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MEDIATION AND SETTLEMENT IN ADMINISTRATIVE ADJUDICATION:

A Theoretical and Applied Examination

Sherry Liang

A thesis submitted in conformity with the requirements for the degree of Master of Laws (LL.M)

Graduate Programme of the Faculty of Law, University of Toronto

@ Copyright by Sherry Liang (1998)

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ABSTRACT

MEDIATION AND SETTLEMENT IN ADMINISTRATIVE ADJUDICATION: A THE0WTTCA.L AND APPLIED EXAMINATION

LL-M Thesis, 1998 Sherry Liang, Faculty of Law, University of Toronto

Adjudication is a distinctive form of social ordering, and adjudication by administrative

tribunals can in turn be distinguished fkom court-based adjudication. Criticisms of both types of

adjudication are Iinked to a surge of interest in alternative fonns of dispute resolution, in

particular, informa1 processes such as mediation. These informa1 processes are not themselves

without drawbacks.

The institutionalization of mediation at administrative tnbunals advances certain values.

Mediation is prernised on the primacy of private ordering as a means of deciding disputes. The

rnass mediation of disputes about statutory rights may undercut the important fimction of

tribunals in developing the normative values underlying a legislative scheme. Particular

mediation processes rnay also have an impact on the content o r characterization of the issues

under consideration by a tribunal. The incorporation of mediation processes into administrative

adjudication may affect the particular goals of a legislative scheme, and administrative law

values in generd.

ACKNO WLEDGEMENTS

1 wodd like to express my heartfelt thanks to my thesis s u p e ~ s o r , Professor Janet Mosher, for her thorough and cntical evaluation of my work, and to Professor Hudson Janisch, my second reader and Associate Dean, Graduate Studies at the Faculty of Law this past year for his encouragement of, and enthusiasm for, my studies.

Portions of this thesis are drawn fiom personal experience. My time as a Vice-Chair at the Ontario Labour Relations Board was the inspiration for much of the thesis, and certainly for my interest in administrative adjudication and administrative justice. I acknowledge those coileagues with whom 1 shared some special years at the OLRB.

A number of individu& either spoke with me, or provided helpful material in relation to parts of my thesis, and 1 would like particularly to thank Naomi Overend, Joanne Rosen, Mark Hart, Voy Stelrnaszynski, Kns Heshka, Gai1 Momson and Jack Gibbons. A special mention goes to Cindy Wïlkey, who gave generously of her time and considerable expertise to reviewing portions of the thesis.

Finaily and above d l , my life pariner, Murray Klippenstein, is a continual source of inspiration and encouragement, without whom everything would mean so much less.

September 1998

TABLE OF CONTENTS

INTRODUCTION 1

L1[

III

THE NATURE OF ADJUDICATION

THE NATURE OF ADMINISTRATIVE ADJUDICATION

1. What is administrative lacv 2. The distinctiveness of administrative adjudication

CNTICISMS OF THE ADJUDICATTVE PROCESS

1. Generd critique 2. Critiques of administrative adjudication

THE ALTERNATIVES TO ADSLTDICATION

THE CRITIQUES OF ADR

THE FUTURE OF MEDIATION AND SETTLEMENT IN ADMINISTRATIVE LAW

SETTLEMENT AND ADR PROCESSES AT ADMINISTRATIVE TRIBUNALS: SOME SELECT EXAMPLES

ADR AND THE VALUES OF ADMINISTRATIVE LAW

1. Employment standards mediation: the re-establishment of private ordering 2. Human rights mediation: the CO-existence of corrective justice and

distributive justice 3. Human rights mediation and the value of openness in administrative Law 4. Energy regulation rnediation and the value of participation in

administrative law S. Tribunal scrutiny of settlements

CONCLUSION

1 INTRODUCTION

The tvvo foundations on which this thesis is built are a concern for administrative

decision-miking, and a concern for procedures. The first is perhaps not difficult to understand;

i n n i i ~ v e l y and through experience, many of us share a sense of the importance of administrative

decisionmaking in everyday life. Although courts occupy a particular place in the popular

imaginath, the ubiquity of administrative vibunals means that dthough they may not conjure

up the same notions of "justice", "vindication", or "righting wrongs", tribunals are nevertheless

intewoven into the fabric of people's interactions with each other and with the state. More

c o r n o n thm an appearance in a courtroom is the encounter with a rent review tribunal, a

workpiace injury compensation board, an immigration tribunal, a planning board and any one of

over a thousand regulatory and adjudicative agencies, boards and commissions across the

couritq.

The second concem which drives this thesis is not as obviously engaging. "Procedure" is

s ~ o r d &ch brings to rnind dusty textbooks, rules, constraints and strictures. One of the goals

of this paper is to "bring procedures out of the closet". My contention is that procedures matter.

In particular, the niles, noms, and conventions that structure the m u e r in which decisions are

made or resolutions reached before courts and tribunals are neither neutral nor inert. They reflect

substantive values, and ideas about participation, authority, legitimacy, and justice. Further, in

deteminhg such matters as the mode and breadth of participation, the schedule according to

wbicb a dispute is processed, the order of steps, and the respective roles of parties, decision-

makers and others, procedures have the potentiai to affect the content of disputes and their

1

substantive outcome.

Against these generai premises, 1 will explore the use of mediation as a form of

alternative dispute resolution (ADR) processes within administrative tribunals. I use the term

"ADR" to mean those informal processes which are offered as an alternative to formai

adjudication or authoritative disposition. 1 therefore treat mediation as a process of dispute

resolution, distinct fiorn authoritative decision-making. Mediation is structured, just as

adjudication is, by its own procedures and values. Some of these procedures will Vary fkom

context to context; mediation is employed in settings as diverse as the negotiation of native land

claims, and the resolution of insurance disputes. There are certain elernents of mediative

processes, however, which appear to be cornmon. Mediation is to be seen as a complement to

private negotiation. Mediation injects a facilitator into the process of negotiation, whose purpose

is to assist the parties in reaching self-generated solutions. Mediators are intended to be neutrd.

While they may have an interest in having the parties arrive at an outcome, they are disinterested

in the particular outcome reached. Further, as will be elaborated later, mediation tends to be

"interest-based"; that is, its goal is to free the parties fiom narrow legal d e f ~ t i o n s of both their

problems and solutions. The notion that procedures can have a transfomative effect on issues

and potentiai outcomes (and even on the parties) is not new to mediation. It is, indeed, part of

the promise of rnediation.

While few would deny the appeal of mediation, the prospect of its entrenchment as a

method of dispute resolution which is equally-valid or even preferable to adjudication, has

generated some controversy. Critics have wamed of the potential for the indiscriminate

mediation of legal disputes to cast litigants to the mercy of informal, unscrutinized, and

unsafeguarded processes. Some worry that widespread rnediation will undercut the critical role

of adjudication in setting collective standards for our social interactions. Some of these concerns

are overstated; sorne require serious attention.

In what follows, 1 begin with a discussion of the nature of adjudication in generd, and of

administrative adjudication in particdar. 1 will survey the cnticisms of conventional

adjudicative processes within both courts and tribunals which have in recent years. given nse to

the search for alternative dispute resolution processes. 1 then tum to a discussion of ADR

processes, their underlying premises and some of the critiques which have been offered of these

processes. Next, 1 tum to a consideration of how mediation is practiced at select tribunals and

agencies, and how mediated settlements are incorporated into the decision-making processes

there. The institutionaiization of mediation as part of a tribunal's processes c m o t be discussed

without understanding at the same tïme that tribunal's approach to party-settlement of the issues

before it. Bound together with the decision to provide mediation, and the specific f o m that

mediation takes, are a tribunal's policies with respect to settlernents, the degree to which it

encourages them, scrutinizes them, defers to them and relies on them. My exploration of

mediation is in a sense, therefore, only part of a larger therne, relating to the role of settlements in

the adjudicative process. Some of the discussion will, accordingIy, be as rnuch about settlements

in general, as about mediated settlements. 1 suggest various reasons why tribunals and agencies

will likely continue to rely on, and encourage, negotiated and mediated resolutions of disputes.

Some of these reasons are purely pragmatic, whereas others may reflect deeper shifis in attitudes

towards the administrative state.

1 will also explore how a reliance on negotiated solutions affects public policy

administration and development by tribunais, and consider the extent to which the two are

compatible or complernentary. As well, 1 am interested in how administrative structures

established for the resolution of disputes about, or enforcement of, certain statutory rights may

reflect collective decisions about distributive justice and corrective justice, and whcther

mediation processes are f a i t h l to these justice goals. Further, administrative law values of

opemess, transparency and participation in decision-making are discussed in the context of the

mediation of disputes, in order to consider how mediation may M e r these vaIues or at least not

detract fiom them.

Finally, given the allure of, and the increasing reliance on, alternative processes for the

resolution of administrative law disputes, it is important to attempt to formulate sorne principles

for their incorporation ùito the workings of tribun& in a way which is faithful to administrative

law values; in this last respect, 1 conclude with some tentative suggestions.

11 THE NATURE OF ADJUDICATION

it is not difficult to detect in speeches and in popular and academic comrnentary of recent

year, a disillusionment with the court system, and with Iegal systems in general- In the past

twenty years, this disillusionment has led many of the critics of the legal system to search for

alternative dispute resolution processes. In order to understand this search for alternatives, and

the proposais it has generated, it is important to explore the meaning and place of adjudication

within our society, and to understand the nature of the current discontent with adjudication.

What is adjudication? Theorists have approached this question through various

4

philosophical and analytical lenses, although most would probably agree that it is a form of

social ordering. As a form of social ordenng, it can be contrasted with other processes including

statutory enactment, administrative direction, contractual o r d e ~ g and custorni. Lon Fuller, in

his seminal article "The Foms and Limits of Adjudication"' approached the question as a matter

of form. To Fuller, the essential characteristic of adjudication was the mode of participation that

it accorded to the affected parties. In his conception (which should be recognized as reflecting a

paaicularly Anglo-American view of legal systems), adjudication is characterïzed by an

oppomuiiîy to present proofs and reasoned arguments to an impartial decision-maker. Aithough

Fuller emphasized the mode of participation in his analysis, he also makes it clear that

adjudication is premised on the application by an adjudicator of pre-existing noms; hence the

importance of the opportunity to present relevant proors and reasoned and relevant argument.

Participation is only meaningful where a litigant c m base his or her arguments and evidence on

the applicable principles. This mode of participation has an ef5ect on the type of issues which

corne to be decided through adjudication. Because the presentation of reasoned arguments

requires an assedon of principle? issues tried before an adjudicator tend to be based on claims of

right or accusations of guilt. Fuller posited that the limits of adjudication lay in it

inappropriateness (being normally based on daims of right or accusations of guilt) to decide

questions that are not easily or properly reducible to "rights" and "wrongs". Fuller asserted that

adjudication was ill-equipped, for example, to solve "polycentnc" problems, which he

lLon Fuller, "Mediation - Its Forms and Functions" ( 1 97 1) 44 S.Cal.L.Rev.305 at 307.

2(1 978) 92 Harvard L.Rev. 3 53.

characterized as those where a decision-maker is obliged to choose between a set of results all of

which may have complex repercussions extending beyond the directly affected parties. Its

naturai province is the d e c l d o n of the rights controlling the relationship between two parties -

the classic "bipolar" legal dispute.

Fuller suggested that when an attempt is made to deal by adjudicative forms with a

problem that is essentially polycenûic. three things can happen, sometimes d l at once: the

adjudicative soiution may fail because unexpected repercussions make the decision unworkable;

the adjudicator starts to ignore judicial proprieties; or, the problem may become reformuiated so

as to make it amenable to solution through adjudicative procedures. Fuller did not engage in

reductionism, however, and recognized that there are polycentric elements in almost al1 problerns

subrnitted to adjudication; for hun, it was a question of knowing when the polycentnc elements

have become so significant and predominant that the proper limits of adjudication have been

reached.

Although the paradigrnatic adjudicator is the judge, because Fuller focused on a

generalized mode of participation, his analysis extends to other forums which utilize the same

process, such as private arbitrations or administrative tribunals.

Another view of adjudication which informs this paper is that put fonvard by Owen Fiss.

Although Fiss writes specificdly of the courts and not of adjudication in generd terms, his view

of the important role of courts within the political system reflects a much more expansive view of

the possibilities of adjudication than does Fuller's3. Fiss rejects the "dispute resolution" mode1 of

3See, for example, Owen Fiss, "Social and PoliticaI Foundations of Adjudication" (1 982) 6 Law and Hum.Beh- 12 1.

adjudication in which tradition he would place Fuller. To him this mode1 is premised on the

reconciliûtion of private interests. The metaphor for this mode1 is the story of two people in the

state of nature who each claim a single piece of property. Reaching an impasse, they turn to a

third party, the stranger, to resolve their dispute. The courts are the institutionalization of this

stranger? Fiss fkds the universe described by this story to be "sociologicaily impoverished";

there are no social groups, nor are there public values or goals, only the private desires of

individualss. He also disagrees with the premise of the court's legitimacy which the story puts

foward. To the extent that the dispute resolution mode1 links legitimacy to consent (and Fiss

suggests that Fuller's account of adjudication, premised on the right of participation in the

process, represents a highly individualized form of consent) Fiss would instead base the

legitimacy of the courts on their place as a "coordinate source of govemmental power". As such,

the function of the courts is to give expression to the values embodied in collective legal texts

such as the Constitution. An important vehicle through which the courts exercise this power is

through "structural refom", by which Fiss rneans constitutional litigation aimed at achieving

broad-based social and political change6.

Finally, 1egal formalism also provides some important insights into the nature of

adjudication. Inspired by Aristotle, legal formaiists assert that there are two fundamental forms

41bid - Y at 122.

'm., at 122-23.

61t shouId be borne in mind that much of what Fiss writes is rooted in the American experience.

of justice: corrective justice and distributive justice7. Corrective justice involves the restoration

of balance as between a wrongdoer and sufferer, by restoring to the suf5erer what has been lost

througi the wrongdoing. It is based on the bipolar structure of the interaction between two

parties. Distributive justice, in contrast, requires three elements: a benefit or burden that is the

subject of the distribution, the recipients arnong whom the benefit or burden is to be disûibuted,

and the criterion according to which the distribution is to take place.

Three of the key assertions of legd formalism which will provide insight into the issues

to be discussed in this paper are: (a) adjudication is more the "discovery than the making of

law"'; (2) the "adjudication of private disputes can be rinderstood as the actualization of

corrective justice, and the legislative and administrative direction of the comrnunity as the

pursuit of distributive justicen9 and ( 3 ) law and politics are fùndamentally distinct: the two forms

of justice are stnicturally different and cannot be assimilated to each other; if the two operations

are mixed together, the result will achieve neither adequate corrective justice nor fidl distributive

justice.

While Fuller and Weinnb begin fiom very different perspectives, what they share, in my

view, is the observation that "mixing" different justice goals, or "matching" one form ofjustice

with an inappropriate mode of decision-making, will result in a perversion of the problem, the

outcome or of the process, to the detriment of either effective or just decision-making. A

'The following description of the tenets of legal formalism is taken from Ernest J. Weinrib, "Legal Formalism: On the Immanent Rationality of the Law" (1988) 97 Yale L.J. 949.

coroilary to this is the insight provided by Fuller's analysis that procedure, ie. a mode of

participation, can influence and even transfomi the substance of the issue before a decision-

rnaker,

III THE NATURE OF ADWSTRATIVE ADJUDICATION

1. What is administrative law

Since the focus of my thesis is administrative adjudication as a distinct breed of

adjudication, 1 turn now to a bnef exploration of the administrative law expenence in Canada.

Administrative law theory in Canada tends to focus on one of two themes: the legal regdation of

the activities of govemment oEcials by the courts, and the nature of these activities in

themselves. My interest is in the second of these two themes, and specifically, in the activities of

tribunals that perform adjudicative or quasi-adjudicative functions. To be more specific, my

interest is not in the substantive content of the work of these tribunais (ie. the law of human

rights, unmigration, labour relations, energy regulation and so on), but in how these tribunals

discharge their duties.

The administrative state, of course, encompasses much more than the tribunals and

agencies which rnake decisions under statute. Statutes can authonze decision-making by the

Cabinet, by Crown Corporations, govemment departments or even by some private bodies. But

there is a distinctive set of administrative bodies authorized by statute which tend to combine

9

elements of court processes with administrative decision-making, and it is with those that 1 am

concerned. Examples of these are the labour relations boards, human rights comrnissions and

tribunds, and regdatory agencies. Evans et al- characterize these agencies as having at least four

features in common. First, they enjoy a measure of independence fiom the govemment

department with overall responsibility for the policy area in which they operate; individual

members of these agencies also have a measure of independence in the disposition of individual

cases. Second, those affected by a decision are given an oppomioity to participate in the

decision-making process by producing evidence and making submissions. Third, these agencies

typically operate at the point of the administrative process where a public program is applied to

an individual, although some also operate at the level of policy-making. Fourth. al1 are

specialized in cornparison with the courts, although they may derive their jurisdiction f?om more

than one statute". For ease of reference, 1 shall refer to these bodies as administrative agencies

or tribunals.

What accounts for the existence of these administrative tribunals? It has been said that

the evolution of the Canadian administrative state has been ad hoc, with administrative agencies

created by governments as pragmatic responses to emerging problems over the years". The

earliest modem administrative agencies in Canada were created for economic regulation

''J.M. Evans, H.N. Janisch, David J. Mullan, R.C.B. Risk, Administrative Law: Cases. Text and Materials 4th ed. (Emond Montgomery: Toronto 1995), at 12- 13; the Ontario Labour Relations Board, for example, administers upwards of 15 statutes.

"Law Refonn Commission of Canada, Independent Administrative Agencies (Working Paper No. 25) (Ottawa: Law Reform Commission of Canada, 1980) at 17; Martha Jackman, "The Reallocation of Disputes fiom Courts to Administrative Agencies" in Rethinking Civil Justice: Research Studies for the Civil Justice Review, vo1.2 (Ontario Law Reforrn Commission: 1996) 347.

purposes, to separate decision-making in areas such as transportation and energy from politicians

and bureaucrats. in part, they provided a vehicle for governments to distance themselves fiom

potentially politically unpopular decisions. The labour boards, by contrat, were created to

remove decision-making in the area of labour relations fiom the courts. Tribunals could reflect

specialized viewpoints, such as the tri-partite labour relations tribunals, or incorponte scientific,

economic or other expertise. They also provided the means to deal with large volumes of

decisions within a structure that still provided due process, such as in the case of the social

regdatory agencieslz.

Though tribunais offer distinct procedural advantages to the court system, they should

nof for a number of reasons, be considered simply a parailel dispute resolution system to the

courts. To Harry Arthws, for instance, administrative Iaw was bom in the nineteenth century out

of the "moral imperatives of reform", and derived its legitirnacy fiom being the only effective

means to address certain social dangersi3. The modem administrative state has been described as

rising "fiorn the ashes of the depression ... founded upon dissatisfaction with and a distrust of

market outcornes on the one hand, and a rather simple faith in the effectiveness of goverment

"For descriptions of the evolution of and rationale for the creation of administrative tribunals in Canada see Law Refonn Commission of Canada, M., at 35-36; Margot Priest, "Fundamental Reforrns to the Ontario Administrative Justice System" in Rethinkins Civil Justice: Research Studies for the Civil Justice Review , vol.2(0ntario Law Reform Commission: 1996) 545; Margot Priest, "Structure and Accountability of Administrative Agencies" in Administrative Law: Principles. Practice and PIuralism (Special Lectures of the Law Society of Upper Canada, 1992) (Carswell: Toronto, 1993); Jackman, Ld.; and Murray Rankin, "Perspectives on the independence of Administrative Tribunals", (1 992-93) 6 C.J.A.L.P. 9 1.

