Estate litigation is often emotionally and financially challenging. Fortunately, many trust and estate disputes resolve through mediation without the need for a trial.
In certain jurisdictions, including Toronto, many estate, trust and substitute decision-making proceedings are subject to mandatory mediation pursuant to Rule 75.1 of the Rules of Civil Procedure. This includes proceedings such as will challenges, dependant support claims, contested passings of accounts, and certain proceedings involving trusts and substitute decision-making.
But “mandatory mediation” does not mean mandatory settlement.
Mediation is a confidential negotiation process in which a neutral third party – the mediator – assists the parties in resolving some or all the issues between them. Unlike a judge, the mediator does not decide who is right, make findings of fact, or impose an outcome. The decision whether to settle remains with the parties.
Although mediation is a required procedural step in many estate cases, it should not be treated as simply another hurdle on the road to trial. In practice, it can be one of the most valuable stages of litigation.
Mediation gives the parties an opportunity to test their positions, better understand the risks on both sides, and explore solutions that may not be available after a trial. Courts are generally limited to the remedies the law permits. At mediation, parties can often be considerably more creative.
Even when a case does not settle on the day of mediation, the process can still be productive. In my experience, many mediations that do not result in an immediate settlement nevertheless help narrow the issues, facilitate the exchange of information, and create a foundation for future negotiations.
The following are five practical ways parties can make the most of mediation:
1. Come Prepared with the Information Necessary to Make Decisions
Settlement becomes considerably more difficult when the parties do not have enough information to evaluate their positions.
A dispute over estate trustee compensation may be difficult to resolve without adequate estate accounts. A dispute involving capacity may depend heavily on the available medical and other contemporaneous evidence. A disagreement over the division or sale of estate property may be difficult to meaningfully negotiate if no one has a reliable understanding of its value.
Mediation tends to be most effective after enough disclosure has been obtained for the parties to understand the essential facts and the important documents.
That does not mean every factual dispute must be resolved before mediation. If that were the standard, there would often be little left to mediate. The goal is instead to ensure that the parties have enough information to make informed decisions about potential settlement.
2. Ensure All Decision-Makers Are Available
A productive mediation can quickly stall if the people whose instructions, consent or approval are necessary to resolve the dispute are not available.
Well before the mediation, the parties should identify who needs to participate and what authority may be required to implement a settlement. Depending on the case, this may involve estate trustees, attorneys for property, litigation guardians, or other stakeholders.
There is little benefit in spending an entire day negotiating a resolution only to discover at the end that a necessary participant has not considered the proposal or cannot provide instructions.
If someone will participate remotely or needs to remain available by telephone, arrangements should be made in advance so that instructions can be obtained as negotiations develop.
Mediation may be the first occasion on which the parties and a neutral mediator are all focused exclusively on resolving the dispute. That opportunity, and associated costs, should not be wasted because the person capable of saying “yes” cannot be reached.
3. Understand Your Best and Worst Day in Court
One of the most significant factors affecting the success of a mediation is whether the parties have a realistic understanding of the range of possible outcomes.
Before attending mediation, parties should consider not only the strengths of their case, but also its weaknesses. Understanding both the best-case and worst-case scenarios often makes it easier to evaluate settlement opportunities objectively and make informed decisions during negotiations.
Outcomes in litigation can be difficult to predict. Witnesses may not give evidence as expected. A judge may interpret an important document differently. Evidence that appears compelling to one party may ultimately be given less weight by the court. Even a party with a strong case faces uncertainty.
Recognizing those risks does not mean abandoning a strong position or lacking confidence in the merits of a case. To the contrary, a realistic assessment of litigation risk is often what allows parties to negotiate effectively. Making or considering a settlement offer is not an admission that the other side is right. It is recognition that litigation involves uncertainty and that there is often a difference between being legally right and obtaining the best practical result.
