Litigation can be time-consuming, expensive, and emotionally draining. But in Ontario civil lawsuits, parties have important tools available to help them resolve disputes early and efficiently, long before trial. Two of the most effective tools are mediation and offers to settle under Rule 49 of the Rules of Civil Procedure.
In this blog, we’ll explain how mandatory mediation works in Ontario’s civil courts, including when and where it applies, what to expect from the process, and why it often leads to earlier resolution. Then we’ll turn to Rule 49, a powerful settlement mechanism that not only promotes compromise but also carries serious cost consequences if a party refuses a reasonable offer and fails to do better at trial.
Mediation
Mediation is a confidential, informal process where a neutral third party, the mediator, helps people involved in a lawsuit try to settle their dispute out of court. The goal isn’t to decide who’s right or wrong, but to find a mutually acceptable solution, saving both sides time, money, and stress.
The mediator does not act as a judge. They don’t give legal advice, impose settlements, or take sides. Their role is to facilitate dialogue and help the parties better understand each other’s positions.
The Mandatory Mediation Program applies to civil lawsuits in Toronto, Ottawa, and Windsor, under Rule 24.1 of the Rules of Civil Procedure. These cases typically involve disputes over money, property damage, contracts, or reputation.
Additionally, under Rule 75.1, certain estate, trust, and substitute decision matters (e.g. where someone lacks capacity) must also go to mediation, unless the court grants an exemption.
- Timing:
- Mediation must take place within 180 days after the first defence is filed, unless the parties agree otherwise or a court orders a different timeline.
- Mediator selection:
- Parties may choose a mediator from the court’s official roster or select one independently. If no agreement is reached, the local mediation coordinator will assign a mediator.
- Pre-mediation requirements:
- At least 7 days before the session, parties must submit a Statement of Issues outlining the legal issues, their positions, and relevant documents.
- Participation:
- All parties must attend. If a party fails to appear or submit documents, the mediator can cancel the session and file a Certificate of Non-Compliance, which may lead to court-imposed penalties.
Under Rule 75.1, in cases involving estates or substitute decisions, the party starting the lawsuit must file a motion for directions. The court will then decide:
- Who is responsible for arranging the mediation;
- The deadline for mediation;
- Who must attend and how they will be notified;
- How costs will be shared.
Mediation must be scheduled promptly, and each party must serve their Statement of Issues at least 7 days before the mediation date.
Whether under Rule 24.1 or 75.1, the mediation is conducted by a private-sector mediator. Both lawyers and trained non-lawyers may act as mediators. Parties are encouraged to research their mediator’s:
- Training and experience;
- Familiarity with civil litigation or estate matters;
- Approach to mediation;
- Fees and scheduling flexibility.
In Ontario’s Mandatory Mediation Program, a roster mediator is a qualified mediator who has been approved and listed on the government’s official roster for civil and estate mediations. These mediators meet strict training and experience requirements and are available to be assigned to cases in Toronto, Ottawa, and Windsor, where mandatory mediation applies.
Roster mediators are private-sector professionals, but their fees are regulated and capped, making them much more affordable than hiring a senior litigation lawyer for a full day of mediation. For example, while some top-tier lawyers may charge several thousand dollars per day for private mediation, roster mediators offer substantially lower rates set by the government to ensure accessibility.
In fact, many senior lawyers who normally charge premium fees voluntarily make themselves available for roster mediations for half a day each week or month, offering their services at a deeply discounted rate as a way to give back to the legal community. That said, these high-demand mediators often have long wait times, sometimes six months or more, due to limited availability.
To view the full list of roster mediators and find someone suitable for your case, you can visit the Ontario’s official roster list.