13Harry W. Arthurs, "Jonah and the Whale: The Appearance, Disappearance, and Reappearance of Administrative Law" (1980) 30 U.T.L.J. 225.

intervention to alter such outcomes on the other.'" It is said that tribun& make policy, directly

or indirectly every dayts. Even for those tribunals whose sole or major function is adjudication,

it is said that they apply a "different normative system" to decide cases than that applied by the

courts. Some of the features of this normative system, according to Arthurs, are: an

understanding of iaw as a special legal vocabulary applicable only to a particular sector of

activity regulated by statute, as opposed to an understanding of law as general and universal; an

understanding of the collective aims of statute law as opposed tu an understanding of law as

grounded in individual rights; an understanding of law as part of a system of administration as

opposed to an andysis suited to the handling of individual, pathological problems16.

On a concrete level, in Canada, the special role of administrative tribunals is reinforced

and shaped by the provisions of section 96 of the Constitution Act. 1867. Section 96 has been

interpreted to require that where a province establishes a provincial administrative tribunal with

powen over mattee that were within the jurisdiction of the supenor courts at the tirne of

Codederation, the exercise of a judicial function by this tribunal must be part of a general

regdatory scheme enacted in M e r a n c e of a broader policy goal of the legislaturel'. The effect

of this is to 1 s t the extent to which provinces may simply transfer civil disputes from the courts

14Robert Howse, J. Robert S. Prichard and Michael J. Trebilcock, " SmalIer or Smarter Government" (1990) U.T.L.J. 498 at 522.

"Robert W. Macaulay, Q.C. and James L.H. Sprague, Practice and Procedure Before Administrative Tribunals (Carswell: Scarborough, 1997, iooseleaf).

I6Harry W. Arthurs, "Rethinking Administrative Law: A Slightly Dicey Business" (1979) 17 Osgoode Ha11 L.J. 1 , at 17 to 2 1; see aIso the introduction to J.M. Evans, supra note 10 at 28-3 1.

l'Re Residential Tenancies Act. 1979 [198 11 1 S.C.R. 7 14.

to tribunals, without a comprehensive regdatory regime in suppoa. This constitutional

constraint is a reality of the Canadian political-legal system which reinforces the distinctiveness

and normative characteristics of administrative law.

2. The distinctiveness of administrative adjudication

1 wish to retum now to the theones of adjudication set out earlier, and apply them to

administrative adjudication18. It seems clear that the categories and distinctions made by Fuller,

Weinrib and Fiss, represent a challenge to thinking about administrative adjudication, and that

administrative adjudication represents a challenge to some of their theones. Administrative

adjudication @y which 1 mean administrative decision-making which incorporates some of the

characteristics of court adjudication such as participation and independence) is a complex hybrid.

The problems before administrative tribunals are both bipolar in nature and polycentric. There

are elements of both corrective justice and distributive justice in the work done by these

tribun&. On one level, rnany of the issues which engage them look like they can fit easily into

the "dispute resolution" mode1 of adjudication described by Fiss; others reflect a "structural

reform" view of litigation.

Indeed, what is nost interesthg is not that al1 of these elements exist in the universe of

administrative adjudication; to an extent, the courts, the paradigm of the non-instnimentalist,

non-political adjudicator, increasingly face polycentric issues, structural reform lawsuits, and

IaSee text accompany supra notes 1-9.

issues of distributive justice. What rnay be most interesting about the adjudication done by

administrative tribunah is how fiequently one and the same dispute c m embody features of al1 of

these concepts. A human rights cornplaint, for instance, features a cornplainant who rnay want

redress for a wrong done, for instance, denial of employrnent. She rnay b ~ g the cornplaint

because she is seeking corrective justice. The human rights tribunal that decides the complaint

may, however, be faced with a theory of discrimination which requires an understandhg and

application of histoncai, public policy and sociological perspectives, and an abiiity to take

account of changing public values. In deciding an individual cornpiaint it rnay confront issues of

distributive justice whose determination will have ramifications far beyond the individual parties.

A union member who cornplains that her union has failed to represent her properly rnay view the

object of the legal process as obtaining a rernedy to compensate for the union's actions. The

tribunal that adjudicates this complaint will, however consider the actions which form the basis

of the cornplaint against the statutory scheme of collective bargaining which gives nse to the

duty fiom a union to its members, taking into account the intersection of collective responsibility

and individual nghts on which this duty rests.

In both of these cases, there is a public policy component to the adjudication which is

superimposed on the dispute between the parties. Making sense of both is a task which is

cornmon in administrative adjudication, and which gives it its distinctiveness as a branch of

adjudication. In a sense, tribuuals are engaged both in making law and in discovering law, in

smctural reform (or administration) and dispute resolution, and in deciding rnatters of corrective

justice and distributive justice. To assert this is not to deny the increasingly public law nature of

court-centred adjudication. It is simply that these dualities are inherent in the very core of

administrative adjudicatiodg. These duaiities will be of signifïcance when 1 turn to consider the

incorporation into administrative adjudication of mediation and settlement processes.

N CRITICISMS OF THE ADJUDICATIVE PROCESS

1. General critique

In order to understand much of the inspiration behind the modern-day ADR movement, it

is necessary to understand its links with criticisms of the adjudicative mode1 of decision-making.

In Canada and the United States, criticisms of the adjudicative process which are related to the

search for alternative dispute resolution processes tend to arise out of concerns with both the

efficiency and the equity of adjudicative procedures. It has been said that the ADR movement

developed in the US. in the 1960's and 1970's out of serious concems with court congestion,

excessive litigation delays and nsing legai costs." A major goal of the movement therefore was

the relief of court congestion, cost and delay. Yet there were also proponents of ADR who based

their critiques of the traditionai adjudicative process on equity concems. Judith Resnick, writing

about the United States, has suggested that "placing faith in lawyer-based, adjudicatory

IgEvidence of this duality and of the perpetual tension it produces, c m be found in the attempts by both courts and commentators to fix on an understanding of the nature of administrative tribunal appointments: are their members more Iike judges, or like public servants? See Re Hewat et al. And The Queen in Right of Ontario(1998) 37 O.R. (3d) 16 1 (O.C.A.).

20Alternative Dispute Resolution: A Canadian Perspective. A Canadian Bar Association Task Force Report (Canadian Bar Foundation: Ottawa, 1989). at 3; see also Stephen B. Goldberg, Eric D. Green and Frank E.A. Sander, Dispute Resolution (Little, Brown and Company: Toronto, 1985, Supp. 1987)(hereinafter Dispute ResoIution).

procedure makes some sense when there is a shared perception that the adversaries have the

abiiity to cornpete", but that the "entry of impoverished litigants into the federal courts ... made

problematic the process-based rights announced by the Court and the values of the Federal

Rules" ." There is a perception that the fiamework of the adjudicatory system (the traditional

d e s of civil procedure) has "provided too rnany opportunities for exploitation and manipulation

and too Iittle guidance for the untutored"." For these and other reasons, there has been a

declining interest in traditional adjudication in the U.S., and an increase in enthusiasm for more

streamlined and informal procedures, more interventionist judging, and alternative dispute

resolution procedures.

In Canada as well, the cal1 for alternatives to adjudication has been fueled by the

perceived inefficiency of the Iegal system. As with the Arnerican commentators, at one level, the

concem is with the time and cost required to obtain an adjudicated result? The concem over

time and cost is sometimes linked to a perception of inequality of access, as the complexity and

"Judith Resnik, "Failing Faith: Adjudicatory Procedure in Decline" (1986) 53 U. Chicago L.Rev. 494, at 509-5 10 (hereinafter Judith Resnik, " Failing Faith").

at 529. Support for the idea that procedural rules can be manipulated not only on a case-by- case basis, but over the long-mn, in favour of more powerful and sophisticated litigants can be found in Marc Galanter, "Why the "Haves" Corne out Ahead: Speculations on the Limits o f Legal Change", (1974) 9 Law & Soc, Rev.95, where he theorizes that the structural passivity and overload endemic to the civil justice system works in favour of the "repeat player" litigant who can adapt its strategies in individual cases to maximize its position over a series of cases. See aIso Curie Menkel-Meadow, "Whose Dispute 1s It Anyway?: A Philosophical and Democratic Defense of Settlement (in Some Cases)" ( 1 995)83 Ge0.L.J. 2663, where she states (at 2688) that it is ironic that one of the consequences of the Due Process revolution has been the growing expense, complexity, and formality of hearings that have made some forrns of adjudicative and administrative justice more expensive and remote to wouId-be claimants.

T h e Honourable Mr. Justice George W. Adams and Naomi L. Bussin, "Alternative Dispute Resolution and Canadian Courts: A Time for Change" , Paper prepared for presentation at the Corne11 Lectures, Ithaca, New York (1994), at 9- 10.

cost of court proceedings presents a barrier to its effective use by less well-endowed litigants or

would-be litigant~.'~ Advocates of alternative dispute resolution methods also suggest that the

traditional mode1 of adjudication is simply inadequate in many cases in delivering on its promise

of providing justice, and that there may be other processes that are able to corne closer to this

promise. It has been argued for instance, that litigated outcomes which produce bïnary win-lose

results often do not capture the "jwt realityn2* in a complex and ambiguous world. With their

polarized decision-making and limited range of remedies, the courts are often unable to address

the underlying needs and interests of litigants, which have been necessarily shaped to conform to

the demands of the legal system?

Finally, there is also a critique of adjudication which focuses on its incapacity to provide

personal satisfaction to its participants. Among other things. it is said that litigants feel a loss of

control over their dispute when they enter the legal realm. The transformation of disputes into

legal issues results in the estrangement of the client: "sornehow the burning issue which

originally belonged to the disputants, both intellectually and emotionally, becomes detached

'4Alternative Dispute Resolution: A Canadian Perspective, suma, note 4 at 3. Also see Julie Macfarlane, "The Mediation AlternativeM, in Julie Macfarlane, ed., Rethinking Disputes: The Mediation Alternative (Emond Montgomery: Toronto, 1997).

=Menkel-Meadow, "Whose Dispute 1s It Anyway?"supraZ note22 at 2674. In this part of her article, Menkel-Meadow draws on the work of John E. Coons, for exarnple, in "Compromise as Precise Justice", in I. Roland Pennock & John W. Chapman eds., Compromise in Ethics. Law and Politics ( Nomos.21) (New York: New York University Press, 1979), wlio argues that nonbinary solutions may represent more "precise justice" when there is factual doubt or conflicting policies.

'%ee Fuller, supra note 2 on how the nature of a dispute can be altered to suit the adjudicative process. As well, see William L.F.Felstiner, Richard L-Abel and Austin Sarat, "The Emergence and Transformation of Disputes: Naming, Blaming, Claiming ..."( 198 1) 15 Law and Soc.Rev. 63 1 on how the courts as a dispute resolution system transform the content of grievances through the application of its substantive and procedural noms.

from them on both levels once it is placed in the hands of the legal ~ystern"'~.

2. Critiques of administrative adjudication

As with court adjudication, administrative adjudication has not been without its critics.

One strain of criticisms reflects the same efficiency theme that has Gsen in cornmentaries about

court processes. Xt is said that administrative agencies increasingly act with undue fomality,

complexity, expense and delay. Often, this assertion rests on the premise that the formality of

tribunal proceedings is at odds with the original purpose of these tribunals, which was to provide

inexpensive and expeditious justice. Commentators have identified the l'judicialization" of

administrative procedures (fostered in Ontario by a combination of the imposition of the

Statutory Powers Procedure ActZg, a code of minimum procedures modeled on court-like

proceedings; judicial review decisions; and tribunal cautiousness) as an unfortunate trend ieading

tribunds away fkom their original purposes and presumed advantagesZ9. In Ontario, a recent

govemment commission reporting on agency refom identified the goal of procedural reform as

being the achievement of a "faster, sirnpler and more cost-effective" dispute resolution system,

consistent with the need for which agencies were originally created, that is, to provide a forum

27MacfarIane, supra note 24 at S.

"See, for instance, Jackrnan, supra note 1 1; David J. Mullan, "The Future of Canadian Administrative Law" (1991) 16 Queen's L.J. 77; David 5. MulIan, Book Review of H.W. Arthurs, Without the Law: Administrative Justice and Legal Pluralism in Nineteenth-Centurv England (University of Toronto Press: Toronto 1985), in (1987) 12 Queen1s L.J. 106; Rosalie Silberman Abella, "Canadian Administrative Tribunals: Towards Judicialization or Dejudicialization?" ( 1 988-89) 2 C.J,A.L.P. 1.

that is "more specialized, less costly and easier to use than the courts."30 The Report of the

Commission highlights with approval a quote Gom an agency user stating that "[tlhe focus of

(agencies) should be to have timely, quality decision-making, thereby reducing the need for court

action. "31

To an extent, therefore, the increased interest in the incorporation of mediation into

tribunal processes derives fiom the same source as with the courts: dissatisfaction with

adjudication. Advocates of the use of ADR by tribunais convey concems with the increasing

complexity and inaccessibility of tribunal processes, attendant delays, costs? needless

adversariakm and its widlose solutions3'. Commentators also cite the pragmatic search for

lower-cost processes in an age of shrinking tribunal resources, and for more efficient processes

with which to deal with Large volumes of cases". In addition the benefits of mediation are also

cited: its ability to provide for reconciliation where there is an ongoing relationship between the

party litigants; its ability to address the parties' underlying interests, which may or rnay not relate

to matters within the tribunal's jwisdiction; greater participant satisfaction with the process; its

"Agency Refom Commission, Excellence in Administrative Justice: Deliverine Better Service: A Consultation on Reform of Ontario's Reerilatorv and Adiudicative Aeencies (Background Paper: Improving Tribunal Hearing Procedures) (Queen's Printer: Toronto, September 1997) at 2; Agency Reform Commission, Evervdav Justice: Report of the Agencv Refonn Commission on Ontario's Regulatorv & Adiudicative Agencies (Queen' Printer: Toronto, April 1998) at 3.

321~dith McCormack and Stan Lanyon, "Alternative Dispute Resolution in Labour Relations: A Tale of Two Provinces" in Rethinking Dis~utes: The Mediation Aiternative , supra note 24, at 88-89.

33u.; see also Andromache Karakatsanis, "Problem-Solving with ADR: The Tribunal Perspective1' (1995-96)9 C.I.A.L.P. 125 and Mark Bourrie, "Human rights commission mediates away case backlog" (1998)4 Workplace News 12.

recognition of the parties' "ownership" of their dispute and responsibility for its r e s~ lu t ion~~ .

What is interesting about these critiques of administrative adjudication and the

accompanying enthusiasm for ADR is the extent to which they cut across diverse ideological

perspectives. T 'ose writing from within tribunals generaily view ADR as an important

complement to their ability to continue to cary out statutory and public policy mandates with

finite resources. It is also possible to view some of the enthusiasm for ADR, particularly outside

the trïbunals, as consistent with a narrower conception of the role of tribunals in Canadian [Xe,

consistent with the "dispute resolution story" of adjudication which minimizes the public policy

component of tribunal work. In this perspective. ADR and other procedurai reforms which

increase the efficiency of tribunal processes serve the important purpose of minimizing the

intervention of tribunals into the marketplace OF private activity.

V THE ALTERNATIVES TO ADJUDICATION

What, then, is meant by ADR? Usually. the terrn "alternative dispute resolution" is

applied to those processes by which disputes are resolved without recourse to adjudication.

Aithough some would include the process of private arbitration in the collection of P 3 R

rnechani~rns~~, 1 will use "alternative dispute resolution" to refer to those processes which do not

substantially conform to Fuller's mode1 of the presentation of "proofs and reasoned arguments" to

34McCormack and Lanyon; Karakatsanis, M.

351ndeed, for historically defensible reasons, some might aiso characterize the whoIe field of administrative adjudication as "alternative".

an impartial arbitei6. Further, although there is a great varïety in dispute resolution processes

apart nom adjudication, ranging fkom "early neutrai evaiuation" (the pre-triai conference), to

"rned-arb" (in which mediation is combined with arbitration), to fact-finding, to ombudspersons,

much of the literature focuses on mediation as the primary alternative process. Many of the calls

for reform of both court and tribunal processes in the narne of ADR tend to focus on how to

incorporate or provide institutional encouragement to mediation as an alternative to adjudication.

Mediation can be defined as "facilitated negotiation", that is, negotiation which is aided

by the presence of a neutral third party, and this will serve as a working d e f ~ t i o n for the

purposes of this thesis. Goldberg et al. describe mediation as the "least intrusive form of W d -

party involvernent in a dispute. The mediator, in contrast to the judge or arbitrator. has no power

to impose an outcome on disputing parties. Rather. the mediator's iiuiction is that of assisting the

parties to reach their own agree~nent."~' It has been said that the "essence of mediation is in

&ect to be able to create the conditions under which the parties (or on occasion their

representatives) will conclude a successful negotiation"?

It has also been said that the essence of mediation lies in its focus on "interests" as

opposed to "right~"'~. Related to this is what is termed the "problem-solving" approach to

mediation. In applying this approach to the resolution of legal disputes, the focus is on

iden-ing the goals and needs of the litigants. Accompanying this approach are at least three

3 6 S ~ ~ r a , note 2 at 364.

37Disp~te Resolution, supra, note 20, at 9 1 .

3gMacfalane, supra note 24, at 3.

391bid.

assumptions. First, the interests which are uncovered and identified in thÏs process may be

entirely different fiom those which are recognized by the Iegal system. Disputants may be

brought together because of a grievance which has prompted the taking of legal action; mediation

seeks to put aside the issues in the legal action (the "rights"), in order to determine what gave rise

to the grievance at its genesis. To the extent that legal rights may play a role in mediation, they

are simply one of a range of different "interests" which the parties are fiee to give weight to,

accept or reject as they wish. Second, in order to be able to fashion "win-win" solutions out of

what may have seemed like a classic "win-lose" litigation outcome, it is important that the

litigants broaden the range of interests capable of being traded, beyond those which are apparent

in the legal dispute. It has been said that

the principle underlying such an approach is that unearthing a greater nurnber of the

acnial needs of the parties will create more possible solutions because not al1 needs will

be mutuaüy exclusive. As a corollary, because not all individuals value the same things

in the sarne way, the exploitation of differential or cornplernentary needs will produce a

wider variety of solutions which more closely meet the parties' needs."

Third, to the extent that legal rights recede into the background, what takes centre-stage

are the self-identified interests of the parties. As touched upon earlier in this paper, mediation is

based on the ethos of self-determination; it elevates private ordering as the predominant route to

the resolution of Iegal disputes. The noms goveming the outcome of mediation are not legal

noms, but those that the parties choose.

The clairned advantages of rnediation over adjudication fall roughly into two categones,

40Carrie Menkel-Meadow, "Toward Another View of Legal Negotiation: The Structure of Probtem Solving" (I984)3 1 UCLA L. Rev. 754 at 795.

those which relate to process (efficiency, access and quality of participation) and those which

relate to substance (quitlity of outcome and furtherance of societal goals). It is said that

rnediation is faster and less expensive than full-scale adjudication4', and thus, more accessible.

Fwther, to the extent that an inequality of resources may impede titigants in pursuing their Legai

claims to their fullest, in negotiation and mediation theory, it has been said that an inequality of

resources does not translate directly into greater negotiating power; rather, to use a phrase

common amongst these theories, the source of negotiating power lies in a party's "best alternative

to a negotiated agreement" (BATNA) which may or may not be linked to economic resources.

