The Lawyers Weekly - March 23, 2012

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Ontario Superior Court Jus-
tice James Sloan laid out the
ground rules succinctly: “Parties
are not forced to resolve their
differences through mediation.
It is simply a process all parties
must attempt, subject to the
rules and the time limits which
are in place.”
In each of the four accident
benefit cases before him—
Cornie v. Security National,
Hurst v. Aviva Insurance, Singh
v. Aviva Insurance and Clarke v.
State Farm Mutual — the insur-
ers moved to strike the plaintiffs’
claims, or alternatively have the
actions stayed, on the grounds
that mediation through the
Financial Services Commission
of Ontario (FSCO) had yet to
take place.
Until this point, it was gener-
ally accepted that a plaintiff could

JOSEPH
GRIFFITHS

not commence formal legal action until mediation had been attempted and a report of mediator outlining the unresolved issues had been issued.

While Justice Sloan acknowledged that the benefits of mediation are only realized if all parties attempt it, he went on to find that a plaintiff need not wait “in perpetual limbo” to attempt an actual mediation before being authorized to move forward with litigation and/or arbitration.

In dismissing all four motions,
he concluded that, where media-
tion was not conducted within 60

days of the plaintiff’s application, as stipulated by Rule 19.1 of the Dispute Resolution Practice Code, a plaintiff was entitled to treat the mediation as failed.

Interestingly, a similar conclusion was reached by FSCO arbitrator Jeffrey Rogers in Leone v. State Farm Mutual, a decision released two days after Justice Sloan’s decision. In Leone, the insurer took the position that the arbitration could not proceed because mediation had not yet failed at the time the applicant had filed for arbitration. Like Justice Sloan, Rogers concluded that mediation is deemed to have failed once the 60-day time period prescribed by s. 10 of Ontario Regulation 664 had expired.

The consequences of these
two decisions are significant: By
deeming mediation failed after
60 days, the legislative intention
that parties attempt meaningful
mediation is neutralized and
replaced with a requirement that
a plaintiff need only apply for
mediation and wait briefly
before escalating the dispute
with litigation. More to the
point, the decisions essentially
grant the court and FSCO legal
jurisdiction to hear disputes that
were otherwise statutorily
barred from proceeding.

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