Ontario’s Commercial Mediation Act, 2010: Too important to ignore, too ineffective to keep

Law360 Canada (November 3, 2017, 8:37 AM EDT) --

Mitchell Rose

Six years ago, I enthusiastically blogged about the first anniversary of Ontario’s Commercial Mediation Act, 2010 (CMA), which I called “The Most Important Legislation You’ve Never Heard About.” I naively hoped the situation would soon change. Sadly, I am willing to bet that many readers of this article have still never heard of the CMA. Yet it is vital and powerful legislation. However, ignorance of the CMA may be due, in part, to its limited scope — and even its name. That’s a shame, as it represents a lost opportunity and it may, therefore, be time to reform, or replace, the CMA.

The CMA’s purpose is “to facilitate the use of mediation to resolve commercial disputes.” The CMA is beneficial to businesspeople. It promotes mediation for dispute resolution with the certainty provided by a uniform set of rules, along with the assured enforcement of mediated settlements by the courts. Of course, if a settlement is not reached at mediation, the parties would still be free to litigate in most cases.

The CMA is based on the UNCITRAL (United Nations Commission on International Trade Law) Model Law on International Commercial Conciliation (2002). Currently, Nova Scotia and several U.S. states have similar legislation to Ontario’s CMA. Thus, an international regulatory framework for the conduct of mediation and the judicial enforcement of mediated settlements was introduced into Ontario law.

Here are some of the CMA’s highlights:

• It does not apply to collective (labour) agreements, computerized mediation or other forms of mediation not conducted by an individual, actions taken by a judge or arbitrator in the course of judicial or arbitration proceedings, and mediations provided by Rules of Civil Procedure (after the commencement of litigation) such as Mandatory Mediation (R. 24.1).

• Parties can modify the provisions of the CMA, with some exceptions, or they can opt out of it altogether.

• The CMA provides a code regarding the conduct of the mediations to which it applies, including commencement and termination, appointment and duties of a mediator, and the mediation process itself.

• Confidentiality of information and inadmissibility in arbitral, judicial or administrative proceedings.

• Transformation of the mediation into a mediation-arbitration (med-arb) on consent of the parties.

• The possibility of agreeing not to proceed with arbitral or judicial proceedings before a mediation is terminated — with an exception where “an arbitrator or court may permit the proceedings to proceed and may make any order necessary if the arbitrator or court considers, (a) that proceedings are necessary to preserve the rights of any party; or (b) that proceedings are necessary in the interests of justice.”

(It should be noted that s. 11 of Ontario’s Limitations Act, 2002 provides that its basic and ultimate limitation periods may be suspended by agreement while mediation is in progress. One should not assume, however, that limitation periods prescribed under any other legislation would be similarly suspended).

• The finality of mediation settlement agreements and their enforcement by the court, including the ability to apply to the registrar of the superior court for an order authorizing “the registration of the agreement with the court.”

The definition of “commercial dispute” in s. 3, to which the CMA applies, at first, appears to be quite broad: “A dispute between parties relating to matters of a commercial nature, whether contractual or not, such as trade transactions for the supply or exchange of goods or services, distribution agreements, commercial representation or agency, factoring, leasing, construction of works, consulting, engineering, licensing, investment, financing, banking, insurance, exploitation agreements and concessions, joint ventures, other forms of industrial or business co-operation or the carriage of goods or passengers.”

Despite this, I suspect that one reason why the CMA has not attracted widespread use and attention is that it is limited to commercial disputes — and commercial disputes, in practice, may be conceived of narrowly by counsel or parties — despite the legislative attempt at a broad definition. Interestingly, no court in Canada has, to date, considered the definition of “commercial dispute” under the Ontario or Nova Scotia legislation.

I wonder whether the title of the CMA alone is enough to make one conclude that it highly restrictive in terms of its subject matter, leading an interested party to pass it by without consideration.

Also, the CMA likely does not cover several types of disputes that are ripe for prelitigation mediation, including employment law (where there is no collective agreement) and neighbour disputes regarding land use and boundaries.

Mediator and arbitrator Colm Brannigan recently suggested that “the CMA should be renamed the Mediation Act, and expanded to cover a wider area of disputes.” I agree. He also explained that “The Mediation Act idea came from Ireland, a litigious jurisdiction which has just passed comprehensive legislation of the same name, and which is not limited to commercial disputes.  

While broader, voluntary, prelitigation mediation would be beneficial, I will leave the reader with one important question: Despite changes that could be made to the CMA’s application, would the public be better served by a comprehensive, mandatory, prelitigation mediation framework. This could lead to a decrease in time, cost and risk to parties in conflict — and fewer lawsuits.

Mitchell Rose is a lawyer, mediator and settlement counsel with Stancer, Gossin, Rose LLP in Toronto. He will be a panellist at the Ontario Bar Association program “Effectively Utilizing the Continuum of ADR Processes” on Nov. 15, 2017 where he will discuss various prelitigation settlement tools, including the CMA.