Essentially, this describes the strength of a party's alternatives to mediation, which c m include

adjudication, public carnpaigns or pnvate rneasures'".

It is also said that settlements are more satiseing to the participants than adjudication.

The source of participant satisfaction is attributed in large part to the openness of mediation to

permitting the participants free reign to define both their problems (interests) and their solutions.

This is contrasted with the adjudicative process where gnevances may have to be transformed

into known legal categories with win-loss outcomes in order to achieve resolution. Mediation is

also linked to a more complete resolution Sian can be achieved through adjudication. Parties are

urged to identiQ ways to meet their real needs and interests by broadening the issues for "trade"

or resolution; in this way, partiesf interests can actually be achieved without having to "give

4'Dis~ute Resolution, supra, note 20, at 92.

42See, for instance, Eiaine Smith, "Danger - inequality of Resources Present: Can the Environmental Mediation Process Provide an Effective Answer?". Cl9961 J. of Disp. Res. (No.2) 379; the obvious question, of course, is whether the strength of a party's BATNA depends precisely on his or her depth of resources.

something up"".

Sorne advocates of mediation argue for the societal benefits of compromises. It is said

that where compromise occurs in the sense that certain issues or interests are "given up" for the

purposes of resolution, it can often be justified on moral, political and philosophical grounds and

may be more satisfactory to the parties and "better" for the legitimacy of the legal system. Carrie

Menkel-Meadow states: "a 'split-the-differencel compromise actually connotes a certain moral

Iegitirnacy or recognition of 'equality' by the parties. If the parties had rationai. principled, or

moral reasons, or enough brute strength (including economic resources) to win a dispute, why

would they accede 'hdf to the other side unless the settlement recognized some equal rationai,

principled, moral, or power-based reason for doing so?""

Further, mediation offers the possibility of expanding the range of principles brought to

bear on the resolution of disputes. Menkel-Meadow argues that settlements rnay "draw o u .

attention to the importance of other, nonlegal. principles that affect decisionmaking and govem

human behavior ...p eople and entities in disputes rnay have a wide variety of interests (of which

legal principles may be one class) and may decide that, in any given cases, social. psychological,

economic, political, moral or religious principles should govem the resolution of their dispute.

This does not mean that such dispute resolution is not principled - it is just not law-prin~ipled"~'.

Finally, it is said that mediation serves to fiuther the important societal value of

individual autonomy. Menkel-Meadow suggests that consensud resolution through settlement

- - - - - -

43Menkel-Meadow, "Whose Dispute 1s it Anyway?", supra note 22 at 2672-73.

"Tbid., at 2673.

451bid., - at 2677.

may better reflect the goals of democratic and party-initiated legal regimes by allowing the

parties themselves to choose processes and outcornes for dispute r e s~ lu t i on~~ .

In considerhg the place of mediative pro cesses in administrative decision-making, what

must be assessed is the extent to which mediation, both in theory and in practice, supports the

goals of administrative law. If a goal of an administrative structure is to provide a quicker and

cheaper alternative dispute resolution process to the courts, for instance, then the efficiency

promises of mediation are important as a support tc an effective dispute resolution system.

Whether these promises are redized in practice, and whether they may be realized at the cost of

other goals, or only under certain conditions. is a critical issue. Where an administrative

structure reflects attempts to realize broad collectively-established ideals, the extent to which

mediation is supportive of this is not always apparent. Is it compatible, for instance. with human

rights legislation, to encourage parties to negotiate on the noms to be applied to the resolution of

their dispute? 1s it desirable in a regime based on state-enforcement of statutory rights (such as

employment standards Iegislation) to re-establish private-ordering through mediation as the

predominant means of detemiining those rights? These are some of the questions that I hope to

consider in exploring the place of mediation in administrative law.

vI THE CRITIQUES OF ADR

The growth of the ADR movement has been paralleled by concems about the proper role

46m note 6 at 2692.

of ADR withui the adjudicative system. The critiques of ADR raise issues which are worthy of

attention for those interested in incorporating ADR processes into administrative adjudication. I

have categorized the critiques of ADR into those which:

a. question the empirical basis of the daims made by ADR proponents:

b. i d e n w dangers in ADR processes arising out of the lack of procedural safeguards

associated with more formal legal processes;

c, find absent in ADR theory a bais for evaluating the quality of its outcornes; and

d. link critiques of ADR with broader theories about the place of adjudication in a

democratic society.

(a) Some authors and commentators are simpl y unconvinced that ADR practice (and in

particular, mediation)has been shown to live up to its theory. There have been numerous studies

which have sought, for instance, to measure the daim that ADR contributes to the efficiency of

adjudicative processes. A recent evaluation of a pilot ADR project in Ontario concluded that

ADR provided a cheaper and faster result for participants, particularly in encouraging earlier

settlementJ7. Other studies have been less conclusive. leading some to the view that a solid

empiricai foundation is lacking for the efficiency claims of ADR proponentsJ8. The lesson, 1

47Julie Macfarlane, Court-Based Mediation for CiviI Cases: An Evaluation of the Ontario Court {General Division) ADR Centre (November 1995), cited in Civil Justice Review, Su~plementai and Final R e ~ o r t (Civil Justice Review: November, 1996) at 52.

48 See, for instance, the studies cited in Marc GaIanter and Mia Cahill, "'Most Cases Settle': Judicial Promotion and Reguiation of Settlements" (1994) 46 Stanf.L.Rev. 1339 (a survey of empirical literature on judiciaI promotion of settlernent and ADR, hereinafter referred to as Galanter and Cahill, "Most Cases Settle"), at 1364-7 1; Marc Gaianter, "Redesigning the Iceberg: Reforming A Largely Uncharted and Ever-changing Civil Justice System", Commentary on R.A. Macdonald Studv Paoer on Pros~ects for Civil Justice(0ntario Law Reform Commission: Toronto, 1995)2 13; in the materiais for a recent conference on ADR, "Administrative Tribunals and A D R (Osgoode Hall Law School of York

suggest, is that the efficiency of ADR processes c m only be adequately measured by an

institution within the context of its own goals for ADR. 1s the goal, for instance, the reduction of

caseload, the earlier settlement of disputes, or simply the reduction of hearing time for those

disputes which will require adjudication in any event? Further, efficiency must be measured on a

comparative scale. Where there are substantial incentives to party-settlement in any event, to

what extent does the institutionaiization of ADR add to a tribunal's settlement processes?

It is even more difKcuit to assess the qualitative cfaims of ADR, than its eficiency

claims. Many of the advantages put fonvard by ADR proponents as to the richness- the

flexibility and the openness o f its processes are alluring. Yet there is little evidence upon which

one can assess whether the reality lives up to these ideals. One author concluded that although

there was not much of it, the empirical studies of legal negotiating behavior have been what she

termed "depressingly consistent" in their record of actual negotiations which bore little

resemblance to the more nuanced discussions of goals and means found in the theoretical

Literature. Observers of negotiation processes found M e problem-solving behavior, a tendency

to monetize disputes, and outcornes which were predicated more on contextual and relational

factors between the parties than either legal endowments or other principles. Similar results were

found in the observation of party negotiating behavior during mediatiod9. Some authors have

also questioned the claim that settlement provides a greater sense of satisfaction to the parties

Universis; June 15, 1998), the authors state that there is very IittIe empirical evidence that ADR leads to faster resolutions o f disputes.

49Carrie Menkel-Meadow, "Lawyer Negotiations: Theories and Realities - What We Leam From Mediation", (1993)56 Mod. L.Rev. 361 at 369. See also some of the studies cited in Galanter and CahilI, "Most Cases Settle", Kd., at 1374-77, and David Luban, "Bargaining and Compromise: Recent Work on Negotiation and Informal Justice", (1985)14 Phil. & Public Aff.397, at 400-40 1 .

than adjudicated outcomessO.

(b) Some critics of ADR decry the move towards informalism in justice-provision,

asserting that it tends to favour the advantaged. Recapitulating this argument, Joel Handler

... As compared to the idealized version of the d e of law, where parties have equal access

and the COLU$ applies neutral rules evenhandedly, it is argued that discretion aliows for the

bargaining away of publicly defmed normative standards and may further disadvantage

the weak and the powerless. Without regulation, for example, negotiated resolutions will

fall short of substantive goals; without procedural protections and the applicability of

substantive rights, the poor and weak will be even more victimized by employers,

landlords, merchants and bureaucrats. Bargaining takes place within a normative

fiamework. How are the niles to be maintained? If one party can exploit the d e s , there

will be an unfitir advantagesl.

In a specific variation on this theme of informalism, one study focused on the relative

ability of informal and formal methods of dispute resolution to prevent racial prejudice fiom

tainting a process. While acknowledging that judicial proceedings by no means perfectly exclude

'"Galanter and Cahill, "Most Cases Settie", ibid., at 1353 to 59. The authors cite a number of studies which have arrived at conflicting results; the impression left is that much depends on the type of process under consideration. Also see text accompanying note 59, on whether participant satisfaction is a valid measure of quality ADR processes.

''Joef HandIer, "Discretion, Power, Quiescence, and Trust" in Keith Hawkins ed., The Uses of Discretion (Clarendon Press: Oxford, 1992), at 333; see also Richard Abel, "The Contradictions of Informa1 Justice", in Richard Abel ed., The Politics of Informa1 Justice; Volume 1 : The American Ex~erience (Acadernic Press: New York, 1982): "If infomalism grants additional offensive weapons to those already endowed with disproportionate legal resources while depriving the legally disadvantaged of the protection of formal defenses, it ako denies the latter the sword of formality while assuring the former that they can continue to invoke formality as a shieidu(297) and Owen Fiss, "Against Settlement", (1984)93 Yale L.J. 1093: "There is ... a critical difference between a process like settlement, which is based on bargaining and accepts inequalities of wealth as an integral and legitimate component of the process, and a process like judgrnent, which knowingly struggles against those inequalitiesl'.(l 078)

prejudice, Delgado et ai. suggest (based on social science research into the nature and causes of

prejudice) that the "human propensity to prejudge and make irrational categonzations is ... checked

by procedural safeguards found in an adversarial ~ystern"~~. Based on their review of the social

science research suggesting the types of situations most likely to permit the expression of

prejudice, they conclude, arnong other things, that minorities and rnembers of other "out-groups"

shouid opt for fomal in-court adjudication in situations where they codkont a person or

institution of high status and power. They recommend that ADR be reserved for cases in which

parties of comparable power and status confiont each otheP3. The authors also recornmend that

great care must be taken in designing ADR systems when the issue to be resolved touches a

sensitive or intimate area of life, such as many landlord-tenant, inter-neighbour and intra-familial

disputes, since this is also an area which poses heightened risks of ~rejudice'~.

The disquiet with the absence of procedural safeguards extends in particular to ADR

processes where adjudicators are empowered to act inforrnally as mediators, or situations where

mediation is made mandatory In these situations, the fear is that the cloak of formal office (either

as a judge or a public official) can be invoked inforrnally and in subtie ways without the

constraints of the procedural safeyards associated with the adjudicative process. Judith Resnik,

for instance, writing in part about the phenornenon of "managerial judging", expresses an unease

about approaches to dispute resolution processes that slide over the problem of constraint. As

Delgado, Chris Dunn, Pamela Brown, Helena Lee and David Hubbert, "Fairness and Forrnality: Minimizing the Risk of Prejudice in Alternative Dispute Resolution" (1985) Wisc. L. Rev. 1359 at 1389.

imperfect as adjudication is, for her it at least offers decisionmaking by govenunent empowered

hdividuals who have some accountability both to the immediate recipients of the decisions and to

the public at large, and a theory of its own limits, of what counts as pennissible and impermissible

adjudicationss. Others have expressed concern with mandatory ADR processes for the same

reasons, viewing private informal procedures which enjoy the authority of the court but without

the procedural safeguards of adjudication as carrying the risk of unregulated coercion or

manipulation by settlement

(c) A number of wrïters have grappled with the problem of finding ways to evaluate the

quality of ADR outcornes. To the extent that an interest-based dispute resolution process such as

mediation is based on the ethos of self-determination, it has been said that it is difficult to impose

extemal criteria of quality in relation to the outcome of the disputes. Julie Macfarlane writes:

"[slince participants in mediation do not buy into a public process claiming to represent collective

standards, judgments about whether the outcome k v a s worth the tirne and effort, or if the result

was acceptable and "fair" (in light of either Iegal standards or objective cntena developed by the

SS.J~dith Resnik, "Failing Faith", supra note 2 1 at 545.

"Nigel Fricker and Janet Walker, "Alternative Dispute Resolution - State Responsibility or Second Best", (1994)13 Civ.Just.Q. 29; see aIso Richard Ingieby, "Court Sponsored Mediation: The Case Against Mandatory Participation", (1993)56 Mod.L.Rev. 441 (a study based on the author's empirical observations of numerous alternative dispute resoiution sessions in three court systems in Australia); Marc Galanter, in "Redesigning the Iceberg", supra note 48 posits that "as more cases settle, it means that in a large and increasing number of instances it is the signalling function of the courts rather than the direct decisional fiinction that is dispositive .... The signals that influence disputing consist not only of the niles ... but information about al1 the costs, delays and risks connected with pursuing or defending a claim", He states that "how these signals are used and combined is largely out of the control of the upper courts and legislatures": 2 14-2 15.

parties themselves), seem to be for them alone"".

Proponents of mediation, therefore, do not usually make claims that the outcomes of

mediation can or ought to be measured against extemal criteria of justice5'. Rather. as suggested

by the above quote, it may be that the only possible measure is participant satisfaction. To critics

of ADR, participant satisfaction is an hadequate and slippery measure of just outcomes however.

David Luban, for instance, states that because of: (a) externalit). problems (the ability of ADR

participants to reach an agreement by passing on the costs to an absent third party); (b) "adaptive

preference fornation" (lawyers and mediators illegitimately lowenng the expectations of clients

in order to produce agreements); (c) distributional insensitivity (inequality of satisfaction in

outcome as between the parties) and (d) information poverty, participant satisfaction is an

untenable way to measure the quality of ADR processesS9.

If it is tme that it is difficult to assess the quality of ADR outcomes against an objective

standard, this may lead to an insight on the nature of ADR justice. To the extent that this implies

that the most one can do is to ensure the fairness of the process, then mediation rnay be an

example of what John Rawls calls "pure procedural justice": what is just is simpiy what the

parties have agreed to after a fair process6*. Even if the bargainhg power (or, to use the language

note 24 at 19-20.

58A1though it is important to bear in mind the suggestion by Carrie Menkel-Meadow that rnediation rnay be ordered on principles which are not necessarily legal principles, but are derived from social, psychoIogical, economic, political, morai or religious standards: see text accompany note 45 above.

59David Luban "The Quality of Justice", (1989) 66 l3en.U. L. Rev. 381.

'jOJohn Rawls, A Theow of Justice, (Cambridge, Mass: Belknap Press of Harvard University Press, 1971) at 86.

of bargaining theory, the "BATNA") of the parties is radicaily unequal at the outset and one party

is able to extract rnany more benefits and concessions from the process as a result, the outcome

may well be considered, on this measure, as "just". 1 suggest that this is a rather lean view of

justice in any context. Even accepting this notion of justice, it may be as difficult to assess the

faimess of mediation processes as it is their outcornes in many cases, since they are by their nature

informal and flexible. Further, if one views administrative law as the expression of collective

values (or, to be more precise, certain administrative Iaw regimes as attempts to realize collective

values), then this notion of justice may simply not be good enough.

(d) Finally, there are those who view the ADR debate as part of a broader discussion

about the role of adjudication in a democratic state. Perhaps the most trenchant critique of ADR

in this group is contained in "Against Settlement", an essay by Owen Fiss based on a speech given

to a jouit session of the Civil Procedure and Alternative Dispute Resolution Sections of the

American Association of Law Schools in l98@'. To Fiss, the proponents of increased reliance on

ADR in civil justice view adjudication in essentially private terms, where the purpose of lawsuits

and the civil courts is to resolve disputes. He, on the other hand, sees adjudication in more public

terms6'. To Fiss,

[aldjudication uses public resources. and employs not strangers chosen by the parties but

public officials chosen by a process in which the public participates. These officials, like

members of the legislative and executive branches, possess a power that has been defioed

and conferred by public law, not by pnvate agreement. Their job is not to maximize the

6 1 S ~ ~ r a , note 5 1.

"j2See also the text accompanying notes 3-6 above.

ends of private parties, nor simply to secure the peace, but to explicate and give force to

the values embodied in authoritative text such as the Constitution and statutes: to interpret

those values and to bnng reality into accord with them. This duty is not discharged when

the parties settle .... To be against settlement is not to urge that parties be "forced" to

litigate ...[ but] only to suggest that when the parties settle, society gets less than what

appean, and for a pnce it does not know it is paying. Parties might settle while leavhg

justice undone .... Although the parties are prepared to live under the terms they bargained

for, and although such peaceful coexistence may be a necessary precondition of justice,

and itself a state of affairs to be valued. it is not justice itself. To sertle for sornething

means to accept less than some ideal"-

Because of these views, Fiss does not view with favour the enthusiasm for ADR and the

active promotion of settlement of civil suits through negotiation or mediation. To him, settlement

is simply a technique for streamlhing dockets; like plea bargaining, it is a "capitulation to the

conditions of mass society"?

Others have argued that adjudication produces public goods, a role which is undemiùied

by settlements. Beyond resolving disputes. the couas also produce rules and precedents.

Settlements, like private adjudications, produce no rules or precedents binding on nonparties; as

such, they cannot fidfil the important role of public adjudication in providing order and certain@

for future 1 i t i g a . t ~ ~ ~ . To Lon Fuller, for instance, the administration of laws is a matter for

63Su~ra, note 51 at 1085-86; Fiss acknowledges that his view o f lawsuits may States (he is an advocate of using the courts to achieve what he terms "structural issues such as desegregation).

be unique to the United transformation", ie., on

aSee the discussion in David Luban, "Settlements and the Erosion of the Public ReaIm", (1995)83 Geo. L.J. 2619, at 2622-23; see aIso Michael Trebilcock, "An Ecoimnic Perspective on Access to Civil Justice", Commentxy on R.A. Macdonald, Studv Paper on Prospects for Civil Justice (Ontario Law Reforrn Commission: Toronto, 1995).

adjudication and not for mediation: he States that "[a] pervasive use of mediation could here

obliterate the essential guideposts and boundary markers men need in onenting their actions

toward one another and could end by producing a situation in which no one could know precisely

where he stood or how he might get where he wanted to be. As between black and white, gray

may sometirnes seem an acceptable compromise, but there are circumstances in which it is

essential to work hard toward keeping thuigs black and white. Maintaining a legal system in

fünctioning order is one of those occasion^."^^

FinalIy, it has also been suggested that there may be an ideological dimension to the

ADWadjudication debate. Judith Resnik writes:

We must understand that conversations about procedure are often used as vehicles for

many other conversations that are difficult to have in a straightforward mamer.---In short,

some of the current vogue for complaining about overuse of the courts and of procedural

excesses masks an important, value-laden debate about individual rights and the roie of the

judiciary in this society. In the current surge of concem about procedural innovation, we

must sort out which suggestions are put forth in an effort to limit judicial power and which

are made in an effort to enhance the judicial f un~ t ion .~~

The critiques of ADR reflect more than simply an academic debate. They are of vital

concem to persons affiliated with any adjudicative body, and to those interested in the quality of

%h~ra, note 1 at 328.

