it. This gives the mediator and the litigants a chance to consider the relative strength of each respective case against that of the opposing party, and assess the risks of continuing the litigation process and the advantages of settling at the mediation, without any further litigation. The mediator will discuss the weaknesses of each party’s case with that party and point out instances where an opposing party may prevail, providing an incentive to settle the matter and avoid the risk. The mediator will also suggest possible agreements, push the parties to bridge the gap between their positions, and will often assist with crafting creative, outside-the-box solutions, beyond simple division of assets or payments of sums of money. The mediation briefs and any notes prepared by the mediator remain confidential, and may not be disclosed in any subsequent litigation should the mediation fail to settle the matter.
It is important to enter a mediation with a willingness to compromise and a focus on one’s core interests, rather than fixating on a narrow position or particular sum of money. Lawyers should encourage their clients to consider the future legal costs that will accumulate if the litigation continues, and to consider the value of the peace of mind that they will achieve if the matter does settle, when deciding whether to make or accept an offer.
What to expect the day of mediation
Today, many mediations are held by video-conference, however in-person mediations are usually available upon request. If a client plans to attend the mediation virtually from his or her home, it is important to ensure a good-quality and reliable internet connection and power source. As mediations may take an entire day, clients should be encouraged to make themselves comfortable, take breaks, eat, stretch or walk around as needed.
As with many negotiations, the positions put forward by various parties will evolve. Lawyers should ensure that their clients do not simply give up on the prospect of settling the matter and end the mediation if the first offer they receive is unsatisfactory: a preliminary or first offer is often a starting point, rather than a bottom line.
If an agreement is achieved, it is recommended to ensure that a document formalizing the agreement, often in the form of minutes of settlement, is signed sooner rather than later, ideally before the mediation ends. Allowing an agreement to languish unformalized may result in a party changing his or her mind and withdrawing from the agreement.
Once the parties exchange executed copies of the minutes of settlement or another settlement document, the agreement will be binding. In addition to the minutes of settlement, many litigants will also execute a full and final release, which ensures that the issues that were settled may not be revisited by the parties in future lawsuits or court applications, and may serve as an estoppel against a party seeking to renew or re-open the dispute.
Parties under disability
Rule 7.08 of the Rules of Civil Procedure requires that any settlement agreement made on behalf of a party under disability, such as incapable adults and minors, must be approved by a judge. If such an agreement is made, the parties must commence a motion seeking the Court’s approval of the settlement. The motion should be brought on notice to the Office of the Children’s Lawyer or the Public Guardian and Trustee as needed.
Some mediations do no succeed at achieving a settlement agreement. If this is the unfortunate result, the mediation briefs and the content of the discussions are never made public or disclosed to the Court, and the mediator will never be called to testify as to what was said at the mediation. The only information that may be passed to a judge is that a mediation was held and did not succeed.
In some cases, a further mediation may be scheduled, if it appears that the parties may yet be able to come to an agreement. If not, the litigation will continue where it left off, and will often progress on to the exchange of affidavits of documents, examinations or an exchange of further pleadings.