Mediation is recognized as an effective dispute prevention and resolution (DPR) mechanism across Canada and is increasingly incorporated into legal frameworks and practices due to its potential to save time, reduce costs, and preserve relationships or reputation.

In Canada, mediation is typically defined as a structured, voluntary and confidential process involving a neutral third party, known as the mediator, who facilitates communication and negotiation between disputing parties. The objective is to assist the parties in reaching a mutually acceptable resolution, either to prevent disputes and conflicts from escalating or to avoid litigation. Mediation is a non-adversarial process that prioritizes collaboration and mutual understanding over confrontation.

It is widely recognized across the country that for a DPR mechanism to be considered mediation, certain fundamental principles must be upheld:

• The process is led by an independent and neutral third party.
• The parties participate voluntarily and are free to withdraw from the process at any time.
• Strict confidentiality is maintained throughout the process.
• The parties retain control over the content of the mediation and its outcomes.
• The parties must engage in the process in good faith and negotiate accordingly.

The mediator plays a vital role in supporting parties as they engage in dialogue, clarify their perspectives, define the issues in dispute, identify their needs and interests, explore potential solutions, and, if possible, reach a mutually satisfactory agreement. In some cases, the parties may request the mediator’s assistance in collaboratively developing proposals to prevent or resolve their dispute.

Specific responsibilities of the mediator

Designing the process. Often referred to as the “architecture of the process”, the design is a critical element in ensuring the success of mediation. Mediators, with their expertise and experience, are uniquely positioned to craft a process that fosters effective communication, ensures fairness and maximizes the potential for resolution. The ultimate goal is to ensure the mediation proceeds smoothly, with all participants feeling confident in the process. Key components of process design include:

• Selecting mediation approaches, such as the distributive, evaluative, or integrative models.
• Establishing ground rules to create a safe and respectful environment.
• Choosing the mediation venue and format (e.g., in-person, virtual or hybrid).
• Determining appropriate time frames and schedules.
• Identifying and managing participants, including any necessary advisors or experts.
• Drafting the mediation protocol to define the structure and expectations of the process, including procedural rules aligned with the applicable legal framework and best practices applicable where the mediation is conducted.

Facilitating communication. Mediators create an environment conducive to open and respectful dialogue. They ensure that all parties can express their views, clarify misunderstandings and articulate their concerns. This supportive environment is key to building trust and fostering productive discussions. Mediators often also guide parties not only to resolution but to enhance their negotiation strategies and understanding of dispute resolution processes.

Identifying issues. Mediators help parties uncover the core issues underlying their dispute, encouraging a focus on needs and interests rather than entrenched positions. They assist in identifying the root causes and creating opportunities for resolution.

Exploring solutions. While mediators do not impose decisions, they guide discussions to empower the parties to generate their own solutions. Through brainstorming and creative problem solving, mediators encourage the exploration of mutually beneficial outcomes that might not arise in adversarial contexts. This approach keeps the resolution process firmly in the hands of the parties involved.

Maintaining neutrality. A cornerstone of the mediator’s role is impartiality. Mediators remain neutral throughout the process, ensuring they do not favor any party or allow biases to influence the proceedings.

Encouraging fairness. Although mediators do not decide outcomes, they play a pivotal role in guiding parties toward fair and balanced agreements. Mediators help ensure that all voices are heard and that the process respects the interests of everyone involved.

Adaptability and context-specific involvement

The extent and manner of a mediator’s involvement can vary significantly depending on the circumstances and complexity of the dispute. Mediators must consider proportionality in terms of cost, time and the nature of the issues at stake. For instance:

• Simple disputes. In cases involving relatively straightforward disagreements, the mediator’s involvement may focus primarily on facilitating communication and encouraging quick resolutions.
• Complex or multiparty disputes. For disputes involving significant stakes, intricate legal issues or multiple stakeholders, the mediator may take on a more active role in designing a detailed process and managing the dynamics between parties.

By adapting their approach to fit the specific needs of the parties and the dispute, mediators in Canada invest a substantial amount of energy and time to ensure that the process remains efficient, respectful and aligned with the overarching goals of the mediation.