67Judith Resnik, "FaiIing Faith", supra note 21 at 555-56.

justice systems. For adjudicators, it must be recognized that settiement processes do not exist in a

pardlel universe to adjudication procedures. This is regardless of whether a court or tribunal

institutes a system of mediation or provides other official encouragement to negotiated

settlements of disputes. it has been pointed out by some authors that litigation and negotiation are

not really distinct processes at dl , but inseparably entwined: the "two faces of a single process of

strategic maneuvering and bargaining in the (actual or threatened) presence of the adjudicative

f ~ n i m " ~ ~ . In reality, "courts do more than adjudicate. They preside over a cluster of dispute

processes. They project rnodels, sanctions, bargaining chips, categories, and doctrine that support

processes of negotiation, mediation, and arbitration, some within the precincts of the courts and

some at a distance"69.

Thus, even when an adjudicative structure does not have a systematic mediation process or

other institutiondized encouragements to settlement, there are a mynad of ways in which its

doctrines, conventions, rules and practices affect the process of settlement. To the extent that any

adjudicative process is necessarily entwined with a negotiation and settlement process, it may be

difficult to assert that adjudicative bodies need not concem themselves with the quality of

negotiation processes or outcomes. If settlement efforts are largely driven by the prohibitive costs

of seeking an adjudicated solution, or prompted by an inordinate delay in reaching a hearing, to

what extent do these factors have a differential impact on the parties to the dispute? If it is clear

that they generally exert greater pressure on a certain kind of party (individual litigants; poor

68Galanter and CahilI, supra note 48 at 1389-

69m., at 1390.

people; benefit claimants; public interest groups), and therefore generate persistently more

favourable BAT NA'S"^^ to those opposing them, then seeking ways to minimize or neutralize

these factors ought to be considered as part of the responsibility for "justice" provided by these

adjudicative bodies.

Responsibility for ensuring the quality of mediation and settlement processes becocxs

more evident when an adjudicative structure actively encourages settlement efforts through such

measures as systematic or mandatory mediation. By taking such measures, it signals that

settlements are as viable, valuable and worthy outcomes of a litigation process as adjudicated

resolutions. It should also be recognized that the promotion of settlements often serves systemic

or administrative goais. The Ontario Human Rights Commission, for example, recently instituted

a systematic mediation process whose goal was clearly much about reducing its burden of

backlogged cases7! The application of widespread mediation to employment standards appeals

by the Ontario Labour Relations Board was prompted in part by the exigencies of assumulg

jurisdiction over this significant area of responsibility without receiving accompanying additional

resources?

In sum, 1 suggest that whenever there are inducernents, pressures or encouragements

present in an adjudicative system supporting the negotiated resolution of disputes before it, that

system cannot be indifferent to the results produced. This is not to suggest that courts and

'OSee text accompanying note 42 above.

"Ontario Human Rights Commission, Annual Re~ort 1996-97, at 56; Mark Bourrie, "Human rights commission rnediates away case backlog", (1998)4 Workplace News 22.

72Based on the author's persona1 experience.

tribunals ought to review and approve the substantive content of every settlement of a legal

dispute. On one level, I am simply suggesting that attention be paid to some of the signifiant

concems about the procedural Limitations of mediation processes expressed by some of the critics

I have discussed, and efforts made to address these. If informa1 processes systematically favour

the advantaged, the promise of quality outcornes through mediation is a chimera. Further, if

mediation in practice does not live up to its theoretical promise of a principled and s a t i s w g

process for its participants, uniess this is addressed, the result wili be cynicism about the justice

system. On another level, 1 suggest that those working in. or concemed about, justice systems

ought to develop an understanding of the appropriateness of the values advanced by mediation

and settlement processes to the particular structure within îhey are practiced.

There may also be reasons why specific administrative tribunals ought to be particularly

concemed about sorne of the critiques offered of ADR processes. Some administrative processes

reflect distributive justice goals, for instance, by providing bureaucratie assistance to the

enforcement of statutory rights by a systemically-disadvantaged group. Later, 1 will argue that the

system of employment standards enforcement can be seen in this light. If this is the case, then

serious attention is warranted over the concern that informal processes tend to favour the

advantaged, and whether widespread mediation of these issues undermines the distributive justice

goals of this regime. Other administrative structures exist to forward collective goals, in the case

of human rights systems, the realization of the equal dignity and worth of al1 persons. In this

conte* it is particularly vital to ask whether the widespread settlement of cases rnay undermine

the development of public values through the interpretation of human rights legislation, as in the

Fiss critique above".

Finally, it is also my contention that administrative û-ibunals cannot be neutral about the

outcome of ADR and settlement processes, and the significance of these to the values and goals of

their statutory regimes. Many of the elements of administrative Iaw which distinguish it from

"private Iaw" (the fiequent CO-existence of corrective justice goals and d idbu t ive justice goals,

its historical basis in reform efforts, the polycentric nature of many of its problems) can be

collapsed into the notion that it is as much about administration as about law. Administrative

tribunals are involved in the development of the values and policies affecthg those social

interactions govemed in some manner by statutes. We look to them to provide some guidance as

to the coIlective values and compromises represented by legislation. They are, in a nutshell, about

much more than simply dispute resolution. The goal of administrative adjudication is not just

resolution, but resolution in keeping with a statutory mandate. Because of this, 1 suggest,

administrative tribunals ought to have an interest in the outcomes of their settlement and

mediation pro~esses'~. Again, 1 am not urging substantive review and approval of settlements by

nAnother dimension to this issue is the peculiar status of members of administrative tribunals, who do not generally enjoy the sarne Ievel of tenure and therefore, independence, as the judiciary. Qrrare whether a lack of tenure may provide a subtle disincentive to decide difficult and politicaIly-contentious cases, hence leading to the encouragement of party-setîlement efforts. The potential for this "moral hazard" is exceedingty difficult to measure, let alone respond to; yet it is hard to completely ignore.

"Having said this, 1 recognize that some administrative tribunals adjudicate disputes wliich are very much bipolar or supportive of private ordering, and do not have significant distributive effects. The ideas expressed here rnay have less relevance to these. One example may be disputes reiated to the conduct of collective bargaining, for example, whether an employer or a union has bargained in good faith. Since in generaI the legislative scheme goveming the conduct of collective bargaining (which 1 distinguish from access to collective bargaining) recognizes the value of self-governance and fieedorn of contract, it is unIikely that Iabour relations tribunals wiI1 have much interest in the particular outcomes of the settlement of these disputes.

tribunals as a matter of course. What 1 am suggesting is that tribunals develop an understanding of

whether or when widespread settlements may conflict with or detract 60m the values embodied in

an administrative scheme.

VII THE FUTURE OF MEDIATION AND SETTLEMENT IN ADMINISTRATlVE LAW

Here, 1 will tentatively suggest some reasons why despite some of the compelling critiques

of mediation and ADR processes which have been offered, it is neither realistic nor useful to

debate whether these processes are "good" or "bad". For various reasons, administrative tribunals

will either continue their reliance on mediation and settlernent, or wish to explore the introduction

of mediation into their decision-making processes in order to encourage negotiated resolutions.

Given this, for administrative law as well as for private law, the important questions are when, to

what extent and how settlements and mediation are to be given institutional encouragement.

Firstly, the promises of mediation are hard to resist. Even those who engage in

adjudication are not immune from the promise that mediation processes can provide more creative,

satisQing and holistic resolutions to legal problems than adjudication. Equally as compelling to

any agency with finite resources is the promise that ADR mechanisms will lead to lower caseIoads

and expense in the processing of daims. Although, as 1 have suggested above, there is mixed

ernpïrical evidence in support of both of these claims7', nevertheless, they exert a powerful tug.

Further, the experience of specific agencies in Ontario does bear out some of these promises. The

'*Sec text accompanying notes 47-48 above.

recent institution of a systematic rnediation program at the Ontario Human Rights Commission, as

will be descnbed below, has proven to be an important factor in the Commission's recent attempts

to address a case backlog, with a high rate of early settlement of complaints".

Secondly, it wodd be a mistake in thinking about administrative adjudication to draw a

sharp dichotomy between public and private endsn. Just as with court adjudication, the success of

administrative adjudication, and its ability to deliver on its promises, is not autonomous f?om the

needs and desires of its participant^'^. Various examples illustrate the degree to which

administrative adjudication depends on the values of consent, compromise and accomrnodati~n~~.

The tripartite labour relations tribunais, for instance, reflect nor only the search for expertise, but

also for acceptability. Several tribunais in Ontario have developed their rules of practice and

procedure in consultation with the publics0. In part. this rnay be because of a desire to draw on the

expertise of those appearing before thern; I suggest that it also reflects the reaiity of legitimation as

76See also text accompanying note 7 1 above.

771t has been said in general that "much regulation becomes effective through moral suasion": Hany W. Arthurs, "Mechanical Arts and Merchandise: Canadian Public Administration in the New Economy" (1997) 42 McGill L. J. 3 1 at 39.

"It has been suggested that in al1 triadic conflict resolution structures (ie. where there are two disputant5 and a third party), there is a mix of coercion and consent: Martin Shapiro, "Compromise and Litigation" in Pennock and Chapman, supra, note 25. Although these structures can be ordered along a continuum, ordered by the proportion of consent to coercion at each point along the continuum (with, for instance, the go-between at one end of the continuum and the judge at the opposite end), al1 points along the continuum reflect some mix of the two. In his thesis, judging, for instance, depends on eliciting sufficient consent to its verdicts to ensure voluntary cornpliance with degrees, since enforcement mechanisms are ofien underdeveloped.

791 have drawn some of these ideas from Kent Roach, "Teaching Procedures: The Fiss/Weinrib Debate in Practice", (1 99 1)4 1 U.T.L.J.247.

''1 am aware of the exarnples of the Ontario Labour Relations Board and the Pay Equity Hearings Tribunal; there may be more.

an on-going process. Further, because of cumbersome procedures for coercing CO-operative

hearing behavior on the part of participants before them (the power to invoke contempt

proceedings on the part of administrative agencies is restrkted, awkward and rarely invoked),

tribunals often rely simply on their moral authority to deal with difficult situations within hearings.

Legislative authority therefore cannot be divorced Born questions of moral legitimacy.

With respect to the role of party-settlements, at a very pragmatic level, there are many

disputes which would othenvise be heard by an administrative tribunal, which are settled and will

continue to be settled even without any institutional encouragement through such means as the

provision of mediation opportunities. Tribunals, as do courts, rely on a degree of private ordering.

In an administrative law regime which relies on party-initiation, many disputes are not crystdlized

into a formal proceeding by way of a cornplaint or application because the parties have resolved

the matter before a formal cornplaint or application is made or because a claimant has decided

against taking formal action. While this may be problematic if a large number of these inchoate

claims are meritorious, but not pursued, the administrative structure also relies to an extent on the

ability of parties to assess the potential for their grievances to be the basis of legitimate statutory

claims, without requiring officiai action in every case. Where resources are f ~ t e , the capaciv of

administrative tribunals to deliver on promises of justice would be compromised if every grievance

becarne a legal dispute, and every legal dispute required adjudication.

I therefore suggest that to the extent that Fiss' account of adjudication rejects the role of

consent in the legitimation of adjudicative structures, it is unrealistic. It does not recognize the

many ways in which courts and other tribunals incorporate and rely on the values of consent and

cooperation in their processes. As such, his critique of ADR and settlements is also lopsided, and

41

is unlikely to persuade many to abandon the search for ways to integrate these processes into the

resolution of legal disputes.

Fiss' account also does not recognize the intuitive respect for the values of party autonorny

and self-determination that most people share. Even many critics of ADR processes stop short of

suggesting that mediation sirnply be made unavailable for ceriain types of disputes. in deference, 1

suggest, to the values of self-determination. One way to address the shortcornings of mediation is

to ençure that it leads to truly voluntary solutions. To the extent that it is suggested that mediation

is inappropriate in a situation of power irnbaiance (such as divorce, for instance), proposals may

focus on means to support the party autonomy of the weaker paty and his or her ability to

effectively exercise self-detemiinations'. Self-determination is an important value for much of

administrative law as well. Human rights legislation, employment standards legislation,

occupational health and safety legislation, and income assistance programs may al1 be seen as

reflecting a collective consensus that society is better off when individuals are fkee to pursue their

private ends without the invidious eEects of discrimination, with a minimum level of employment

standards, without having to place their health and safety at risk to eam a living, and with a

subsistence level of state support when necessary. Collective goals and individual aspirations

i n t e m e . The structures of these administrative regimes, and the rnechanisms by which they are

invoked, enforced, developed and interpreted reflect a synthesis of individual initiative,

bureaucratic initiative, and collective and individual responsibility".

"See, for instance, Martha Sliaffer, "Divorce Mediation: A Feminist Perspective", (1988) 46 U.T. Fac- Law Rev. 162 at 199.

g2An interesthg example of the interplay between self-determination and bureaucratic initiative is contained in the proposals of the Ontario Human Rights Code Review Task Force which at the same tirne

A final reason 1 offer here as to why mediation and setdement will likely increase in

importance in the workings of administrative tribunals is that they are the procedural complements

to the trend away fiom big govemment. Much of current writing about administrative law is

dominated by debates about "dowaloading", the "retrenchment of the state", incentive-based public

policy instruments v. "command and control" regulation. The enthusiasm for deregulation may

well be a passing phenornenon. To the extent that it may reflect a longer term shifi in public policy,

however, it wouId corne as no surprise to find it accompanied by a re-evaluation of the function of

administrative adjudication. A recent Ontario governent commission on reform of the province's

regdatory and adjudicative agencies stressed the "dispute resolution" mode1 of administrative

adjudication; the notion of administrative agencies as a vehicle for the development of social and

econornic policy was minimizeds3. An increased reliance on mediation and party-settlement of

statutory rights disputes is consistent with a shifi in the locus of power in administrative law fiom

administration, to the market. There are many advocates of ADR, of course, who do not share the

philosophical premises of those cailing for less govemment intervention. To the extent that the

attractions of ADR extends across a varied philosophical terrain, however, it is likely to continue

gaining in importance as a means of resolving administrative law problems.

With the above in mind, I therefore turn to consider the "when"and "how" of the use of

ADR and settlement processes at administrative tribunals.

advocated for the establishment of a new governrnent agency with responsibility for initiating and advancing systemic discrimination cases, and for greater individual control over the advancement of other cases: Ontario Human Rights Code Review Task Force, Achieving; E~uality: A Report on Human Rkhts Reform (Ontario: 1992) (hereinafler "Achieving EquaIity").

83Eve~dav Justice. Report of the Agency Reform Commission on Ontario's Regulatory & Adjudicative Agencies (Agency Reform Commission: 1998).

VIII SETTLEMENT AND ADR PROCESSES AT ADMINISTRATIVE TRIBUNPJLS

SOME SELECT EXAMPLES

In this section, 1 will describe some different administrative tribunals and the settlement

processes that are in place at each. ALthough I have thus far treated administrative tribunals as an

undifferentiated group, obviously, there are many variations among them. These differences in

process, structure and subject-matter will shape. in tum. the diEerent ways that settlements are

reached, the form that mediation may take, and the manner in and degree to which tribunals

involve themselves in approving or reviewing the outcome of negotiated resolutions.

The Em~tovment Standards Act " provides statutory minimum standards for employrnent,

in such matters as hours of work? vacation entitlement, wages, and notice of temination of

employment. The standards are enforced through employee-initiated cornplaints which are then

investigated by employees of the Ministry of Labour, called Employment Standards Officers. In

addition to their investigatory role, Officers have the authority to make orders under the Act.

These Offices thus provide the fust level of detemination of rights under the Act. Their orders,

or refusals to issue orders, may be appealed by employees or employers to the Ontario Labour

Relations Boards5. The parties to these proceedings are the employee, the employer, and the

Officer, represented by legai counsel fiom the Ministry of Labour. The proceedings are adversariai

in nature, in the sense that the adverse parties are responsible for the presentation of evidence and

85The Director of EmpIoyment Standards also has the authority to refer to the Board an allegation that an employer has breached the Act, in the absence of an order to pay frorn an Officer.

argument, but they are not pureiy bipolar. The Ministry is a separate party and its role may change

fiom case-to-case at its instance, ranging from that of a full participant, examining and cross-

examinhg witnesses, t9 something akin to an interested bystander (where, for instance, the party

with whom it has a cornrnon interest is represented by counsel).

Currently, al1 appeals are scheduled for mediation prior to being set down for hearing.

Appeals which are settied may either result in a withdrawal of the appeal (in which case the

determination of the Officer stands), or a consent order of the Board, Ln neither case does the

Board review settlements for their merits.

The structure of human rights enforcement is similar to that of employment standards

enforcement in some ways. The Ontario Human Riehts Code 86 prohibits discrimination in

employrnent accommodation, services, membership in vocational associations and the making of

contracts. Proceedings are usually initiated by individuals. On the filing of a complaint to the

Ontario Human Rights Commission, the Commission offers mediation and if no resolution is

reached, undertakes an investigation into the complaint. At the conclusion of an investigation, the

Commission makes a determination as to whether "the evidence warrants an inquiry"". If it

detemiines an inquiry is warranted, the cornpiaint is referred to the Board of lnquiry for hearing.

Like the Employment Standards Offker, therefore, the Commission both investigates and

rnakes a determination about cornplaints before it. Udike the Officer, the Commission does not

make a determination about the substantive ments of a claim, but only as to whether a hearing

ought to be convened. In making this determination, the Commission is subject to administrative

law faimess requirernents, in particular, the duty to provide the parties with the "substance of the

case" and allow them to make submissions in responsegs.

In the structure of human rights enforcement in Ontario, the Board of lnquiry is the

standing tribunal charged with hearing cornplaints referred to it by the Commission. nie parties to

its hearings are the Commission, which has carrïage of the cornplaint, the complainant, the

respondent and others who the Board may direct to be a partys9.

Settlements which result in a request for withdrawal can occur at any stage of the processes

before the Commission. These requests do not require review by or approvd from the

Commission. Other settlements are approved either by a Regional Manager or the Commissiongo.

AIthough documentation as to the exercise of the Commission's discretion to approve settlements

is dinicult to obtain, anecdotal evidence suggests that the rate of approval or rejection may Vary

widely depending on the composition of the Commission and its sensitivity from tirne-to-tirne to

such issues as backiog.

Settlements which occur once a matter has been referred to the Board of lnquiry result in a

consent order temiinating proceedings. Parties are neither required nor encouraged to file their

Minutes of Settlement with the Board. There is nomally no substantive review by the Board of

V3ee Re D a m and Ontario Human Rights Commission et, a1.(1979), 26 O.R.(2d) 100(Div.Ct-) and F.W.T.A.O. v. Ontario Human Riphts Commission et. a1(1988), 10 C.H.R.R. !Y5877 (0nt.Div.Ct.).

8 9 S u ~ q note 86 at s.39.

gcSection 43 of the Code provides for a settlement which is approved by the Commission to be enforced through a further complaint under the Code; hence, where there is a concern for enforceability of the tenns of a settIement, approval by the Commission is usually sought.

the terms of settlements.

