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Canadian Med-Arb: Arbitrator Expressing “Tentative Views” in Mediation Not Indicative of Bias

James Plotkin


  • The case involved judicial review of an adjudicator's decision under the Canada Labour Code. The employee disputed the decision to award monetary compensation instead of reinstatement after being unjustly dismissed.
  • The Federal Court of Appeal dismissed the appeal, affirming the lower court's ruling on settlement privilege.
  • It made comments regarding mediators' expressions of tentative views during mediation, relevant to labor arbitrations and private commercial arbitrations.
  • The FCA's decision highlighted doctrinal overlap between labor arbitrations/adjudications and private commercial arbitrations in Canada, particularly regarding the reasonable apprehension of bias test and evaluative mediation techniques.
Canadian Med-Arb: Arbitrator Expressing “Tentative Views” in Mediation Not Indicative of Bias
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In Fono v. Canada Mortgage and Housing Corporation, 2021 FCA 125, the Canadian Federal Court of Appeal (FCA) heard an appeal from a decision to strike parts of the employee’s notice of application for judicial review and affidavit because they contained settlement privileged information, specifically, evaluative statements allegedly made by the labour adjudicator in a pre-hearing mediation, which the appellant argued demonstrated bias. The FCA found the lower court made no error, specifically noting that the impugned statements did not demonstrate bias merely because the labour adjudicator expressed tentative views on offers made and positions taken in the dispute with a view to fostering settlement.

The appeal arose from an application for judicial review of an adjudicator’s decision rendered under Part III of the Canada Labour Code, R.S.C. 1985, c. L-2. In the initial proceeding, the employer conceded the employee was unjustly dismissed from his job but prevailed in arguing that the employee should not be reinstated. The employee appealed to the federal court challenging the decision to award him 12 month’s pay instead of reinstatement.

In his appeal, the employee alleged that the adjudicator was biased. The employee’s notice of application and affidavit evidence contained what the federal court found to be settlement privileged information aimed at buttressing the bias allegation. This included statements the adjudicator purportedly made during the mediation. The federal court ruled that the allegation of bias was untimely and did not consider it on the merits.

The employee then appealed to the FCA. The FCA held that the lower court rightly concluded that the materials struck were settlement privileged and should not have been considered. Despite this ruling, however, the court made the following comments relevant to arbitrations in which the parties agree to have the same individual attempt to mediate a dispute before acting as the arbitrator:

Further, it is common for labour adjudicators or arbitrators who conduct consensual mediation sessions prior to hearing a case to express tentative views during the mediation as to the potential strengths or weaknesses of parties’ positions with a view to fostering settlement, especially where, as was the case here, the parties are represented by experienced counsel. Such statements are not indicative of bias. [citations omitted]

The court went on to describe the adjudicator’s alleged comments about the quality of an offer the respondent made to the appellant as “standard fare” in mediation. It concluded that such content should not be put before the reviewing court:

It would have a chilling effect on employment and labour mediations and undercut their efficacy if statements such as those the appellant alleges were made by the adjudicator were to be placed before the courts. The comments impugned by the appellant merely reflect the adjudicator’s tentative views as to the strength of the offer made by the respondent as compared to risks associated with pursuing the adjudication. This sort of comment is standard fare in a mediation. The Federal Court therefore did not err in declining to interfere with the . . . order striking the impugned paragraphs on the basis of settlement privilege.

One of the decisions the court cited, Reilly v. Zacharuk, 2017 ONSC 7216, contains a reference to another Ontario Superior Court decision (McClintock v. Karam, 2015 ONSC 1024) that describes the sorts of techniques employed in mediations. The court in that case observed that when the parties agree to have the same person mediate and then arbitrate, they cannot expect the person to wipe his or her mind clean of what they learned in the mediation phase if and when it comes time to arbitrate. The mediator/arbitrator must nevertheless keep an open mind and refrain from coming to a view before hearing the parties’ cases:

In order to effectively mediate, the person appointed must engage in a process that has a good deal of informality. Mediative techniques include persuading, arguing, cajoling, and, to some extent, predicting. Mediation is a process to secure agreement, if possible. All of those techniques, as well as others, will come into play in trying to secure agreement.
If the mediator/arbitrator must move to the arbitration phase, it cannot be expected that he or she can entirely cleanse the mind of everything learned during the mediation phase, and of every tentative conclusion considered, or even reached, during the mediation phase. However, at a bare minimum the parties are entitled to expect that the mediator/arbitrator will be open to persuasion, and will not have reached firm views or conclusions.

These decisions arose in the context of family law arbitrations under the Arbitration Act, 1991.

The FCA dismissed the appeal, with costs, and returned the matter to the lower court.

The FCA’s decision, read together with the Ontario Superior Court family law arbitration decisions that it references, demonstrate a doctrinal overlap between Canadian labour arbitrations/adjudications and Canadian private commercial arbitrations. Although termed “arbitrations,” labor arbitrator decisions are treated under Canadian administrative law principles. Indeed, much of administrative law jurisprudence comes from the labour arbitration realm. While courts and arbitration practitioners must take care when borrowing from administrative law, there are points of convergence, including the accepted “reasonable apprehension of bias test” attributed to de Grandpré J.’s dissent in Committee for Justice and Liberty v. National Energy Board, 1976 CanLII 2 (SCC) , [1978] 1 S.C.R. 369. Since med/arb as a form of dispute resolution exists in both labour arbitration and private arbitration, the FCA’s comments are pertinent to arbitrations conducted under Canadian arbitration legislation.

The FCA’s statement that it is permissible for a neutral in a med/arb situation to express “tentative views during the mediation as to the potential strengths or weaknesses of parties’ positions” during the mediation phase is important. Each case will turn on its own facts, and the reviewing court will have to decide for itself whether a mediator crosses the line into demonstrating a closed mind. This decision suggests that when the mediator is also appointed to arbitrate should the mediation fail, he or she should take care not to demonstrate they have come to a view, although evaluative mediation techniques in general are entirely legitimate in med/arb processes.

Note that, in McClintock v. Karam, 2015 ONSC 1024, the court found the mediator/arbitrator’s conduct crossed the line. His comments evidenced, on a balance of probabilities, that he had all but made up his mind.