Early mediation in workplace disputes a tradeoff between savings and information

By Staff

Employers and employees must weigh the benefits of potentially significant cost savings against the uncertainty of an incomplete record when opting to mediate their workplace disputes early in the litigation process, Toronto mediator Bernard Morrow tells

While many workplace mediations occur in the context of civil litigation before the court — often involving allegations of wrongful dismissal — Morrow, principal of the full-service dispute resolution firm Morrow Mediation, encourages parties to get together as soon as they can after a demand letter has been sent and before formal pleadings have been exchanged.

“A key benefit of early mediation is getting the parties talking before the costs really escalate,” says Morrow, explaining that legal fees accumulate exponentially once formal litigation commences with the exchange of pleadings and affidavits of documents, and the scheduling of examinations for discovery.

In addition, Morrow says the longer a case goes on in litigation, the more clouded each side’s judgment becomes by entrenched positions, mounting cost concerns and the pressure to realize a return on the investment in the litigation process.

“It can become more difficult to settle a case as the participants become more invested, both emotionally and financially,” he says. “Often, the cost of settlement increases as the litigation costs mount."

“Generally, workplace disputes lend themselves well to early mediation, particularly in the case of terminations,” Morrow says. “If it’s a wrongful dismissal claim where the length of reasonable notice is the central issue, both the employee and employer should have a pretty good idea of the settlement range and, accordingly, be motivated to come to an early settlement after realistically weighing the value of the claim against the cost of litigation. An early settlement allows the terminated employee to get on with their life and the employer to achieve both cost certainty and closure.”

Still, he acknowledges that the choice of early mediation involves a trade-off, particularly in those cases where the issues are contentious and involve allegations of cause or human rights violations.

“The risk in those cases is that neither side knows as much as they might like to know about the strengths and weaknesses of their case in order to make an informed decision about what a reasonable settlement might look like,” Morrow says.

Despite its potentially hefty cost, he says the exchange of pleadings and the discovery process can add clarity before proceeding to mediation in more contentious cases.

Morrow adds, though, that increasingly he is being asked to mediate early — before the exchange of pleadings — even in cases where cause or human rights issues are alleged and the majority of those mediations are resulting in settlements. He credits counsel for sharing information informally early in the litigation process, including witness statements and investigation reports, so that the parties are in a better position to assess the strengths and weaknesses of their case when they arrive at mediation.

“Even in the more contentious cases involving cause and human rights allegations, if the parties have voluntarily shared key information before the commencement of formal legal proceedings, an informed risk assessment can be conducted by each side and an early mediation can be an extremely productive cost-saving strategy,” he says.

At the end of the day, in Morrow’s view, "getting together with the assistance of a mediator early in the life of a workplace dispute should be viewed as a valuable opportunity — for information sharing, risk assessment and meaningful settlement discussions.”

He adds that since most of these disputes settle at mediation, the tradeoff between complete information sharing and cost savings is generally worth the risk.

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