A final example in this sampling of different administrative tribunals is the Ontario Energy

Board (hereinafter "OEB"). The Board is responsible for regulating natural gas utilities as well as

reviewing certain aspects of Ontario Hydrors operations and advising the govemment on energy

matters. Naturd gas utilities rnay not increase rates without the approvd of the OEB, nor may they

engage in certain transactions and activities without such approval. The Ontario Ener-rn Board

Actg1 sets out the duty of the OEB to fix "just and reasonable rates" for natural gas. These rates are -

set by the OEB after a public hearing process which occurs for natural gas companies usually on a

yearly basis. Because these hearings take place on a regular basis, tend to involve recurring issues

and reIate to a lirnited number of natural gas companies, the participants in thern are often the same

kom hearing to hearing. The typical list of parties includes the gas Company, OEB Staff,

representatives of consumer interests, representatives of environmental interests, and

representatives of various industry interests including natural gas consumers and competitors to the

gas companies. OEB Staff are entitled to cross-examine witnesses, lead evidence and make

argument on the issues before the Board, and may take any position. The work of the OEB c m be

contrasted with the work of the tribunals described thus far in that it is overtly regulatory, being

based on a statutory standard which contains broad discretion, and involves a large number of

participants. There is an inquisitorial aspect to the rnanner in which the OEB makes its

determinations, since OEB staff have wide latitude in seeking M e r information and identifjring

issues beyond those presented by the parties.

A routine part of the OEBfs rate application proceedings is the "settlement conference",

which will be described in more detail below. Where agreements are reached during a settiement

conference, the parties create an elaborate document, titled a "settlement proposal", which

identifies the evidentiary basis for each point of agreement. The proposal is placed before the OEB

for review at an open hearing. The OEB reserves to itself the discretion to require evidence on any

matter of agreement between the parties, and to make a determination which differs from the

agreement, and has exercised this discretion on occasion.

IX ADRAND THE VALUES OF ADMINISTRATIVE LAW

In this section, 1 consider how the values reflected or encouraged by a systematic reliance

on mediation mix with the underlying values of administrative law regimes. Although it is not my

contention that this will always be the result, I suggest that paaicular mediation processes may

sometirnes have a transfomative effect on these values. I will use the example of mediation of

employrnent standards appeals to illustrate how widespread seîîlement can subtlely alter the

meaning of statutory rights, re-introducing private ordering as an important means of setting the

minimum tems of employment. Further, 1 will also suggest that the structure of particular

mediation processes can affect how issues corne to be forrnuiated, discussed and resolved. The

example of mediation before the Ontario Human Rights Commission will be explored in this

regard, to assess how well the mediation processes there serve the twin goals of corrective justice

and distributive justice embedded in Ontario's human rights Iegislation. 1 will also look at the

extent to which mediation and settlement processes either forward, or challenge, administrative

48

law values of opemess and participation in decision-making, and then discuss some concrete

challenges for those tribunals seeking to fuid a role for senlement processes within a public interest

fhmework of adjudication.

1. Ernployment standards mediation: the re-establishment of private ordering

A s introduced aboveg< employment standards legislation in Ontario provides for minimum

conditions of employment. By contmst with the Labour Relations Act. 1995, which in large part

establishes the fiamework within which unions and employees are fiee to bargaîn the terms and

conditions of employment, the Ern~lo~ment Standards Act \vas intended to replace the regime of

private ordering with legislative enactment, insofar as the minimum conditions of employment are

concerned. Although it is only a modest incursion into the ability of parties to fix the terms of their

bilateral transactions, nevertheless, the statute addresses the effects of inequalities of bargaining

power in these relationships by mandating the "floor" against which these exchanges take placeg3.

Reinforcing the degree to which legislative enactment is intended to replace private ordering for

those matters covered by the Act is section 3, which States that no employer, employee, employer's

organhtion of employees' organization shall contract out of or waive an employment standard,

See text accompanying notes 84 and 85 above

93.See Robert Howse and Michael J. TrebiIcock, "The Role of the Civil Justice Systern in the Choice of Goveming Instrument" in Rethinkin~ Civil Justice: Research Studies for the Civil Justice Review, vol.1 (Ontario Law Refonn Commission: Toronto, 19961, at 250. Although the statute applies equally to empioyees covered by collective agreements, as of December 1, 1996, these emptoyees are not entitled to file or maintain a complaint under the Act, but must process a daim arising under the Act through the grievance and arbitration procedure found in the collective agreement: Ernplovrnent Standards Im~rovement Act. 1996, S.O. 1996, c.23.

and that any such contracting out or waiver is nul1 and voidg4.

A feature of the regime under this Act is the role of the Employment Standards Officer

("the ER0 "). These Officers have a number of functions and po wers. They investigate cornplaints

and for this purpose are entitled to enter premises and require production of documents, and have

the power to require the cornplainant and the employer to attend at a meeting to deal with the

complaint. They also have the power to make various detenninations and orders under the Act,

incIuding limited detemiinations that an employer is a successor employer, orders to pay unpaid

wages or other compensation owing under the Act, and orders of reinstatement in specified

circumstances. The typical proceeding under the Act begins with a complaint by an employee that

a provision of the Act has been violated, leading to an investigation by an Officer. Then, either an

order to pay is made by the Officer, or a decision that no order to pay is warranted. Both orders to

pay, and decisions not to make an order. can be the subject of an application for review to the

Ontario Labour Relations Board. The Act specifies that an OEcer is a respondent to an

application for review of an order to pay.

Nthough one can speculate as to the reasons why the legislature chose to tuni over the

enforcement of the Act to a bureaucratie structure (instead of, for instance, creating a civil nght of

action under the Act), it is plausible to thiiik that a distributive justice rationale underlies the

creation of a process which is in theory neither difficult to initiate (cornrnencing with a simple

complaint), nor expensive for employees. The decisions of some referees under the Act reflects

94Su~ra, note 84.

the view that it is a piece of social welfare legislation designed to protect employeesgs.

Over the past few years, two sets of amenciments were made to the Act whose cumuiative

purpose, 1 suggest, is to diminish the force of its provisions as a mandatory code of minimum

standardsg6. Perhaps most significant is the new section 69.1 of the Act which provides:

Settlements 69.1 (1) The Board may authorize a labour relations oficer to attempt to effect a settlement of the rnatters raised by an application for review under section 68 or a reference to the Board of an employment standards offrcer's report under section 69.

B inding effect of settlernent ( 2 ) Despite section 3, if the labour relations oficer effects a settlement between persons, the settlement is binding on those persons.

Clarification, when settlernent may be effected (3) A settlernent may be effected even if,

(a) the employment standards oficer who issued the order or rehsed to issue the order or who made the report is not advised of the settlement; or (b) the review under section 68 or the inquiry under section 69 has started.

When settlement gives relief from order (4) If, in relation to an application for review of an order, the labour relations offlcer effects a settlernent between a person against whom the order was made and a person who would have benefitted fiom the order, the order is of no effect with respect to the person wlio would have benefitted fiom it if the person against whom the order was made complies witli the settlernent.

Termination of review or inquiry (5) If a settlement disposes of al1 the issues in a review under section 68 or an inquiry under section 69, the review or inquiry is teminated.

Distribution of administrative costs (6) if a settlement relates to an application for review of an order requiring the payment of money, the Director may, in accordance with the terrns of the settlement,

(a) distribute any amount held in trust; and

g5See, for instance, Re McIlrov, March 27, 1980 (Bendel) E.S.C. 749; Re Bachan Aeros~ace of Canada Ltd., February 18, 1980 (Kerr) E.S.C. 707.

%Su~ra, note 84; also, the Economic Development and Workplace Democracv Act, 1998, S.O. 1998, c.8; Royal Assent June 26, 1998, proclaimed in force June 29, 1998.

(b) refùnd al1 or part of the administrative costs paid by the employer under cIause 65(l.2)(b).

Breach of settlement, fraud, coercion (7) Subsection (8) applies if, on the application of a party to a senlement, the Board finds that,

(a) a person who is bound by the settlement fails to comply with it; or (b) a person who entered into the settlement establishes that the penon did so as a result of fiaud or coercion,

Same (8) In the circumstances described in subsection (7),

(a) subsections (2) and (4) cease to apply; and (b) the Board shall order that any review or inquiry that was terminated under subsection (5) or that proceeded but did not deal with the issues disposed of in the settlement be re-cornmenced, with respect to the issues disposed of in the settlement, at the stage the review or inquiry was at when the settlement was effectedg7.

n i e resdt, I suggest, is that the statute is now a cwious "mixed bag" of values. Many of its

provisions reflect the historic genesis of the Act as a mandatory minimum code of employment

standards intended to replace the marketplace in this lirnited area of transactions with legislative

enactment and bureaucratie enforcement. However, the statute has now clearly been injected with

a significant degree of deference to pnvate ordering, consistent with the philosophy of the

Progressive Conservative govemment that introduced the recent amendments. The two sets of

values nest together in a manner which is not altogether coherent. 1 suggest, however, that it is

possible to view the entrenchment of mediation processes under the Act, and the particular manner

in which mediation is currently being conducted, as important vehicles in the re-establishment of

pnvate ordering as the presumptive mode of decision-making for those transactions covered by the

Act. Previously, two of the keystones of the Act were substantively, s.3 (prohibition on waiver of

nghts under the Act) and procedurally, the role of the Employment Standards Officer. In

combination, these two elements contributed to the distributive justice goals of the Act: the

removal of bargaining power as a deteminant of certain minimum standards and the provision of

an efficient and inexpensive means of enforcing these standardsg8.

I suggest that the recent arnendments to the Act, and the current mediation processes which

carry out the intent of these amendments, do much to lessen the effectiveness of these two

elements and therefore of the ability of the Act to hifil distributive justice goals. Firstly, if there

had been any doubt as to the effect of s.3 on the compromise of clairns during the mediation of

appeals from Ofncer's orders, the new provisions of the Act make it clear that it is no barrier to

these compromises. Secondly, to the extent that the Act sanctions bipolar settiements of reviews

fiom Ofncer's orders, by excluding any requirement for participation by the Officer (despite the

fact that the Officer is, by the same statute, specifically deemed a party to such applications for

review), it shrinks the role of the administrative structure established for the enforcement of these

claims.

Current mediation processes help to realize these shifts in statutory focus. As an example,

on the issuance of a typical order to pay, perhaps because of a failure by an employer to comply

with notice requirements for termination, an employer may decide to appeal. Under the present

process, appeals (technicdly, these are called "applications for review") are not assigned a hearing

date at the outset. The parties are given notice of a mediation meeting presided over by a Labour

Relations Officer of the Ontario Labour Relations Boardw, and are informed that the "purpose of

'''In characterizing the first of these two goais as a question of distributive justice, 1 would disagree with the perspective of Howse and Trebilcock in supra note 93, that this type of regulation has no redistributive component.

99Labour Relations Officers perform a variety of functions at the Ontario Labour Relations Board, but most predominantly, as mediators in disputes before the Board.

the meeting is to try and help the parties reach an agreement that will settle the application without

the need for a hearing." Only after unsuccessful mediation efforts will the Board schedde a

hearing. At the present tirne, there is an approximate M e lapse of 4-5 months fi-om the time of

unsuccessful mediation, to the time of a hearing, and in total, a time iapse of about 6-8 months

fiom the time an appeal is filed to the tirne of a hearing'OO. Although neither the statute nor any

rule of the Board makes mediation mandatory, the structure of the mediation process and the

information provided to the parties strongly suggest that it is a necessary step prior to a hearing'O1.

It is not unusual during the mediatim of these disputes for there to be considerably more

hanciai pressure on employees than on employers. Some of this hancial pressure may &se out

of the time required to dispose of an application for review. It is also not unusual for employers to

obtain legal counsel and for employees to be unrepresented. At a hearing, the disparity in

information, sophistication and resources is not significant, since legal counsel from the Ministry

of Labour participate in the proceeding to defend orders to pay. At the mediation, however, the

Ministry is absent.

Al1 of the above, 1 suggest, combine to create a set of strong incentives to compromise.

Further, these incentives or pressures have a disparate effect, and are more likely to be felt by

employees, the very persons whom the legislation were intended to benefit. The pressures to

'"Information provided by the Ontario Labour Relations Board.

'OLThe Board's Interim Information Bulletin No. 8A (October 1, 1997) describes how mediation meetings are arranged, what occurs at them, and how hearings are subsequently scheduled if no settlement is reached. There is no suggestion that the parties may opt out of mediation if they choose and proceed directly to a hearing. Although normally, mediation is considered to be either "voluntary" or "mandatory", some commentators also use the category of "compulsory" mediation to describe those instances where institutional processes put pressure on participants to mediate. 1 suggest that the type of mediation under the Emplovment Standards Act shoutd be considered as compulsory.

compromise re-htroduce into the setting of minimum standards of employment the very market

forces whkh the Act replaced.

Further, 1 suggest that the statutory and procedural changes in favour of the mass settlement

of these claims also refiects a shift in the role of Officers under the Act- In particul- these

changes have the potential to undermine the structure established for quick and inexpensive

enforcement of the Act which relies on the key role of Officers in providing a first-level

determination. It h a been held that in establishing rights and liabilities as between parties, the

Officer exercises an adjudicative Function; while not required to hold a full evidentiary hearing,

Officers are required to permit parties a "Full and fair opportuuityl' to make out their case and to

know the case against them and to meet and refûte the caset0'. The mass settlement of appeals

fiom Officers' orders may undercut the role of these orders as an important element of what was

intended to be a fast, inexpensive and accessible administrative process. Since most settlernents of

employer appeals, for instance, result in a compromise by the employee of the monetary amount

owing, appeals may become a low-risk means of reducing liability. Anecdotal evidence suggests

that employers against whom an order to pay has been issued are becoming aware that appealing

an order to pay will likely result in a beneficial result at mediation. It is too early to establish

whether this anecdotal evidence is supported by a docurnented rise in the number of employer

appealsto3. It might be expected, however, that a result of the changes to the statute and to

'02Mitvan Iron Works Ltd. (Re), April24, 1984 (Davis E.S.C. 1620); Re Downing and Gravdon (1 WS), 2 1 O.R.(2nd)292.

lofThe potential also exists, of course, for the same to occur with respect to employee appeals frorn a refusa1 to issue an order to pay: if these regularly result in settlements which involve some measure of payment, appeals look Iike an attractive option.

mediation processes under the Act will be a shift in the focus of the enforcement activities under

the Act, fiom Officer's investigations and deteminations, to the appeals process. In particular, the

focus of enforcement activities under the Act becomes the mediation process at the Board.

Mediation, and not the statute, will set the de facto level of minimum terms and conditions of

employment in Ontario.

In sum, the combined effects of statutory changes which support bilateral rnediation of

employment standards disputes. and the details of the mediation process applied to these disputes,

have resdted in a significant move away fYom the original structure of this legislative regime. It

seerns that the inequality of bargaining power between employers and employees which led to the

imposition of statutory minimum standards of employment (enforceable through a bureaucratie

structure) has been permitted to re-assert itself as a predominant factor in the outcome of these

disputes. This need not always be the case in the mediation of employment standards claims; just

as the statute rests on general premises about the relative position of employers and employees

which are subject to particular circurnstances, so might the particular employment standards

disputes involve parties about whom no concem over inequaiity of resources or information miglit

arise. The point, however, is not that there is alwavs inequality, or that this inequality of resources

is alwavs deteminative of outcome; the point is that the process established for mediating these

disputes gives full scope for such inequalities to play a role in the resolution of these disputes. The

mediator, as facilitator, cannot compromise his or her neutrality by seeking to rnitigate the effects

of these inequalities. The parties bear responsibility for advancing their interests and stnicturing

the outcome. In interest-based mediation, al1 interests are given equal weight, even if they are

based on unequai idormation or resources.

Thus a dispute about statutory rights. withln a framework where individual private ordering

has been replaced by legislative enactment and where private enforcement has been butûessed with

institutional support, becomes transformed into a private bilateral exchange relatively fiee of the

constraints of the collective standards and values embodied in the legislation. These collective

standards are not irrelevant; however, they become simply one of a nurnber of "interests" which

may or may not play a part in the outcome of the dispute, and none of which bear any greater a

priori value than the other.

2. Human rights mediation: the CO-existence of corrective justice and distributive justice

1 now turn to the area of human rights enforcement in Ontario to consider how rnediation

influences the ability of this administrative law regime to achieve the twin goals of distributive

justice and corrective justice on which it is based. In the following discussion, my focus is slightly

different from that adopted above. In the employment standards example, 1 was interested in

e x p l o ~ g how some of the principles and values of mediation processes in general have the

capacity to alter the nature of administrative law issues and outcornes. Here, 1 turn to how the

design and implementation of particuiar mediation processes c m also affect the manner in whish

issues are forrnulated, characterized, discussed and resolved.

In the curent statutory regime, the Ontario Human Riehts Codet" guarantees equality of

treatment without discrimination with respect to employment, accommodation, membership in

'O4Sur,ra, note 86.

vocational associations, the making of contracts and the provision of services. The Ontario Human

Rights Commission is charged with a number of responsibilities under the Code. including: to

fonvard the poiicies of the Code, to promote an understanding and acceptance of the Code, to

conduct public education as to the policies of the Code, and to enforce the rights contained in the

Code. The Commission is most visible in this last role, for it is the governrnent body to whom

complaints are made about alleged violations of the Code. In its enforcement role, the

Commission initiates investigations into such complaints, and then determines whether complaints

should be referred to the Board of Inquiry for formal adjudication. The Commission also has the

power to initiate its own corn plaint^'^^. When a complaint has been referred to the Board of

Inquiry, the Commission takes carriage of the complaint, although cornplainants can be separately

represented by counsel and offer their own evidence and arguments.

The Commission thus can play several roles in the processing of a single complaint.

Before the matter is referred to the Board of Inquiry, it is both investigator and decision-maker.

M e r the matter is referred, it is a party-litigant. Acting in the capacity of decision-maker, it is not

an "adjudicator" in the sense that it is required to conduct an oral hearing to receive formal

evidence and argument; however, as noted earlier, in determining whether or not to refer a matter

to a Board, it is subject to administrative law fairness requirements, in particular, the duty to

'OSThis power is not often exercised. An indication of their infrequency is that statistics on Commission- initiated cornplaints are no longer reported in the Commission's Annual Reports, althougli they had been until f986/87. Sometimes, a particular case is highlighted in the text of an Annual Report, a s part of a general description o f the Commission's activities.

provide the parties with the "substance of the case" and allow them to make submissions in

response lo6.

The complexity of the role given to the Commission by the Code reflects the multi-faceted

nature of the goals underlying the Code and its processes. Clearly, there is a distributive justice

goal embedded in the legislation, in creating an agency with responsibility "to forward the policy

that the dignity and worth of every person be recognized and that equal rishts and opportunities be

provided without discrimination that is contrary to law", amongst itr. other responsibilities. Among

the functions of the Commission which reflect the distributive justice goals of the Code are its

ability to initiate complaints, its research and education functions, and the provision of

Commission counsel to pursue complaints. Distributive justice goals may also be pursued by the

Commission Ki the context of litigating these individual complaints. Individual complaints may be

the foundation for the Commission to take a leading role in the development of human rights and

anti-discrimination law, litigating issues with broad societai impact.

The Code also reflects the values of corrective justice, in providing for a complaints-based

mechanism where individuais can seek vindication through pubIic adjudication. A process

initiated by party complaints reflects, at least at the stage of the initiation of a cornplaint, the

principles of adversarialism and individual responsibility which are said to be the natural

procedural framework for the pursuit of corrective justicelo7.

lo6See supra, note 88.

L07Ln Kent Roach, supra, note 79, the author States: "The adversarial system with its emphasis on party initiation and control allows the individualistic party structure to operate. Although Weinrib does not specify that an adversarial system would be integral to corrective justice, it is dificult to imagine two systerns more compatible."