A settlement allows the parties to exchange some of the uncertainty of litigation for greater control over the outcome. In the right circumstances, accepting a guaranteed result now may be considerably more valuable than pursuing the possibility of a somewhat better result years later.
The relevant question is therefore not simply, “Can I win?”
It is: “Given the cost, delay and risk of continuing, is this settlement better than my realistic alternatives?”
That is a very different analysis.
4. Identify What Really Matters
Litigants sometimes become attached to a particular position without examining what they are actually trying to achieve.
Consider a dispute involving a family home. One beneficiary insists that the property be sold immediately. Another insists that it must not be sold.
Those positions appear irreconcilable.
But the first beneficiary may primarily need access to their share of the estate, while the second may be concerned about having a place to live. Once those underlying interests are identified, the range of possible solutions becomes much broader. Depending on the circumstances, the parties might consider a buyout, a delayed sale, an occupancy arrangement, staged payments, refinancing, or another negotiated solution.
A court may not have the ability, or the information necessary, to craft the arrangement the family needs. At mediation, the parties often do. This is one of mediation’s greatest advantages. Litigation tends to reduce disputes to legal positions. Mediation can make room for practical objectives.
The question therefore should not always be, “How do I get exactly what I demanded?”
Sometimes the better question is, “What am I actually trying to accomplish?”
5. Consider the Bigger Picture
Mediation provides an opportunity to step back from the immediate dispute and consider the broader practical realities facing the parties.
Estate litigation can be stressful, expensive, and time-consuming. A party might ultimately obtain more after two additional years of litigation and still be financially worse off than if a reasonable compromise had been reached at mediation.
This does not mean parties should settle simply because litigation is expensive. Some disputes genuinely require adjudication. However, the anticipated costs, delays and risks of continuing the litigation should ideally remain proportionate to what is at stake.
In estate litigation, there are often additional considerations beyond the legal issues themselves. The opposing parties are frequently members of the same family. They may continue to share children and grandchildren, family businesses, cottages, jointly owned property, or interests in ongoing trusts long after the litigation has ended.
A trial can determine legal rights. It cannot usually repair a family relationship.
Mediation does not guarantee reconciliation, and in some cases, reconciliation is neither possible nor realistic. What mediation can do is provide an opportunity to resolve the legal dispute without unnecessarily intensifying the personal one.
Even where a relationship cannot be repaired, a negotiated resolution may allow the parties to achieve some measure of controlled finality and avoid years of additional conflict.
Conclusion
A successful mediation is not necessarily one in which one party “wins” and the other loses.
The better measure is whether the parties can reach an outcome that is preferable to the realistic alternatives available through continued litigation.
In my experience, the parties who tend to make the best use of mediation arrive prepared. They understand the evidence. They know the strengths of their case but are equally conscious of its weaknesses. They have thought carefully about what matters most to them, and they are prepared to evaluate solutions that may look a little different from the result they originally expected.
Litigation is inherently uncertain. Mediation gives parties an opportunity to replace some of that uncertainty with choice.
Practice Tip: Before attending mediation, ask yourself one simple question: “What are the two or three outcomes that matter most to me?” Understanding your priorities before negotiations begin will help you evaluate settlement opportunities more effectively and make informed decisions throughout the mediation.
If you are involved in an estate dispute or preparing for mediation, obtaining timely legal advice can help you better understand your options and make informed decisions throughout the process. The Estates & Trusts Litigation team at Mills & Mills LLP has extensive experience representing clients at mediation and providing mediation services. Contact us to discuss your circumstances and learn how we can assist.
At Mills & Mills LLP, our lawyers regularly help clients with a wide range of legal matters including business law, real estate law, estate law, employment law, health law, and tax law. For over 140 years, we have earned a reputation amongst our peers and clients for quality of service and breadth of knowledge. Contact us online or at (416) 863-0125. The material provided through the Mills & Mills LLP website is for general information purposes only. It is not intended to provide legal advice or opinions of any kind.
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