Along with negotiation, the other three primary DPR mechanisms in Canada are mediation, arbitration and litigation, each serving distinct purposes and offering unique benefits. A critical distinction lies in binding authority: mediation is non-binding unless a settlement agreement is reached by the parties, allowing for flexibility and collaboration, while arbitration and litigation result in binding decisions, with arbitration awards being enforceable under provincial or federal legislation and litigation judgments carrying legal force and often setting precedents. This flexibility in mediation makes it particularly appealing for disputes where maintaining relationships or confidentiality is a priority.

Another significant difference is formality and public exposure. Mediation is an informal, private process designed to foster mutual understanding and encourage creative, mutually beneficial solutions. By contrast, arbitration is more formal, with procedural rules akin to a trial, but it remains private. Litigation, however, is the most formal and adversarial option, with proceedings open to public scrutiny and decisions recorded in public registries, which can have reputational impacts.

Lawyers and businesspeople exploring Canada’s DPR mechanisms should consider the time and cost implications, as litigation and arbitration are often lengthy and expensive, while mediation is typically faster and more cost-effective.

The enforceability frameworks of the United Nations (UN) Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and the UN Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention”) distinguish arbitration and mediation as attractive options for resolving international disputes involving Canadian parties. It is to be noted that Canada is a signatory to the New York Convention but has not yet signed the Singapore Convention on Mediation due to several reasons rooted in its constitutional framework, jurisdictional complexities and policy considerations. As it concerns the enforceability of mediated agreements, Canada and provincial governments have adopted robust legal frameworks or practices that aim at the recognition and enforceability of mediation agreements, both domestically and in cross-border contexts.

Table 1 - comparison of mediation, arbitration and litigation

This table highlights key elements of a comparative overview of mediation, arbitration, and litigation as DPR mechanisms in Canada.

In Canada, the federal government has not legislated mediation because of the division of powers under the Constitution Act, 1867, (UK), 30 & 31 Vict, c. 3, which assigns jurisdiction over civil and property matters to the provinces. Mediation typically falls under these categories as it is closely tied to provincial control of dispute resolution in areas such as family law, commercial law, and civil litigation. Each province has the authority to establish its own mediation frameworks, leading to distinct rules and practices across the country. The federal government, however, retains jurisdiction over matters like federal and international law disputes, or interprovincial issues, but even in these cases, mediation is generally governed by provincial frameworks. This decentralized approach ensures that provinces can tailor mediation laws to their unique legal and cultural contexts, including the fact that the province of Québec follows a civil law system, contrary to other provinces and territories that adopted the common law system.

Given the scope of this chapter, a detailed exploration of the rules and regulations applicable to each of Canada’s 10 provinces and three territories would be too extensive. Instead, we have chosen to provide an overview of some of the key rules and regulations in the provinces with the largest populations and the highest volumes of business disputes and litigation: Ontario, Québec and British Columbia.

Province of Ontario

Ontario has been at the forefront of developing commercial mediation in Canada, becoming one of the first provinces to enact comprehensive legislation in this area. This commitment is reflected in two key legislative frameworks governing commercial mediation in the province.

The Commercial Mediation Act, 2010, S.O. 2010, c. 16, the purpose of which is to streamline the mediation process for civil and commercial disputes by providing a clear legal framework that ensures confidentiality, encourages voluntary participation and upholds mediated settlement agreements as enforceable. The Government of Ontario promulgated the Act to promote efficiency, cost savings and the preservation of business relationships.

The Mandatory Mediation Program under Ontario’s Rules of Civil Procedure requires parties in certain commercial and civil cases in Toronto, Ottawa and Windsor to participate in mediation early in the litigation process. The program’s goal is to encourage early resolution, reduce court backlogs and save time and costs for parties. While mediation under this program is mandatory, settlements reached are voluntary and legally binding only if both parties agree. It is noteworthy that some commercial matters may not fall under the program, such as cases in highly complex or large-scale commercial disputes and certain injunctions or motions where expedited processes are required.