The system of human rights enforcement has been much criticized in recent years and some

of these criticisms reflect the uneasy pairing of disrributive and corrective justice goals within the

same processlo8. Indeed, proposais for refom of hurnan rights enforcement in Ontario which are

based on a separation of responsibilities as between individuals and the Commission for the

carriage of different types of cornplaints appear to bear witness to the formalist's assertions that it

is unworkable to wed corrective justice goals and distributive goals within the same ~ t n i c t u r e ' ~ ~ .

Whether or not it is unworkable, it is rny contention that current mediation practices at the

Commission reflect the inherent difficulties of atternpting to combine these two distinct justice

goals. While it would be superficial to suggest that they are directly counterpoised, it will be seen

that the processes which tend to encourage the pursuit of one goal often work to the detriment of

the other. In particular, 1 will suggest that the current system of mediation practiced at the

Commission is supportive of corrective justice values (albeit, as 1 will also suggest. imperfectly),

but does not significantly advance the litigation of more systemic issues. Further. the

Commission's exercise of its "gatekeeping" function (the monopoly over referral of cornplaints to

a Board of Inquiry) may be seen as part of its responsibility for advancing distributive justice, in

the sense that the Commission is responsible for the development of the legal principles in support

of the policies of the Code. However, the exercise of this gatekeeping role has proven to be the

subject of tremendous criticism, both in theory and in practice. Arnong other things, it has been

questioned whether it is compatible with corrective justice goals to "afford rights to individuals

10 Tor instance, "Achieving Equality", sucira, note 82.

'Og"Achieving Equal i~" , &d.

and then give a government bureaucracy a decision-making monopoly on whether or how they can

be ed~ rced . " "~

Further, it is aiso my contention that by being neutral about the outcome of settlements, the

Commission's mediation process emphasizes resolution in itself, over human rights-centred

resolution. While resolution may be important, and the data thus far suggests that the process is

indeed successful in encouraging both early settlement and a high rate of settlementl ' l , it is also

important to consider whether it encourages settlements which foster the values of the Code. In

my view, it does not. The question is whether this is good enough, or whether we should insist on

more.

Under section 33(I) of the Act, the Commission has a duty to endeavour to effect

settlements of complaints. Accordingly, there have always been processes present within the

Commission, with varying degrees of formality and structure, for the encouragement of the

settlement of complaints. In May of 1997, the Commission introduced a new mediation procedure,

involving staff of the Commission employed as Mediation OEcers. Mediation Off~cers meet with

the cornplainant and respondent to a cornplaint to attempt to facilitate the settlement of the

cornplaint'". Mediation can occur either through in-person meetings, telephone conferencing, or

"OHowse and Trebilcock, surira note 93 at 293.

'l'In Ontario Human Rights Commission, Annual Report 1997-98 (Ontario Human Rights Commission: Toronto, 1998), it is reported (at p.23) that 8 1% of cases referred to mediation were successfuIty concluded ( in contrast to expectations of a 45% rate), and that the mediation process was being completed within 9 1 days.

l''This basic description of the mediation process employed by the Commission is taken from A Guide to Mediation Services, (Ontario Human Rights Commission, 1997), and Procedures Manual, Part m: Mediation (Ontario Human Rights Commission, 1997)

through shuttle mediation when the mediator meets with each party separately. Mediation occurs

after the filing of a complaint and a response, but before any investigation has been conducted, and

is a vo lun tq process. Only when rnediation fails to produce a settlement will an investigation be

initiated by the Commission. Settlements which result in Minutes of Settiement are approved

either by the Commission or a Regional Manager.

Mediation is also invoked by the Board of Inquiry for those cornplaints which are referred

to it for adjudication. Mediation is usually initiated by the Board; although it is a voluntary

process, there is strong encouragement to engage in it prior to a hearing"3. Mediation before the

Board is usually facilitated by a Vice-Chair of the Board who is not assigned to hear the complaint.

Unlike mediation at the Commission, the Commission is a full participant in the mediation at this

stage. There are other important differences between mediation at the Board, and mediation at the

Commission. Mediation at the Board takes place after a complete investigation has been canied

out by the Commission and all the parties are aware of the findings of the investigative ~fficer"~.

Even where mediation does not result in a settlement of a complaint before the Board. the parties

are encouraged to use the oppominity to narrow the case to be litigated, by agreeing on facts and

issues.

The mediation process before the Commission is described in its materials as one that

"'Gerry McNeilly, Chair of the Board of Inquiry, in remarks made at the "Administrative Tribunals and ADR" conference (Osgoode Hall Law School of York University, June 15, 1998), who also stated that more than 99% of parties agree to participate in mediation.

'14Rule 40 of the Board's Rules of Practice requires the Commission to provide fidl disclosure of the results of its investigation, including witness statements, documents and evidence relating to the cornplaint prior to mediation. Further, the parties are sncouraged to provide disclosure: the Board's view is that successfûI mediation requires full disclosure: ibid.

draws fiom the principles of both interest-based and rights-based mediation, depending on the

individual assessrnent of each caseIlS. Interest-based mediation is described as a process where the

mediator helps the parties to "move away fiom the conflict, focus on interests and not positions",

and where the parties generate the& own solutions to the conflict. Rights-based mediation is

described as a process where the rnediator reviews the facts with the parties and advises them of an

appropnate remedy that would be expected should the matter proceed to the Board of Inquiry. The

mediator can thus propose remedies, which the parties may accept or reject.lI6 Despite the

references to the two types of mediation, there are reasons to think that interest-based mediation is

the predominant model. For instance, the timing of the Commission's mediation processes means

that unless the bare pleadings provided by the parties establish an agreement on the essential facts,

there is little basis for an informed analysis of the likely merits of the complaint being mediated"?

hecdotal evidence supports the impression that rights-based mediation is ir&equentH8. On the

other hand, mediation before the Board is more likely to be rights-based. It is presided over by a

Vice-Chair who is much more Iikely to view a complaint in terms of its legal merits, and it occurs

after the parties have been informed of the evidence, witnesses and documents which are relevant

to their cases.

In my view, there are structural disincentives in the practice of mediation before the

"'Procedures ManuaI, Part III: Mediation, supra, note 12 at 3 .

ll61bid.

'L71nterestingly, at the Canadian Hurnan Rights Commission, mediation (which it terms "conciliation1') is not attempted until afier an investigation has been compteted.

"'Based on conversations with human rights counsel and staff at the Commission.

Commission to the achievement of distributive justice goals through individual corn plaint^"^.

There is the fact that mediation is stnictured as a bipolar process of dispute resolution as between

the cornplainant and respondent. The timing of mediation, coming immediately afier the filing of a

cornplaïnt and before any investigation is conducted, discourages the identification or exploration

of broader issues. The timing of mediation also affects the degree to which the Commission

(whether through its Commissioners or through Reg ional Managers) is likel y to su bstantially

review the ments of settlements placed before it for approval. Without the results of any

investigation, the Commission has only the bare pleadings before it, dong with a resolution which

appears to satise both the complainant and respondent'". While some of this, 1 suggest, is not

inconsistent with the achievement of corrective justice (to the extent that it is linked with party-

controlled processes), it does not encourage the identification of broader issues which may form

part of an individual complaint. Even if broader issues are irnplicated by the complaint (for

instance, where there is a systemic problem, or a novel legal issue), they may appear either as

unsubstantiated potential only, or may not even surface in the material before the Commission.

Based on the material before it, the Commission will have little ba is upon which to object to a

settlernent. The result is that if there are elements of a cornpiaint which involve broader elements,

they aimost certainly will not be addressed.

On the other hand, some features of the mediation process rnay also raise concerns about

the capacity of the Commission to deliver on promises of corrective justice. The first of these is

" m i s is not to discount the other ways in which the Commission pursues distributive justice goals, which have been referred to above.

I2OThis is not to discount the other ways in which the Commission pursues distributive justice goaIs, which have been referred to above.

the linkage made between the process of mediation, and the need to reduce the Commission's

backlog. Both the Commission and its critics have identified the large volume of outstanding cases

at the Commission as an important problern to be addressed"'. It has been said that the backlog of

individuai cases has hampered the Commission in its abiiity to cany out its role in dealing with

issues of systernic discrimination and in its ability to cany out strong educational initiatives to

advance human rightstu. The settlement of complaints provides a means to fiee resources within

the Commission so that it can more effectively pursue these broader initiatives. Decisions as to the

allocation of resources amongst the Commission's diverse functions have distributive justice

implications, and are a necessary and admittedly challenging aspect of its work. The Commission

is justifiably sensitive to the perception that it is unable to meet systemic and educational goals

because of the demands of processing individual complaints. However, where the widespread

settlement of cases is relied on to serve administrative and bureaucratie goals, it may be questioned

whether it is at the expense of the corrective justice goals of individual complainantsl?

Aithough the reduction of an adjudicative caseload is often cited as a benefit of PLDR

processes, there may be concems about institutionalizing ADR for this purpose. The practice of

mediation is by nature informal and relies heavily on undocumented information and exchanges.

Where a rnediation process carries the burden of administrative pressures, the resolution of the

''l"Achieving Equality", ibid.

'="Achieving Equality", ibid.

'231n May of 1998, a news artide wrote of how the Commission had "tumed to mediation to help deal with a backlog" for dealing with complaints: supra note 7 1 . In its press release, the Commission reported that over 80% of cases that had gone to mediation since the process was initiated had ended in settIement. This h a subsequently been confirmed in the Commission's rnost recent Annual Report: see suDra note 1 1 1 .

particular dispute may be coloured by the mediator's awareness of these external needs, which may

be manifested in subtle waysi? The informality of mediation processes highlights another

concem which may be of particular reIevance to the statutory regirne for the enforcement of human

rights. I have described the views of those who are cntical of informal processes of dispute

resolution because of the advantages they provide to more powerful parties, and because of their

inability to contain prejudice. To the extent that hurnan rights legislation and the mechanisms for

their enforcement are al1 about rediçtributing advantage, confionthg prejudice, and evening

oppominities for the less powerful, these critiques of informal processes ought to be of pressing

concem to an agency responsible for human rights.

Power imbalances between complainants and respondents are likely to be a cornmon

feature of human rights complaints, just as they are in the employment standards context. As with

employment standards, the creation of a govemment bureaucracy to carry forward complaints of

violations of the Code which have been referred to adjudication, serves to rninimize the ability of

such power irnbalances to determine the outcome of the cornplaint, at least to the extent that it

ensures legal representation of the complainant's interests at the hearïng. In thk context, as with

the employment standards example, it may be questioned whether a mediation process which

provides for no representation of complainants (other than for those who have the means to provide

their own) is consistent with the redistributive policy which may be seen as an element underlying

the enforcement mechanisms of the statutory regime.

L241 have no reason to think that mediators at the Commission are influenced in their work by the Commission's need to reduce its backlog. However, one cannot help but wonder whether the reliance on mediation for this purpose coupIed with the widespread reporting o f high settlement rates arising out of mediation estzblishes unspoken targets.

The Commission's mediation procedures recognize the potential presence of power

imbaiance; mediation officers are directed to "determine whether power imbalances exist and how

they will be addressed" prier to the mediation meeting'? However, it is repeatedly stressed by the

Commission that mediators are disinterested and neutral. It has been suggested that the structure

of neutraiity which is a feature of most mediation processes permits power imbalances between the

parties to have a significant determinative effect on the substantive content of settlements

reachedlz6. Ifthis is the case, then a high sedernent rate is in itself no rneasure of a successfbl

mediation process, where the contents of settlements reflect the unequal negotiating power of the

parties.

The dilemma of how to address power imbalances within informal processes of negotiation

and mediation has vexed commentators on and participants in the ADR movement. Responses

have ranged fiom the somewhat idealistic (in my view) contention that imbalances in resources do

not necessarily accord with a party's negotiation p~wer"~, to deep concern about the suitability of

'"Procedures Manual, Part III: Mediation, supra note 1 12 at 1 1.

lZ6In Ian Momson and Janet Mosher, "Barriers to Access to Justice for Disadvantaged Groups", Rethinking Civil Justice: Research Studies for the Civil Justice Review, vol.2 (Ontario Law Reforrn Commission: 1996), the authors state that the ideologies of mediator "neutrality" and "harrnony" actively work in favour of the more powerfiil Party. Where neutrality presupposes that the role of the mediator is simply to facilitate the communication necessary for the parties to corne to their own agreement, non- intervention where one paw is taking advantage of the other promotes the interests of the more powerful Pars-

I2'In Roger Fisher and William Ury, Getting to Yes: Negotiatine; Agreement Without G i v i n ~ In (Houghton Mimin Company: Boston, 198 l ) , the authors advocate the development of hvo approaches to imbalances of power: first, the understanding of one's BATNA in order to protect against accepting terrns that will in retrospect be too unfavourabte, but whicli may have seemed attractive during the negotiations; second, developing a BATNA which is not dependent on having greater resources. The trouble with applying these suggestions within the context of mediating human rights cornplaints is that, realistically, the most powefi l BATNA for most complainants is to have their cornplaint referred to a Board of Inquiry, carried forward by legal counsel from the Commission. However, where mediation takes place

mediation to disputes arising in relationships characterized by power imbalances, such as housing

(landlord and tenant), f d y law, and employrnent? Whatever the contours of this debate in the

private law context, 1 suggest that it takes on an additional dimension when viewed against an

administrative law regime which seeks, in part, to provide a measure of distributive justice through

its enforcement processes. The issue of the role of power imbalances in mediation, and the inability

of mediation to adequately take account of power imbalances becomes particularly problematic

when addressing these imbalances are at the heart of the legislative scheme.

It may be that the inherent procedural limitations of informal processes and the need for a

system of human rights mediation to remain tme to its mission of giving voice to the

disadvantaged, can only be overcome by ensuring the representation of complainants during

mediation. Certainly, more attention needs to be paid to the safeguards which are necessary in

order for the products of these mediation processes to be seen as legitirnate and fair.

One stage of the Commission's settlernent processes which has been viewed by

commentators and participants as particularly problematic is "conciliation". Conciliation is used

by the Commission to refer to settlement discussions which are initiated by investigating offIcers

after the completion of the investigation. Unlike the contents of mediation meetings, the positions

taken by the parties and offers made and rejected at conciliation can be placed before the

Commission. The Commission can take this information into account in determining whether or

not to refer a complaint to the Board of Inquiry. In fact, it is the Commission's policy that where a

before any investigation, it may be diff~cult to evaluate the strength of this BATNA.

'"See, for instance, Morrison and Mosher, supra note 125 at 667-674 and the sources cited therein at fn. 112 and 113.

respondent makes a offer to setile which is considered to be reasonable by the investigating oEcer,

the officer may recommend that the Commission dismiss the cornplaint based on the

appropriateness of the settlement. In such cases. it appears likely that the Commission will foilow

the recommendation of the oEcerl? Considerable unhappiness has been expressed as to the

pressure that can be exerted on complainants to settle during the process of conciliation, by the

Commission invoking its role as the gatekeeper to a Board of Inquiry h e a ~ i n g l ~ ~ . There is a public

impression that the pressure placed on complainants to accept settlements in this way &ses in turn

out of the pressure felt by Commission staff to close files1? Even if this prerogative were

exercised in pursuit of distributive justice goals o f advancing and developing sound principles of

Iaw supportive of the policies of the Code, the fact that this prerogative exists and is used is

'2gProcedures Manual, Part VIL: Settlements (Ontario Wuman Rights Commission: 1997) at 1 1, where it is stated that "[ilf the settlernent offered by the respondent would provide proper redress, in tliat the plespondent has made an appropriate offer of general darnages, specific damages or public interest remedies based upon the remedies available under the Code given the circumstances of the case, then the Commission may be satisfied that referral OF the cornplaint to the Board of Inquiry under section 36 is not appropriate". And firther, "[il if the complainant fails to agree to appropriate remedies that fklly address the human rights issues, the commission may decide that referrai to the [bloard is not appropriate and this decision will be communicated to the complainant." The continuing appIication of this policy is interesting in light of the decision of the Ontario Divisional Court in Johnson v. Hamilton (Citv),[l991] O.J. No. 1077, wherein Mr. Justice Rosenberg commented on an example of this practice. stating,

To use a threat that they will refuse to request the minister to appoint a board of inquiry as part of the settlement procedure to coerce the applicant into accepting an offer of settIement is in rny view, in appropriate and inconsistent with the clear intention of the legislation.

I should also note here that the use of such pressure is not Iimited to conciliation, since Commission staff may and do initiate informal settlement discussions outside of both mediation and conciliation.

'30Achieving Eaualitv, supra note 82 at 22; Howse and Trebilcock, supra note 93 at 29 1.

131Kaye Joachim, "Refonn of the Ontario Human Rights Commission", unpublished paper, at fn.52, citing submissions to the Standing Cornmittee on Government Agencies, Report on Agencies, Bozrds and OHRCs (No.20), 3rd Session, 35th Parliament, 43 Elizabeth II, July 1994, The Ontario Human Rights Commission.

corrosive of the values of corrective justice. The pursuit of corrective justice fits uneasily with the

prospect of a governent agency making a determination on whether an individual c l a b may be

pursuedl". The fit is even more problematic when the ability to make this determination becornes a

lever to exert pressure on complainants to settle.

Some of the observations I have offered as to the flaws in the rnediation process at the

Commission point simply to the difficulties inherent in atternpting to achieve a balance between

corrective justice and distributive justice goals, and may be the realization of the legal formalists'

waming of the incompatibility of the two sets of goals within one Legal process. Others may not

reflect "flaws" as much as deIiberate choices about process design. The decision to hold mediation

at the earliest stages of a complaint and prior to any factual investigation may reflect a number of

considerations, such as the desire to avoid unnecessary investigations, or the perception that

participants may be more flexible in their positions, or the concern that human nghts issues be

dealt with quickly, particularly when the participants have an ongoing relationship. The decision to

hold mediation at these early stages of a complaint encourages, as I've suggested interest-based

over nghts-based mediation. As such, it encourages resohtions based on party-created noms

which may or may not coincide with the values of the Code and about which an objective

qualitative assessment is dificult. Earlier. 1 asked whether we should be satisfied with resolution

("peace"), or whether we should demand more (''justice"). Here, 1 suggest that it would be more

consistent with the responsibilities given to the Commission by the Code to give more priority to

rights-based mediation, thus encouraging resolutions which are grounded in the values of the Code.

13'See Howse and Trebilcock, supra note 93 at 29 1.

The Commission does not exist to provide "dispute resolution services". It exists to promote,

advance and enforce the rights contained in the Code.

As I have tried to suggest, concerns over the appropriate balance of resources amongst the

Commission's various goals are not fiivolous. The Commission's broad mandate requires it to

make dEcul t choices about the allocation of its resources. In this context, an early and hi& level

of voluntary resolution of complaints has value. The unnecessary expenditure of scarce resources

on the investigation of sorne complaints rnay, for instance, affect the Commission's ability to

provide timely attention to other more meritorious cases, a concern which should not be taken

lightly. Yet the Commission has not, to my knowledge, publicly developed any kind of policy

which would justiQ trade-offs in the interests ofstrategic litigation. In the absence of such a

policy, the alternative is a system of human rights advancement and enforcement in which human

rights rnay play only a minor role.

It must be noted that many of these concerns are considerably diminished when one

compares the mediation process which takes place after the Commission has referred a complaint

to the Board of hquiry. 1 have briefly described the mediation process at this stage above. The

Commission is usually a full participant in these mediation meetings, through legal counsel.

Because of this, and because mediation occurs at a stage where the parties are fully aware of the

evidence and fmdings of the Commission's investigating office on the complaint, 1 suggest that

there is a peater likelihood that public policy issues will be addressed as part of the settlement of a

complaint, and a greater likelihood that settiements will reflect the ments of complaints. Further,

concems over power irnbalances are addressed by the Commission's role in this rnediat i~n '~~.

