ADR principles should guide civil pretrials

While the stated purpose of civil pretrials is settlement, our Rules of Civil Procedure provide a process that has a lot to do with litigation and little to do with settlement. Perhaps it’s no accident that, in the Superior Courts of Justice, the process is referred to as a “pre-trial” rather than as a “settlement conference” as it is in small claims court. This raises the question of whether a settlement approach that is centred on debating facts and legal issues limits the opportunities for settlement. Perhaps it’s time to introduce ADR principles into pretrial conferences.

 It is worth noting that the rules governing pretrials contain a checklist of facts, issues, admissions, liability, quantum of damages, the need for expert evidence and trial scheduling. Compliance with this checklist should assist counsel to gauge the strength or weakness of their case, especially where the pretrial judge expresses an opinion. However, not all judges express opinions. So, it remains up to counsel to shift the paradigm from litigation to resolution if settlement is the real purpose of pretrials.

Interestingly, pretrial conference rules don’t contain any reference to interest-based negotiation, which is central to ADR. The only indirect reference that might permit an ADR-based approach is to “any other matter that would assist in achieving a just, most expeditious and least expensive disposition.”

Given the permissive nature of the pretrial rule, we need to ask how ADR principles might find their way into pretrials. And the answer to this lies in the hands of plaintiff’s counsel when preparing a pretrial conference brief. Once the rule’s enumerated matters are satisfied, plaintiff‘s counsel could shift the discussion toward an analysis of the value of the litigation and its costs from the beginning of the action through to the end of trial. This would be particularly helpful where damages might be awarded at the lower end of the Superior Court’s monetary jurisdiction.

And where issues of legal principle increase the chances of an appeal, the financial and timeline costs need to be addressed as well. Even more importantly, the proven inability of a defendant to fully satisfy judgment should also be considered as a critical negotiating factor. Better to accept a reasonable settlement offer rather than risk recovering less or nothing at all.

Where the litigation involves commercial matters, other costs might be addressed, such as the provable opportunity losses each party is likely to suffer while they remain in conflict. Those losses might involve time away from developing new business, bidding on new contracts and wasted development expenses. As well, if the parties need and want to continue to do business with each other but are reluctant to do so while their lawsuit remains unresolved, a cost-benefit analysis focused on their disrupted business relationships would put the dispute in better perspective. Should the lost opportunity costs not justify the litigation, the message is that it’s time to settle.

Another factor that parties face but generally do not openly discuss is litigation fatigue. The longer the battle goes, the more entrenched they become while at the same time the more frustrated they are with the expense of litigation and with long timelines, especially in our larger cities. Provided that counsel enjoy good communications with one another, and parties feel the same way, this may be addressed at a pretrial without sacrificing leverage. Because litigation is stressful, the parties often become passive-aggressive. The critical point is that if plaintiff’s counsel paves the way for this kind of dialogue, it becomes difficult for the defendant’s counsel to appear unresponsive.

For a pretrial conference to work well, counsel need to collaborate with their clients before preparing their pretrial conference briefs. While they do not depend on their clients for information related to the legal issues raised in their briefs, they are unlikely to have the information needed to deal with relevant ADR issues. As well, clients in conflict who attend a pretrial without preparation are more likely to fall back on familiar behavioural patterns, rehashing and blaming the other party. It isn’t surprising that blaming exercises produce vicious circles.

Simply put, the parties need to be prepared to discuss settlement by shifting away from a fault-based discussion to a discussion of all their material and psychological interests. By mapping these out, they may discover that they have more in common than they realize. And it is these common interests that are the springboard for any discussion of workable settlement options. Even if the Rules of Civil Procedure do not expressly mandate this kind of ADR discussion, they do not prevent it. And that provides counsel with an opportunity to work with clients to help them settle.