Province of Québec

Under the Code of Civil Procedure, CQLR, c. C-25, parties are required to consider private DPR mechanisms, such as mediation, before bringing their dispute to court. In addition to party-driven mediation, the Code also provides for a judge-led public DPR mechanism called Settlement Conference, where a judge facilitates negotiations between parties to help them reach a mutually agreeable resolution. This hybrid approach fosters a culture of agreement-based conflict resolution and highlights Québec’s strong commitment to DPR by incorporating mediation into both pre-litigation and judicial processes.

Furthermore, the Code provides a detailed procedural framework for mediation when parties have not explicitly defined one. This includes rules on confidentiality, the role of mediators and the enforceability of mediated agreements.

The Government of Québec introduced the Code’s provisions on mediation to serve the public interest by offering effective means to prevent and resolve disputes, thereby reducing reliance on litigation. By promoting appropriate, efficient and fair processes, it encourages parties to take an active role in resolving their conflicts and ensures justice that is accessible, high-quality and timely in a spirit of co-operation and balance.

Province of British Columbia

The Notice to Mediate (General) Regulation, B.C. Reg. 76/2022, applies to certain commercial matters in British Columbia. Businesses can use the regulation to require mediation in disputes involving matters like breach of contract, partnership disagreements and other business-related conflicts, as a step in the resolution process. Once a notice is served, participation in mediation becomes mandatory for all parties unless the court grants an exemption.

The Government of British Columbia promulgated the Regulation to ensure that civil and commercial disputes are explored for resolution before proceeding to trial.

The Supreme Court Civil Rules (B.C. Reg. 168/2009) empower the Supreme Court of British Columbia at planning conferences to recommend or require parties to attend a mediation, and to give directions for the conduct of that mediation. The court can also lead a mediation-like Settlement Conference at pre-trial stage.

Canada actively encourages mediation as an alternative to litigation to promote efficiency, cost savings, and the preservation of relationships or reputations. This is achieved through a combination of legislative frameworks, court programs and a strong focus on the adoption and integration of DPR mechanisms.

How and why mediation is encouraged:

• Legislative support. Provinces embed mediation within their legal frameworks.
• Court-annexed mediation. Many provincial courts incorporate mediation into case management, with judges deploying, recommending or mandating mediation to streamline pre-trial processes and reduce court backlogs.
• Government-backed educational initiatives and efforts to embed DPR in law school curricula. These initiatives and efforts are helping build awareness and capacity for mediation in all spheres of society.
• Cost and time efficiency. Mediation resolves disputes faster and at lower costs compared to litigation. This is particularly appealing in high-stakes sectors like commercial contracts where delays can cause significant financial strain.
• Confidentiality and relationship preservation. Mediation provides a private and collaborative environment, helping parties preserve relationships and protect reputations — especially critical in business disputes and sensitive personal matters.
• Judicial culture. Canadian courts increasingly view DPR as integral to justice. Judges frequently promote mediation to encourage parties to resolve disputes amicably.

In Canada, courts in several provinces can mandate parties to mediate disputes under specific circumstances. This authority typically arises from rules of civil procedure, provincial legislation or judicial discretion.

In Canada, courts in most provincial jurisdictions can impose cost penalties or procedural consequences on parties who unreasonably refuse to mediate or fail to participate in good faith. For example: in Ontario, courts may consider a party’s refusal to mediate when determining costs at the conclusion of litigation. In British Columbia, failure to comply with a Notice to Mediate can result in court orders compelling participation in mediation. In Québec, while mediation remains voluntary, courts may prioritize hearing cases where mediation has been attempted and delay proceedings for parties who have not considered DPR mechanisms, as encouraged under the Code of Civil Procedure.

In most instances, mediations can occur before litigation and during litigation, at any stage. The drivers of promoting the use of mediation include court mandates, legal advisors aiming to reduce costs and delays, and parties prioritizing confidentiality or maintaining relationships or reputation, or wanting to reduce risks and transactional costs.