4. Hurnan rights mediation and the value of openness in administrative law

A M e r issue which 1 wish to discuss in relation to the use of mediation to resolve

statutory disputes arises fiom the administrative law value of openness and transparency in

decision-making. Earlier, 1 explored the views of those critics of ADR whom I characterized as

holding a "public life" conception of adjudication. In this conception, adjudication is responsive to

the important democratic value of opemess in decision-making, while settlements and mediation

are not. Openness in administrative processes may occupy a M e r , distinct role. For

administrative agencies which deal in regulatory policy, in particular, open and responsive

procedures provide an essential buttress to legitimacyl? Hudson Janisch states that "...in a

parliamentary system of government, where major political decisions are supposed to be made by

those who are directly politically accountable, regulatory agencies made up of appointed officials,

s33Having said this, I should note that the relationship benveen complainants and the Commission is somewhat more cornplex than 1 have characterized it here. since there may be times when the interests of complainants and the Commission diverge. For instance, from time to time, the Commission withdraws fiom active participation in a case as a result of having reached its own senlement with a respondent; in these cases, the cornplainant is left with the choice of abandoning his or her claim, representing himself or herseIf at a hearing, or finding other legal representation: see Shapiro v. Peel [1997]OHRBID No.3, Decision No.97-002-1, Board File No-Bl-00094-96, February 3, 1997, a decision of a Board of Inquiry which found that a cornplainant was entitled to continue to pursue a claim despite a settiernent between the respondent and the Commission. Once again, as in the conciliation process, this raises a concem as to the Commission's ability to use its institutional role to pressure cornplainants into settlernents.

'34H~dson N. Janisch, "Effectiveness of the CRTC: Hearings, Decision Making and Appeal Processes", unpublished paper (February 1 1, 1998), presented at "Adapting to New Realities: Canadian Telecommunications PoIicy Conference", at 3.

may well be seen as interlopers." As a response. it is said, the "self-conscious adoption of open

processes may be critically important as a means of legitirnati~n."'~~ Janisch describes the extent

to which the Canadian Radio-television and Telecornmunications Commission recognized the

value of open processes in carrying out its mandate, and how as a result it was able to establish

itself as the "prime actor" in tefecomrnunications regulation. In addition: he suggests that the

CRTC's cornmitment to relative openness and accessibility in monopoly regulation (through its

regulatory proceediogs) atso played a very important role in breaking the iridustry's rnonopoly on

knowledge'". In diis con&, Janisch urged the CRTC, in its enthusiasrn to incorporate more

informal processes of mediation and negotiation into its regulatory procedures, to pay attention to

the values of access and openness in designing these new processes.

Openness is therefore related to legitimacy. It may also be an independent value served by

a particular statutory regime. R e W g to the example of the Ontano Human Rights Commission,

part of the Commission's mandate is to provide education to the public as to the values of the

Code. Historically, one of the means the Commission has employed to accomplish this is the

occasional publication of settiements of human rights complaints. In the ps t , therefore, it was

understood by the parties that the Commission was not restricted by confidentiality clauses in

settlements. Clearly, the Commission saw settlements as having the capacity to fulfil an educative

function, arnong other things. Currently, however, mediation policies state that the Commission

wiIl only publicize settlements resulting f?om mediation with the consent of both parties, in effecf

giving each party a veto on p~blication'~'. It appears that the potential educative role of

settlements has yielded to the need to encourage settlements. Presumably, it is perceived that

permittùig parties to keep their agreements confidential will encourage senlement. This may be

true; it may also be tme that such a policy undermînes both the democratic need for openness in

adjudicative processes in general, and the important legitimation role of openness in administrative

law pro cesse^'^^. Further, in a contexz where the number of cases adjudicated and decided in a

year is quite ~ r n a I l ' ~ ~ , such a policy is an additionai inhibition to the fulsome public development of

the normative values expressed in the Code.

5. Energy regdation mediation and the value of participation in administrative law

Related to the vdue of openness in the legitimation of administrative processes is the

importance of adequate public participation. This is particularly pertinent to those tribunals which

are engaged in a more explicitly policy-making function than the tribunals and agencies which

have been the focus thus far. Regulatory tribunals, in particular, decide issues which are

13'"The Commission, in serving the public interest, publicizes settlements that may have broad impact on human rights issues relevant to a particular industry or issue. Because of the confidential nature of the mediation process, the Commission will only publicize settlements resulting from mediation with the consent of both parties": Procedures Manual, supra note 1 12 at 6.

13%ee also Luban, "Settlements and the Erosion of the Public Realm"7su~ra note 65 in which the author views the openness of setttements as one means of ensuring that they f i l f i l some of the values central to the public-life conception of adjudication.

1391iere were Board of Inquiry decisions in 12 cases in 1997-98 and 1 8 in 1996-97: Ontario Human Rights Commission, Annual Report 1997-98, supra, note I 1 1, at 68, and Ontario Human Rights Commission, Annual Report 1996-97, supra, note 123 at 132-33.

predominantly polycentric and prospective-looking in nature. Questions of what are 'ljust and

reasonable" rates for telephone services, natural gas, or other goods and services provided by

regulated suppliers is much more overtly policy-centred than the question, for example, of whether

an employer committed a specified unfair labour practice. Where administrative adjudication is

linked with policy-making, the nature of participation in the tribunal's deliberations becomes a

critical issue. It has been said that " [slince technical expertise or administrative cornpetence c a ~ o t

of itselfdecide the contest between conflictuig normative daims that concern economic

intervention by govemments, the legitimacy of policy outcornes in a morally pluralistic democracy

must hinge signincantly upon effective voice in the policy process for both the rational defence

and the cntical scmtiny of the full range of such claims ..."'40 For those tribunals that engage in

policy-making, the provision of voice is usually given substance through measures to increase

access to hearing participation, such as broad standing rules, advertising of processes, intervenor

fùnding and costs orders. Where a regulatory tribunal turns to mediation processes as an

alternative to hearings, clearly, it is equally critical to ensure that the oppominities for voice remah

viable.

The Ontario Energy Board is one of these regulatory agencies whose mandate as an

adjudicator is linked to a policy-making role. As in most North Amencan jurisdictions, gas

utilities in Ontario must acquire special certificates in order to provide gas to a municipality?

Once it has a certificate, the gas utility has a rnonopoly on gas distribution within a specified

- -

14*Howse, Prichard and Trebilcock, supra note 14 at 533.

14'Munici~al Franchises Act, R.S.O. 1990, c.M.55.

geogmphical area. In order to ensure that this rnonopoly status does not result in expioitative

behavior, the OEB is given broad powers to regulate the activities of gas utilities. Although the

OEB fulfils various h c t i o n s under a number of statutes and many of these hc t ions do not relate

to the gas industry, perhaps its predominant function is the setting of rates for the sale. distribution,

transmission and storage of gas. In recognition of its role as a regulator engaged in the

determination of matters of public interest, the OEB has implemented a number of rneasures

designed to encourage broad participation in its processes. These measures include the public

advertisement of pending hearings, broad standing rules. and liberal costs eligibility guidelines.

As described above, the OEB has a well-established practice of convening settlement

confierences with respect to the issues arising in the hearings before itl? The typical proceeding

begins with an application by a regulated gas utility, which may relate to the rates they propose to

charge consumers in the following calender year, or to certain transactions which they propose to

enter into with respect to their regulated businesses. The applicant and the interveners are required

to file their intended evidence in writing. There is a process of "interrogatones" where parties are

entitled to request information kom each other as to the written evidence which has been filed.

Early in the proceeding, the Board dso convenes a technical conference for the purposes of

reviewing and c1a-g an application, an intervention, a reply, the evidence of a party, or matters

lqzSettlement conferences are a normal course of procedure for hearings relating to regulated natural gas utilities, but are not used for hearings held with respect to references from the Minister of Environment and Energy, the Minister of Natural Resources and the Lieutenant Govemor in Council; nor are they held with respect to hearings into Ontario Hydro's bulk power rates, where the OEB fulfils an advisoiy role. The following description of the OEB's processes is derived in part fiom Macaulay and Sprague, supra note 15 and in part from conversations with regular participants in OEB proceedings. Although 1 describe the use of settlement conferences as "well-established", they came into regular use as part of the Board's processes only within the past ten years.

connected with interr~gatoriesl~~. Following the technical conference, the Board holds a hearing to

i d e n w the issues in the proceeding. At this issues hearing, it detemiines which issues will be

dealt with in the proceeding, and may fürther determine which of these issues will not form part of

the settlement conference process. Where it makes a decision that an issue will not form part of a

settiement, the parties are required to present evidence and argument on this issue at the hearingl".

The parties then attend at a settiement conference, whïch may take place over a number of

days. The OEB provides a mediator to facilitate settlernent of issues at this conference, who is not

an empioyee of the Board (although sometirnes, retired members of the Board may be retained as a

mediator). At the conclusion of the settiement conference, a document is produced (the

"Settlement Proposal") which sets out al1 of the issues on which there was partial or complete

settlement, lists the outstanding issues, identifies the parties who agree and disagree or who take no

position with respect to each settlement, and identifies the written evidence in support of each

settlement. Although Board staff participate in settlement conferences, they are not parties to the

Settlement Proposal.

The requirement to identiQ the written evidence which supports a settlement is found in the

Board's Rules of Practice and Procedure, which states that the "parties shall ensure that the

settlement proposal contains or identifies sufEcient evidence to support the settlement proposa1 and

that the quality and detail of the evidence will allow the Board to make fmdings on the issues."145

143 See Ontario Energy Board, Rules of Practice and Procedure (February 1997), at Section 34.

"+The fype of issue which the Board may exclude from a settlement conference is one which is novel and on which there is a lack of precedent in the Board's decisions. The Board may wish to hear evidence and argument in order to develop its policy on the issue.

'450EB, Rules of Practice and Procedure, supra note 143 at section 39.03.

Further, the Rules provide that the Board may direct the parties to make reasonable efforts to revise

the setiiement proposa1 if it is of the view that the rationale for the settlement of issues in the

proposal is inadequate or that the quality and detail of the evidence in the setilement pmposal will

not allow it to make findings on the issues. Where it is of the view that despite any efforts to

revise the senlement proposal, the quality and detail of the evidence in the proposal will not d o w

it to make hdings on the issues or that the public interest requires a hearing, the Board may

require evidence on the issues146. Al1 of these requirements are based in the provisions of the

Ontario Enerw Board Act14', which specifies certain findings of fact that must be made by the

Board as part of its determination of just and reasonable rates, and specifies that these findings of

fact must be "based on the evidence adduced at the h e a r h ~ g " . ~ ~ ~ The result of al1 of this is that the

settlement proposal is placed before the Board at an open hearing. The Board proceeds to hear

evidence on those matters which it directed excluded from the settlement process, evidence by

those parties dissenting fiom settlements, and rnay hear evidence on issues when it is not satisfied

with the parties' settlement.

The opportunities for public participation in settlement conferences appear to be no less

available than for participation in the Board's hearings. As indicated above, the Board advertises

notices of applications in the public media and invites interested persons to file notices of

L46M., at sections 39.04 and 39.05.

'47S~rira, note 9 1.

L 4 8 S ~ ~ r a , note 91, section 19. Under this section of the Act, the Board shall determine a rate base detennine whether the return on the rate base produced by the rates is reasonable. Further, the rate base is specified to be the total of a reasonable allowance for the cost of property that is used in serving the public, less depreciation, arnortization and depletion, a reasonable alfowance for working capital, and such other amounts as in the opinion of the Board ought to be included.

intervention. Although the Board's Rules of Practice and Procedure state that the Board shall rule

on the status of ail persons applying for intervenor status and provides for a procedure to consider

objections to these applications, in reality, there are rarely objections. It appears that both

applicants and the OEB are generally content to deal with issues of the appropriateness and value

of an intervenor's participation through the costs process. Once an intervention has been filed, an

intervenor is sent copies of the application and the written evidence in support of the application.

With respect to costs, as was also indicated above. the Board's costs guidelines are fairly liberal.

The Act States that the Board has the power to award costs in a way which is "not limited to the

considerations that govern awards of costs in any court". Among the ways in which the Board's

costs cnteria depart from those which are usually applied by a court are that costs awards may be

made in advance of a hearïng, and rnay be based on the ability of an intervenor to otherwise

participate in the p r~ceed ing '~~ . The Board's Rules of Practice and Procedure provide that an

award of costs may be made for participation in, among other things, settlement conferences.

In terms of pubIic participation, therefore, it appears that the seulement conference provides

for at least as much access to the processes by which the OEB arrives at its decisions, as the

traditional hearing. Indeed, it may even be that the use of settlement conferences encourages a

richer level of participation by the public than the hearing process. One of the perceived

advantages of ADR processes is that they permit parties to create solutions to their disputes which

may be more nuanced, detailed or innovative than those which are generally the results of

adjudication. Although this may not apply where an issue to be settled is a straightforward

'490ntario Energy Board, Rules of Practice and Procedure, supra note I43, at sections 29.08 and 57.

79

"quantum1' issue (such as a figure for the cost of working capital), fiom time to tirne, pubiic interest

groups are interested in ïncorporating more qualitative issues into these settiernents. For instance,

in a recent settlement, one gas utility agreed to undertake an "industry leadership role in the

development of standards for energy rating of natural gas appliances such as fireplaces, ranges,

dryers and pool hea te r~" '~~ . The nature of the cornmitment was M e r elaborated on; it included

assisting in the development of national guidelines through the federal govemment's

Environmental Choice program, undertaking a communications program to customers, the

promotion of products that cary the Environmentai Choice logo, and a cornmitment to extend

these efforts to equipment used in the commercial and institutional sectors. The cost of fûnding

these initiatives was to be considered a "demand side management" expenditure, a relevant factor

in detemllning a company's rate baseis'.

It is uncertain whether the OEB would have made such a detailed set of orders as to the

above issue if there had been no agreement; it is nomally reluctant to engage in the "micro-

management" of a Company as part of its regdatory functions. Through mediation, therefore,

public interest groups with an interest in obtaining such a cornmitment fkom the gas utility (such as

environmental groups and consumer groups) were able to address an issue in a rnanner not likely to

have resulted fiom adjudication, and obtain a detailed commiûnent on the issue.

In the above proceeding, the settlernent proposai was placed before the OEB at the rates

hearing. Before approvùig the part of the settlement relating to DSM expenditures. the Board

"OOntario Energy Board, In the Matter of An A~~lication bv the Consumers' Gas Companv Ltd. for Rates: Decision with Reasons, (1997)E.B.R.O. 495, Exhibit NI (Settlernent Proposal)

'''A demand side rnanagement expenditure (DSM) is incurred to make more efficient use of existing operations and suppiy of gas.

required the Company to provide evidence as to the cost consequences of the above commitment.

The Board concluded that "[oln the basis of the Company's testimony, the Board is satisfied with

the Company's assurances that any additional costs in such activities would be minimal", and

approved the agreement.15' As 1 have set out above, the Board is clear in its d e s and guidelines

that it is not obliged to accept the parties' settlement on the issues in its hearings. In this case,

apparently, despite virtually unanimous agreement to the settlement (two parties had no position),

the Board nonetheless wished to hear evidence in support of the agreement. This is not an

uncommon occurrence; the fact that the Board proceeds in this rnanner fiom time-to-time

illustrates a M e r point about participation in regulatory processes, and the role of mediation and

setdement.

I have discussed one aspect of participation in the OEB1s regulatory proceedings, which is

the direct participation by intervenors in rates hearings. As 1 have indicated, it appears that the

introduction and use of mediation as a method of shortening the length of hearings has not

impaired the ability of intervenors to contribute their voice to the Board's determinations; in fact, it

may be that on one level it has provided a richer forum for dialogue between the gas industry and

various groups that have public interest mandates. There is another aspect to the notion of

participation which 1 wish to explore with the above exarnple, however, and this relates to the

voice of the "unrepresented third party". 1 suggest that when the OEB decides to hem evidence on

an issue on which the parties have agreed, or when it decides not to accept the parties' agreement

(which, though rare, has occurred), it is implicitly acting on behalf of a diffuse "public interest".

Despite the presence of a number of well-established public interest groups, the OEB acts, or sees

itself as acting, as the ultunate representative of the public g ~ o d ~ * ~ .

It will be my contention îhat this is both necessary and problernatic. It is necessary because

to the extent that the Board is engaged in making decisions whîch have distributive justice

implications, and to the extent that the legitimacy of these decisions requires the broadest level of

participation possible, the Board cannot always be satisfied that the groups which have participated

in mediation and settlement of the issues with which it is charged adequately represent the full

range of interests which may be affected by its decisions. It would be impracticable for a tribunal

such as the OEB to assess, for instance, the quality of representation that a public interest

intervenor provides. It would also be impracticable for it to try and detemine how representative

an organization is, or whether changes in leadership within such organizations kom time to time

affect their mandate and focus. Given the limits of a tribunal's ability to depend on the participants

in its proceedings to rcpresent the full range of public interests affected, the tribunal must fmd a

mechanisrn to ensure that a settlement which is agreeable to those participants does not unduly

affect others who rnay not be represented.

This is of particular significance when one considers that in negotiation and mediation

theory, many successful negotiations result from the parties' ability to "expand the pie". Writings

on negotiation theory are replete with references to this concept (aiso called "mutual gains

Is3It could be argued that the OEB is simply being cautious about complying with the statutory directive to make certain findings of fact based on the "evidence adduced at the hearing": Ontario Enerw Board Act. supra note 91 at section 19(6). I suggest, however, that within this statutory prescription is considerable discretion for the OEB to decide what leveI of detail in the evidence is sufficient to support a settlement- It is therefore apolicy decision on the part of the OEB whether to intervene in settIements and require fùrther justification from the parties, or to accept the agreement of the parties.

bargaining"), which essentially suggests that the participants in negotiations convert what may

appear to be a fixed range of options, with a zero-sum outcome, into a broader range of options

which will ailow for greater opportunities for trading. In the ordinary bilateral transaction, the

source of the broader range of options is normdly the participants themselves. Parties are urged to

look beyond the specific focus of their legal dispute, to other needs and interests as well as other

resources which may be injected into the bargaining process to provide for this broader range of

options. An example which has been given of this notion is a personal injury lawsuit in which a

plaintiff seeks monetary compensation as the best approximation for being retumed to the state he

or she was in pnor to the injury, and where the defendant does not feel responsible for the

accident'? Rather than viewing the dispute as a disagreement over an amount of money, it may be

that the parties could satisfy much of their respective interests if the defendant is able to offer the

plaintiff a job. The defendant obtains the value of the plaintiff s labour, and the plaintiff c m eam

money which would be put touiards rehabilitation.

Another option which may be available to the parties, however, is to expand the resources

available for trading off by fmding some way to pass on some of the costs or risks of their bargain

to third parties. An obvious and mundane example of this is where the parties to a transaction are

able to gain mutual benefits fiom stnicturing a payment to create a tax advantage. AIthough the

result of this is the dispersal of part of the costs of the bargain to society at large, this is nor

normdly seen as problematic. Where a tribunal is seized of an issue, however, and where the

matters being negotiated involve matters of public interest, are inherently polycentric and capable

'"This example is provided in Carrie Menkel-Meadow, "Toward Another View of Legal Negotiation", supra note 40 at 795-7 and 8 10.

of affecthg an indeterminate number of interests. the tribunal may have a concem as to the

extemalities that rnight be created by the parties in order tu arrive at an agreement. In the example

of the Ontario Energy Board, it appears that the OEB rnight have been concemed about the

potential for the parties to the settlement to reach an agreement which might result in increasing

the cost of gas to füture ratepayerslsS. Despite the presence of public interest participants, the

Board saw itself as exercising an independent public interest role?

