Defendant’s Refusal to Mediate Results in Increased Costs Award

A recent decision of the Ontario Superior Court of Justice suggests that while mediation may not be mandatory in every court jurisdiction in Ontario, a party’s failure, or refusal to participate (usually the insurance company or self-insured employer in a disability insurance case), could result in an increased cost award at the end of the trial.

Canfield v. Brockville

In the case of Canfield v. Brockville Ontario Speedway[i], which was released on May 28, 2018, Mr. Justice Mew awarded additional costs against the defendants where they unreasonably refused to participate in mediation that had been proposed on numerous occasions by the Plaintiff. The case involved injuries sustained at a motor race track. Liability was in dispute as the speedway believed they had discharged their statutory and common law duties of care.

Justice Mew quoted from the case of David v. Transamerica Life Canada[ii] as follows:

In cases where each of the parties has an arguable case, and each faces a risk of loss in the proceeding, mediation can offer a reasonable prospect of settlement. In such cases, a refusal to participate in mediation is a factor that the court can properly consider in determining whether the party has engaged in unreasonable conduct that has caused unnecessary costs to be incurred and that warrants rebuke by means of a costs sanction. This determination requires a case-by-case analysis.[iii]

Mandatory Mediation In Toronto, Ottawa, Windsor

There is mandatory mediation in Toronto, Ottawa and Windsor, but the remaining Courts in Ontario do not require mediation to be completed as a pre-condition to proceeding to a pre-trial and trial. Given the right circumstances as described above, and in more detail in the case, an unreasonable refusal to attend mediation can have adverse cost consequences on the refusing party.

In disability insurance cases, most insurers will agree to participate in a mediation, although they may not want to spend money on the mediation, but even in Toronto, Ottawa or Windsor, attending mediation does not always mean “participating” in the mediation in a productive manner. As Justice Mew notes, no party can be forced to settle their case at mediation, but one wonders if evidence is available to show that the mandatory mediation was treated by one party as a mere formality, without making a genuine attempt to fully participate with a view to reaching settlement, whether this case can also be referred to for the purposes of arguing for an enhanced cost award?

This decision is one that counsel should be reminded of, if and when they are faced with an opposing advocate that refuses to participate in mediation.

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[i] 2018 ONSC 3288

[ii] (2016) 131 O.R. (3d) 314.

[iii] (2016) 131 O.R. (3d) 314 at paragraph 46

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