Many initiatives are being deployed by Canadian courts to integrate mediation into multi-door courthouses or used for early dispute triage.

In Canada, mediation is particularly effective in:

• Commercial disputes, where parties want to preserve sensitive business relationships or industries requiring innovative, non-adversarial solutions.
• Construction disputes involving contract interpretation.
• Workplace conflicts, including harassment and wrongful dismissal claims.
• Family law cases, such as custody and access disputes.

Mediation is suitable for most disputes, including commercial fraud, in Canada. However, cases involving criminal liability or public interest issues may require formal judicial intervention.

Mediation clauses are common, especially in commercial and employment contracts. Canadian courts generally enforce these clauses, provided they are clear and mutually agreed upon.

In Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, the Supreme Court of Canada held that a mediated settlement agreement becomes binding when the parties reach an agreement with clear, unequivocal terms, provided it satisfies the general requirements for a valid contract (offer, acceptance, consideration and mutual intent). The Court also emphasized that mediation confidentiality — a hallmark of the mediation process — does not automatically preclude the enforcement of such agreements if proving the existence or terms of the settlement requires disclosure of mediation communications.

These principles were upheld by the court in a subsequent decision in Association de médiation familiale du Québec v. Bouvier, 2021 SCC 54. That judgment reinforced the binding nature of mediated agreements when they meet the legal requirements of a valid contract. The court emphasized that the parties’ consent to the terms during mediation is paramount but that clear, unambiguous documentation of the settlement enhances enforceability.

In Canada, commercial mediation agreements often include specific terms that address the key concerns of the parties and ensure the resolution is comprehensive, enforceable and aligned with their business needs. These terms not only settle the immediate dispute but also lay the groundwork for future interactions and minimize the risk of recurring conflicts. Often, they serve as blueprints for sustained business relationships and risk management.

The most common agreed-upon terms in settlement comprise:

• Compensation and damages. One of the most common outcomes in commercial mediations. These terms usually include monetary settlements, payment schedules and non-monetary compensation.
• Resolution clauses for potential future disputes. To avoid further disputes when the business relationship is re-established or maintained between the parties, mediated agreements often include provisions outlining how the parties will address conflicts that may arise in the future amongst others arbitration or mediation clauses and DPR escalation mechanisms.
• Confidentiality provisions. Confidentiality is a cornerstone of commercial mediation and is often formalized in the settlement agreement to protect sensitive business information disclosed during the mediation process. Key elements include non-disclosure agreements (NDAs) and reputation protection.

Additional frequent common terms include non-disparagement clauses, release of claims, implementation details and the governing law and jurisdiction.

In Canada, the profession of mediator is not formally recognized as an officially regulated profession at the national level or within one of its 10 provinces. Unlike lawyers or accountants, mediators are not subject to uniform licensing or oversight standards across the country.

However, some provinces have taken steps to establish regulations and professional standards for mediators. For instance, the provinces of British Columbia and Québec have introduced frameworks that set out ethical guidelines, training requirements, and codes of conduct for mediators operating in specific areas. Additionally, most provincial mediation organizations like the ADR Institute of Alberta (ADRIA) and the Institut de médiation et d’arbitrage du Québec (IMAQ) provide certification programs and rosters to ensure quality and professionalism within the field. The ADR Institute of Canada (ADRIC) has also established certification programs and protected its denominations for mediators (“Qualified Mediator” and “Chartered Mediator”) under the Trade-marks Act (R.S.C., 1985, c. T-13).

While these initiatives represent progress, the overall regulatory landscape for mediators in Canada remains fragmented, leaving much of the profession’s credibility and accountability reliant on voluntary standards and professional associations.

To become a credible and trustworthy mediator in Canada, it is generally recognized that one needs to obtain certification from a well-established mediator’s professional associations such as ADRIC and provincial DPR institutes. This would require the would-be mediator to complete a recognized training program and, sometimes, gain practical experience through internships or co-mediation opportunities.

No single governing body exists. However, organizations like ADRIC and provincial DPR institutes regulate mediator standards and training.