For both of these reasons, therefore. the impracticability of evaluating the quality of public

interest representation, and the extemalities problem, 1 suggest that it is imperative that regdatory

agencies which are involved in determining questions of public interest with distributive justice .. implications continue to assert a role, separate fiom the parties, as a representative of the public

interest. Further, although some cornmentators have suggested ways in which mediators or

facilitators in public interest disputes cm shape the mediation process so that extemalities are

recognized and taken account of"', mediators are not accountable in the way that the agencies

themselves are.

lS5A concem which is probably of greater significance to a regulator overseeing a monopoly utility.

156The OEB made this explicit in another decision where it rejected a component of a settlement proposal. In reaching its decision, it stated: "The Board respects the outcome of the ADR Settlement process in Iarge part because it is confident that the mix of interests represented in it ensure that the pubIic interest is protected. Where, as in this instance, the Board is urged by al1 parties to the process, including those representing customer interests, not to change the outcome of the process even when it appears that the public interest may require it, the Board must be concerned about the process .... In this circumstance the Board is of the view that it has no choice, if it is truly to act in the public interest, but to make i t . own determination of a reasonable result." Ontario Energy Board, In the Matter of Applications bv Centra Gas Ontario Inc. and Union Gas Limited for Rates: Decision with Reasons, vol.1 (1997)E.B.R-O. 493/494 at 200.

lS7See, for instance, Lawrence Susskind and Conn ie Ozawa, "Mediated Negotiation in the Public Sector: Mediator Accountabiiity and the Public Interest Problem" (1983) 27 Am. Beh. Sci. 255.

The form through which the public interest can be inserted into mediation processes by

tribunds varies. In the case of the OEB, the Board, as descnbed, reserves to itself the prerogative

to require the parties to re-negotiate an aspect of a settlement proposal, or order that evidence be

produced on a settlement proposai. In stnicturing their settlements, therefore, parties must take

into account whether the results of their negotiations are consistent with their understandings of

Board poiicy. Another manner of proceeding might be for Board staff to become a party to the

settlement proposal, Although currentiy, Board staff are present at seMernent conferences, their

role is lÏmited to providing assistance and information. If Board stafftook on the role of a separate

party during these negotiations, explicitly representing a broad public interest, the panel reviewing

a settlement proposal might well give the proposai more weight. This would provide greater

certainfy for the parties that the results of these negotiations would be accepted by the Board.

The OEB, 1 suggest, provides an exarnple of a tribunal which appears to have benefitted

fiom settlement processes without compromising on its capacity to regulate in the public interest.

AIthough the process is imperfect and will continue to require adjustment and evolution. the

settlement process does not present some of the problems 1 have described above in relation to

other tribunais and agencies. The prerogative to reserve certain issues for an open hearing, for

example, ensures its capacity to develop precedents when they are required. The provision of costs

for participation in settlement conferences assists in ensuring that lack of resources neither

prevents participation, nor drives the resolution of issues. The requirement that settlement

proposais be justified on the evidentiary record ensures that the noms applied to the resolution of

the issues are those which are consistent with the OEB's policies. If there is a difficult area which

remains unresolved, it may be the tension between the need to preserve a substantive prerogative to

85

review each element of a settiement proposal, and the inherent package nature of settlements as

compromises, to which 1 now tum.

6. Tribunal scrutiny of settiernents

The need for certainty as to the outcome of a settlernent process presents a challenge to a

tribunal which engages in the review of the contents of settlements. Primarily, the risks of actively

scrutinizing the contents of mediated settlernents iie in the creation of disincentives to the parties to

agree to these settlements. In the exarnple of the Ontario Energy Board, for instance. the parties

engage in very complex and detailed discussions about the components of a rate application, which

may include interest rate forecasts, customer forecasts, capital budgets, reasonableness of proposed

capital expenditures, gas costs forecasts, and operating costs forecasts. For each party to the

settlement proposal, its agreement on any one issue may not represent its optimal result on that

issue. Rather, each party has agreed to the proposa1 as a ~ackaee. This is a fairly obvious

observation, but an important one nonetheless. Bargaining theory suggests that the most rational

procedure for reaching agreement is to spht issues so that mutual concessions may be made

between the sub-issues. This leads to what David Luban has calied the "paradox of compromise":

... The resulting composite principle, or podolio of principles, has the curious property of

al1 compromises: though it is accepted by al1 the parties, none of its components is

acceptable to d l parties - only the entire package is. Because the package is the most

attractive one attainable, no one desiring to reach agreement with others motivated by the

same desire codd reasonably reject it - but no single item in it would win the assent of

a11 .1~~

In this context, the rejection by the Board of one element of a package settlement proposa1

may be seen as corrosive of the proposal in its entkety. It appears that the OEB is sensitive to this

probiem; rarely has it intervened in this rnanner. In one hearing where the Board did so, rejecting

an agreement on the cost of capital reached by the parties, there was vigorous argument fiom the

parties as to the need to view the settlement proposal as a package. It was argued that the proposa1

reflected concessions made by al1 parties in order to reach consensus, and that if the Board wished

to sustain confidence in the ADR process, it ought to ascribe considerable weight to the individual

components of a settlement proposal so long as the proposal as a whole supports just and

reasonable rates. Some parties suggested that if changes were pemiitted to one component of the

proposal, then dl aspects should be open for review; such a prospect would not, it was suggested,

encourage the negotiation of meanlligfùi settlement propos al^'^^. It does not appear that the rare

occasion where the Board has rejected a component of a settlement proposal has increased the

level of uncertainty as to the results of the ADR process to the extent that it has undermined the

parties' willingness to continue with the process. Were the Board to take a more aggressive stance

on these matters, however, it rnight be anticipated that the process would become less effective at

encouraging resolution of issues as between the parties. Where ADR initiatives are undertaken

with a view to shortening the length of hearings or reducing the need for full-scale adjudication, a

158David Luban, "Bargaining and Compromise: Recent Work on Negotiation and Informa1 Justice" (1985) 14 Philand Pub.Aff.397 at 41 6 .

159(1997)E.B.R.0. 493/494, Decisions With Reasons, Transcript of Proceedings and Written Submissions

tribunal may decide to adopt a less stringent approach to its review of settlements in order not to

lose the benefits of negotiated resolutions.

As 1 have suggested, it may not be necessary for a regulatory agency to minimize its role in

order to capture the benefits of party-settlements- One way to ensure its continued presence is

through staff participation in settlement processes, where there is no legislative or other

irnpediments to this. Further, to the extent that these settlement processes occur within the

h e w o r k of doctrines and policies, the existence of well-established policies provides guidance

to the parties as to the likely acceptability of a settlement. Where there is an issue on which there

is no clear precedent, because it is a novel issue or there are conflicting decisions, parties will be

aware that their settlement may hinge on an uncertain premise; they will be less likely to "logroI1"

agreement on this type of issue than on issues where a tribunal's policies are more sure. The

problem 1 have described will occur, 1 suggest, where the parties are "surprised" by a tribunal's

view of a settlement; the more predictability there is about the acceptability of a settlement

(whether through case law, policy statements, or the participation of tribunal or agency staff), the

less likelihood of such surprise occurring.

X CONCLUSION

As 1 have suggested above, the question for administrative tnbunals will likely continue to

be not whether mediation and settlement are intrinsically desirable processes, but when and how

they ought to be incorporated into administrative adjudication. Beginning with the discussion

above, I suggest sorne tentative principles to guide the effforts to answer these questions.

First, as I have suggested, it m u t be recognized that the encouragement of mediation and

settiement efforts is not value-free. Providing institutionai encouragement for the negotiated

resolution of statutory disputes reflects judgrnents about the appropriateness of private ordering in

determining the outcornes of these disputes. Particularly when there is an assumption that

mediation will be interest-based, the premise of mediation is that participants are fkee to choose the

noms to be applied to the resolution of their dispute. In some cases, this rnay be entirely consistent

with the basis of an administrative regime. In other cases, there rnay be concems about the extent

to which the elevation of private ordering rnay c o d i c t with the values of that regime. In al1 cases,

it is important to have an understanding of this issue and the importance of decisions about

institutionalizing mediation processes.

Related to ihis, in designing particular mediation processes, tribunais ought to consider how

the choice of particular processes rnay support certain conceptions of their adjudicative purposes.

Mediation processes whose goal is dispute resolution and which do not provide a role for the

incorporation of the policy objectives of an administrative scheme support the "dispute resolution

story" of adjudication, in which adjudication exists for private ends. In contrast, mediation

processes which are stnictured in some way to take account of these policy objectives (through

mesures such as tribunal approval of settlements, participation in the settlement process by

tribunal staff, or adoption of a rights-based approach to mediation) reflect a more expansive view

of the role of the administrative tribunal in developing and advancing collective values-

Second, it must also be recognized that the decision to provide informa1 alternative

processes rnay have distributional consequences. A iack of procedural safeguards such as the

provision of representation rnay have a disparate impact on certain classes of participants. Further,

89

there may be systemic pressures to settle fiom such sources as the timing of mediation and the

timing of hearings, the information provided to participants about the mediation process, and even

the presence of mediation officiais who are comected with the formal adjudicative structure, dl of

which may also have a disparate impact. The distributional consequences of informal processes are

of particular concern when these processes are invoked within the context of an administrative

structure which is intended to minimize or address inequalities in power and advantage. Attention

must be paid to the design of these processes so that they do not resuit in the erosion of the benefits

which were intended to be provided by that structure.

It is a given, in my view, that any mediation in the administrative law sphere should be

voluntary, in the sense that no sanctions would be invoked for non-participation in a rnediative

process. The legitimacy of adrninistrative law would be undermined, I suggest, by requiring

participants to search for compromises to their statutory rights. Furthemore, it has to be

recognized that voluntariness requires more than the absence of legally-recognized coercion. As 1

have suggested, there are many informal ways in which an institution can place pressure on

participants to compromise, through its control over the timing of mediation, the information

conveyed to parties, and the timing of hearings. Ail of the ways in which mediation is stnictured

and incorporated into a tribunal's processes rnust be scrutinized to ensure that the decision to enter

into mediation is t d y voluntary.

It is worthwhile considering whether a tribunal that wishes to estabiish a program of

mediation can assess which cases are more Iikely to result in resolution through rnediation, in

order to use its resources wisely. This may be a difficult enterprise. For many reasons, it is much

easier in hindsight, after rnediation has been atternpted either successfully or unsuccessfulIy, to

90

ident* some of the characteristics of the dispute which led to the particular outcorne. Sometimes,

it may oniy be as a result of a process, that ail of the parameters of a dispute becorne clear. Ln a

sense, therefore, the characteristics of a dispute which might be suggested as screening criteria may

be of more use forensically, than prospectively.

More fundamental an obstacle to attempts to classifi which disputes ought to be

adjudicated and which ought to be mediated is the fact that the boundaries between many of the

characteristics are not clear. It has been said that difficulties with creating a classification scheme

may reflect Fuller's understanding that "there is a wide overlap between problems suitable for

adjudication and other methods, that purely polycentrïc problems wholly inappropriate for

adjudication are rare, and that adjudication can set the rules for a large body of individual questions

that are not in their multiplicity amenable to adj~dication."'~~ One could add to that the important

observation made by Fuller and elaborated by others that particular social ordering processes have

a role Ui shaping the characteristics of the dispute submitted to them for res~lution'~'; if this is true,

the validity of prior screening is undemüned.

1 tend to agree with those who believe that it is not possible, or at least, extremely difficult,

to assess in advance which problems can be successfully mediated. In any case, the more

important issue for administrative tribunals is not whether there are impediments to successful

mediation, but whether there rnight be public interest considerations weighing against the

mediation or party-settiements of particular disputes. In "Fitting the Forum to the Fuss: A User-

'60Lorraine E. Weinrib, "The Role of the Courts in the Resolution of Civil Disputes" in Rethinkinn Civil Justice: Research Studies for the Civil Justice Review, vol. l,(Ontario Law Reform Commission, Dec. 1996) 305, at 3 17.

16'Lon Fuller, "The Forms and Limits of Adjudication", supra note 2; Felstiner et al., supra, note 26.

Fnendly Guide to Selecting an ADR Procedure", the authors provide a useful preliminary andysis

of the public interest perspective, albeit fkom the standpoinr of court pro cesse^^^'. Some of the

factors they suggest ought to be considered are: (a) whether a dispute raises a significant question

of statutory of constitutional interpretation; (b) where there is a problem of recurruig violations

which may require sanctioning or where the nature of the conduct calls for public sanctioning; (c)

where the establishment of a general principle is preferable to a series of repetitive and inconsistent

mediations; (d) where one or more of the parties is incapable of negotiating effectively; and (e)

where serious issues of cornpliance or discovery may be anticipated. The authors recognize that

courts normally have no power to prevent parties from settling their own dispute; however, in the

above circumstances, it may not follow that a court should encourage or assist settlement.

Based on my discussion of the rnediation processes at different agencies and tribunals in

the foregoing section of this paper, 1 suggest that in addition to the above, some of the most

important considerations for tribunals are: (a) whether there are significant externalities to the

dispute; (b) whether there is a significant potential for the dispute to affect non-parties; (c) whether

there is a need to establish a precedent in the area and (d) whether the issue is such than an open

hearing is necessary.

Several observations may be made about the above. First, these factors clearly overlap. A

tribunal rnay not wish to encourage the negotiated resolution of a dispute whose settlement has the

potential to create significant extemdities precisely because it is concerned about unrepresented

third parties. Some of these outside interests may be known or predictable, but not present.

I6*Frank E.A. Sander and Stephen B. Goldberg, "Fitting the Forum to the Fuss: A User-Friendly Guide to Selecting an ADR Procedure" LI9941 NegJournaI 49.

Altematively, the range of interests that may be aKected is unknowable or shiftuig. The potential

for an administrative law dispute, and for the sertlement of a dispute, to have effects beyond the

parties to the proceeding is an important consideration in determining the extent to which party-

settlernent ought to be encouraged.

Second, even where there are public interest considerations involved, there will likely be

few problems for which the option of some mediation or settlement is rejected absolutely. The

promises and potential advantages of mediation are too compelling to abandon easily. Thus it is,

for instance, that critics of mediation who are concerned with the impact of power imbalances on

informal processes, rnay suggest measures designed to support the voluntariness and faimess of

n~ediation'~~. Likewise, there are measures available to structure mediation and settlement

processes before administrative tribunals so as to take account of some of the concems listed

above. For example, the OEB has been able to avoid time-consuming litigation of many issues in

rates hearings, by encouraging parties to agree amongst themselves, while maintaining a strong

presence in the name of the broader public interest through its review of party-settiements. To the

extent that there may be concerns about the potential effect of power imbalances on the outcome of

mediation of employment standards and human rights disputes, the presence of legal counsel from

the administrative agency charged with the prosecution of these matters, or some other form of

representation, would go a long way to address these concems.

Nevertheless, there may still be some areas of administrative Law where mediation should

simply not be offered, nor party-settlements encouraged. Until its recent elimination, the Social

IQSee, for instance, Shaffer, supra note 8 1; Morrison and Mosher, supra note 126; Delgado et al., supra note 52.

Assistance Review Board had a policy againsr ernploying any ADR mechanisms because of the

power imbaiance between the parties, and because the disputes invoived subsistence level

benefits'". On a basic level, there may be some issues where the inherent inequalities between

participants simply camot be adequately compensated for. and where an adjudicative resolution is

to be preferred. The example of social assistance also raises a non-normative, pragmatic limitation

on the mediation of certain disputes. Unless there is legislative authority to do so, it might be

questioned whether a govenunent agency is able to "compromise" on a question of monetary

entitlement~'~'.

There may also be cases when an open hearing is required, for purposes of airing an issue

of public importance. 1 have obviously focused in my paper on a narrow range of tribunals and

agencies. One area of administrative law which 1 have not considered is the public inquiry. There

have been concems expressed about the judicialization of public inquiries, which relate to the

I6'%awrence M. Fox, "Administrative Agencies Ernpirical Study" in Rethinkine: Civil Justice: Research Studies for the Civil Justice Review VOL l(0ntario Law Reforrn Commission: 1996) 183 at 227. The Sociai Assistance Review Board, as it was then called, heard appeals about benefits available under provincial income assistance legislation. The current structure for the administration and adjudication of disputes under income assistance programs in Ontario is very diffèrent, having been the subject of major legislative change: see the Social Assistance Reform Act. 1997, S.O. 1997, c. 25.

'65Can a government agency which takes a position that a claimant does not meet eligibility requirements nevertheless agree to pay the claimant haIf of the full benefits? The answer to this may involve an understanding of nature and limits of agency discretion. An interesting example which iltustrates this point (indirectly) is the settlement of applications for review under the Emuloyment Standards Act. Prior to about April, 1998, a number of Settlements involved the Ministry of Labour "waiving" the statutory penalty required by the Act to be assessed by an Employment Standards Officer, over and above an order to pay wages owing. In the settlement of these disputes, the statutory penalty [which is paid to the Director of Employment Standards for "administrative costsl': section 65(1)] was often an important lever in obtaining a compromise on an appeal fiom an Oficer's order. Early in 1998, the Minister of Finance expressed the concern that these penalties were not available to the Ministry of Labour to forgo. Despite a very recent amendment to the legislation permitting some discretion in this area, the Ministry's current position is that, as "government money", this penalty cannot be waived for the purpose of a settfernent.

appropriateness of the application of the traditional techniques of civil or criminal processes to

broad issues of prospective-looking public p o l i ~ y ' ~ ~ . Yet there may be certain issues of pressing

public importance, which relate Iess to public policy than questions of political accountability or

maKeasame, for instance, which require the fomality, authoritativeness and transparency

associated with adjudicative procedures.

It is iikely that readers of this paper will have noted a tone of profound ambivalence

throughout a s to the prospect of the widespread mediation and settlement of administrative Law

issues. As one who is sympathetic to the pressures placed on administrative tribunais to combine

thoughtful, responsive answers to the questions placed before them, in a rnanner which is sensitive

to both individual aspirations and collective values, and according to a schedule which respects the

adage "justice delayed is justice denied", 1 fmd it difficult to reject the place of party-settlements

as a complement to the adjudicative process. Not only is reliance on party-settlements inevitable

for most adjudicative bodies with fixed resources, it is also unredistic to condemn the exercise of

personal autonomy and self-determination when these are valued so highly in most aspects of our

social interactions. Further, as 1 have suggested. the promises of mediation continue to be alluring,

despite significant indications that there is a perpetual gap between theory and reality.

1 have tned to explore the ways in which the practice of mediation and the encouragement

i66Michael Trebilcock and Lisa Austin, "The Limits of the Full Court Press: of Biood and Mergers" (1998) U.T.L.J. 1 .

96

of party-settlements in administrative adjudication may alter or shape the way that issues are

characterized and resolved before tribunals, and may either M e r or undermine administrative

law values. 1 have attempted to show how the practice of mediation rnay both reflect and

perpetuate certain values, relating to the primacy of self-ordering, the fiexibility of noms, the

elevation of interests over nghts, and the service of adjudication to private ends. The

incorporation of mediaiion processes into and the reliance on party-setîlements in the workings of

administrative may be necessary and even desirable, but it is not neutral. The challenge for

administrative adjudicators is to find ways to benefit fkom the promises of mediation while

remaining true to the distinctiveness and focus of administrative Law.

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