In complex multi-party litigation, achieving a comprehensive settlement involving all parties can be challenging. Partial settlement agreements, such as Pierringer and Mary Carter agreements, offer strategic solutions in these scenarios.
| Pierringer | Mary Carter |
|---|---|
| Pierringer agreements are particularly beneficial for simplifying proceedings and reducing litigation costs by narrowing the focus to the remaining defendants. | Mary Carter agreements can be advantageous in applying pressure on non-settling defendants and facilitating partial settlements, though they may also introduce complexities regarding party alignments and trial dynamics. |
| Settling defendant exits the litigation. | Settling defendant remains in lawsuit. |
| Plaintiff proceeds to trial only against the non-settling defendant | The settling defendant’s liability is capped, while the non-settling defendant’s liability is maximized. |
| When the settling defendant overpaid in the settlement, the remaining defendant may pay less (benefit from the overpayment). And when the plaintiff agrees to indemnify the settling defendant for contribution claimed by the non-settling defendant. | Settling-defendant may actively collaborate with plaintiff against remained defendant. |
| Existence of the agreement is to be disclosed for trial, while dollar amount remains confidential until trial. | Agreement must be disclosed immediately. |
Offer to Settle
A Rule 49 offer is a formal, written proposal by one party to another, suggesting terms to settle a legal dispute. The primary objective is to encourage early resolution, thereby saving time, reducing legal expenses, and alleviating the court’s workload.
The Importance of Timely Offers
To leverage the benefits of Rule 49, offers must be made at least seven days before the commencement of the hearing. However, initiating offers earlier in the litigation process can maximize their strategic advantage. It’s advisable for lawyers to discuss potential settlement offers with clients at multiple stages:
- Early in the proceedings:
- To set the stage for possible settlement.
- Before discovery:
- To reassess positions based on disclosed evidence.
- Just before trial:
- To make a final attempt at resolution and avoid trial costs.
Rule 49 of Ontario’s Rules of Civil Procedure outlines specific cost consequences associated with offers to settle in civil litigation. These consequences are designed to encourage parties to make and accept reasonable settlement offers, thereby promoting efficiency and reducing the need for prolonged trials. The cost implications vary depending on the nature of the offer and the outcome of the trial. Below are the cost consequences for four distinct scenarios:
- Plaintiff’s Offer Equals or Is Less Than Judgment Obtained:
If a plaintiff makes a written offer to settle, in accordance with Rule 49, at least seven days before the trial, and the defendant does not accept it, leading to a trial where the plaintiff obtains a judgment equal to or greater than the offer, the following cost consequences apply:- The plaintiff is entitled to partial indemnity costs up to the date of the offer.
- From the date of the offer onwards, the plaintiff is entitled to substantial indemnity costs.
- Plaintiff’s Offer Is Less Favourable Than Judgment Obtained:
If the plaintiff’s offer to settle is less favourable than the judgment ultimately obtained at trial, the standard cost rules apply:- The plaintiff may be entitled to partial indemnity costs throughout the proceedings.
- The specific allocation of costs remains at the discretion of the court, considering all relevant factors.
- Defendant’s Offer Equals or Is Greater Than Judgment Obtained:
When a defendant makes a written offer to settle, adhering to Rule 49, at least seven days before the trial, and the plaintiff does not accept it, leading to a trial where the plaintiff obtains a judgment equal to or less than the defendant’s offer, the cost consequences are as follows:- The plaintiff is entitled to partial indemnity costs up to the date of the defendant’s offer.
- From the date of the offer onwards, the defendant is entitled to partial indemnity costs.
- Defendant’s Offer Is Less Favorable Than Judgment Obtained:
If the defendant’s offer to settle is less favorable than the judgment the plaintiff ultimately obtains at trial, the standard cost rules apply:- The plaintiff may be entitled to partial indemnity costs throughout the proceedings.
- The specific allocation of costs is determined by the court, taking into account all pertinent factors.
While parties may discuss settlement terms orally, Rule 49 mandates that offers be in writing to be effective. These written offers are typically made “without prejudice,” meaning they cannot be used as evidence in court to prejudice the offering party if the case proceeds to trial.
Not all cases are amenable to settlement. Certain matters, such as constitutional challenges or cases involving significant public interest (e.g., same-sex marriage challenges), may necessitate a judicial determination. In such instances, while Rule 49 offers may still be made, the likelihood of settlement may be minimal.
This blog is for general informational purposes only and does not constitute legal advice. For advice on your specific situation, please consult a licensed lawyer.