There are several organizations in Canada that have adopted a code of conduct for mediators. Each province has different sets of ethical rules. At the national level, the mediators certified by ADRIC must abide by its Code of Conduct for Mediators and its National Code of Ethics.

In addition, some provincial legislation provides for minimal sets of legally binding ethical and deontological rules, such as in the Code of Civil Procedure, CQLR, c. C-25, adopted by the Québec Government.

Mediation processes in Canada are flexible, allowing each mediator to adapt their approach based on their personal style, the needs of the parties and the nature of the dispute. Mediators may vary in how they guide discussions, use tools or facilitate negotiations, but most follow a similar overarching structure:

Pre-mediation session

• Purpose: To prepare the parties and set the foundation for the mediation.
• Format: The mediator often meets individually and confidentially with each party to:
  • understand their perspectives and key issues;
  • explain the mediation process and set expectations; and
  • address concerns about confidentiality, logistics, or power imbalances.

Mediation session(s)

Once the pre-mediation groundwork is complete, the actual mediation session typically unfolds as a structured, four-step process, guided by the mediator:

• Information exchange:
  • Objective: To allow each party to share their views and concerns, as well as conveying the relevant information needed to ensure transparency and good faith negotiation.
  • Style variations: Some mediators prefer joint sessions for transparency and only use private caucuses for sensitive discussions. Other mediators conduct most of the mediation process in private caucuses.
• Identification of needs and interests:
  • Objective: To move beyond surface-level positions (e.g., monetary demands) and identify the underlying needs and priorities of each party.
• Creating options:
  • Objective: To brainstorm creative and practical solutions that meet the parties’ needs and interests.
  • Style variations: Evaluative mediators may suggest solutions based on their expertise, and facilitative mediators might focus solely on empowering the parties to develop their own options.
• Finding a mutually satisfactory solution:
  • Objective: To refine and agree on a solution that addresses the core issues of the dispute.

Documentation and final agreement

Once the parties reach a mutually satisfactory resolution, the mediator ensures that its terms are clearly documented and signed by all parties.

While mediation is widely accessible in Canada, challenges include:

• Unequal bargaining power.
• Costs in complex cases.
• Access to qualified mediators in some regions.

There is a good understanding about mediation in Canada. However, common misconceptions still present include:

• Mediation is ineffective for complex disputes.
• Mediators impose decisions.
• Mediation is a sign of weakness.

Advantages:

• Cost effective and confidential.
• Preserves relationships.
• Faster than litigation.

Disadvantages:

• Non-binding without formal agreement.
• Success relies on mutual cooperation.

Remote mediation is used in commercial mediations and Family Law mediations, especially post-pandemic. Virtual platforms like Microsoft Teams and Zoom are widely resorted to.

However, in-person mediations remain the predominant practice in Canada.

The pandemic underscored the flexibility and efficiency of mediation, resulting in its significantly increased use for resolving disputes. This growth has also been driven by the development of supportive legislative frameworks, proactive court encouragement and favorable governmental policies. Additionally, businesses are increasingly recognizing mediation as a process well suited to the evolving business landscape, where commercial practices are shifting from a primarily competitive, short-term approach to a focus on long-term, strategic partnerships and collaborative business agreements. Mediation offers a practical and effective alternative to litigation, facilitating resolutions that preserve business relationships and promote sustainable commercial success.

The use of AI in mediation is still in its infancy in Canada, with no definitive applications yet fully established. Mediators are currently experimenting with AI tools to explore their potential in enhancing the mediation process. Early applications show promise in several areas:

• Automating case management. Streamlining administrative tasks in complex cases, such as scheduling, document management and communication between parties.
• Mediator preparation. Assisting mediators in organizing information and identifying key issues before the mediation begins, and also through the process.
• Data analysis. Analyzing case data to identify patterns, identify potential settlement ranges and evaluate the parties’ Best Alternative to a Negotiated Agreement (BATNA).

While these uses are still being refined, the integration of AI in mediation holds the potential to improve efficiency and decision making, making the process even more effective for both mediators and disputing parties.