One of the advantages that I think I have as both a litigator and a mediator is that I get to use the knowledge that I have gained in one capacity to make me better at the other.

For example, as a mediator, I have seen counsel repeatedly make the same errors, often resulting in a mediation failing or at least making the task of achieving a settlement more difficult, time consuming, and expensive for all concerned. I try to be mindful of these things when acting as counsel on a mediation. In this post, in no particular order, here are seven major mistakes that I see all too often.

1. Failing to Put in Sufficient Thought and Effort into a Mediation Brief

All too often, I see mediation briefs that are little more than a reiteration of the party’s pleading. There may be one or two documents included as an afterthought. Presumably, the lawyer’s idea is to actually prepare for the mediation the night before, rather than a week before, when the mediation brief is prepared. This is completely unhelpful. By the time the case has reached mediation, at the very least, there should be an exchange of productions, if not completed examinations, for discovery. Thoughtful preparation is important. As in most cases, the more effort one puts in, the more likely something productive will emerge by the end of the process.

2. Not Preparing One’s Own Client for What to Expect from the Other Side

Most clients have great difficulty appreciating that theirs is not the only side of the story. This often can lead to extreme dismay and discouragement early in the mediation process. The client does not have to agree that their case has holes, but the client should certainly be aware of what is being said by the opposing side before the mediation starts.

3. Making Inflammatory Remarks

In mediations that I conduct, I try to discourage counsel from making opening statements or permitting their clients to do so. Nevertheless, in some cases I am overruled. Counsel, or the client, then proceeds to open the mediation by saying something that angers the other side to the extent that their cause immediately attracts two strikes against it. If your client wishes to vent, please do so in private, with me. If the client insists that the opposing side hear what they have to say, let me know in advance so that I can tell opposing counsel, who can then prepare their client.

4. Fighting Battles on Unwinnable Points

A wise senior counsel once said to me, “why fight a battle you can’t win?” There are those counsel who believe that the more arguments one makes, the more likely it is that one of them will stick. That is simply not true. Poor arguments are dismissed immediately and the lack of credibility attracted by the making of unwinnable arguments usually taints the valid arguments.

5. Being Unreasonably Tough, Thinking that there will be Time to Settle Later

The truth is that while there will be plenty of time after an unsuccessful mediation in which a settlement might take place, it is highly unlikely that there will be a better opportunity to settle. Furthermore, the client will have to spend a lot more money between the date of the mediation and the date that another settlement opportunity arises, which will have to be recouped in order to have made the delay worthwhile.

6. Making Offers that Both Counsel and His or Her Client Know to be Unrealistic

Making an obviously unrealistic offer does not communicate the idea that you are hard-nosed. Nor does it start the bargaining at a point that is high or low enough that the ultimate agreement, if there is one, will be based on a better number than it would have been if your initial offer been realistic. All it does mean is that you either don’t know what you are doing or are not serious about resolving the case. Stop wasting everyone’s time, and be realistic. You can stick to your guns if you like, but if you do make a ridiculous offer, all you will attract is an equally ridiculous counteroffer.

7. Failing to Educate Your Client About the Costs of Litigation Going Forward

When faced with obstinacy, I usually find it helpful to have a discussion with a lawyer and the client about anticipated costs going forward. I am often surprised that the numbers revealed are numbers the client had never been told. This is an error. Just as the client is entitled to your advice on the probabilities of success or failure in the case, they are entitled to a budget for the rest of the case, including trial, so that the client can factor this into his or her thinking about offers to be made or offers received.

In the recently-decided case of Czerniawski v. Corma Inc., Mr. Czerniawski’s employment was terminated without notice after 19 years of service because of alleged misconduct. The court had to address the question of whether or not the misconduct justified such an extreme measure.

Mr. Czerniawski was an assembler in a company that manufactured products in the corrugated plastic pipe industry. During his 19 years with the company, he was a good worker, and there had been no issues with his job performance. The only performance review he had ever received concluded that he was a solid, steady worker who was competent, dependable, and hard-working.

Unfortunately, Mr. Czerniawski had an angry exchange with a co-worker concerning items missing from his work station. There was evidence before the court that in the course of the encounter Mr. Czerniawski was screaming, pointing, and waving his arms. Both Mr. Czerniawski and the co-worker were angry, and voices were loud. There was no physical contact between these individuals and no threats were exchanged.

Mr. Czerniawski was asked to leave the workplace. He asked to be informed as to why he was being sent home, but no answer was provided and he refused to leave. The police were called in to escort him out of the building. He was told that his employer would conduct an investigation and that he was not to return to work until that process had been completed.

He went back to the workplace several days later to deliver a letter at the reception desk. The letter put forward Mr. Czerniawski’s side of the story.

Mr. Czerniawski was never consulted during the course of the investigation and when it was completed, Mr. Czerniawski’s employment was terminated without notice. Mr. Czerniawski then commenced this lawsuit, claiming that his employment had been wrongfully terminated and that he was entitled to reasonable notice of termination.

The trial judge had found that Mr. Czerniawski’s failure to go home when told to do so was insubordinate, but she also took into account the fact that he had asked why he was being sent home and that his question had not been answered.

She also felt that his attendance at the reception desk to deliver the letter was ill-advised, but noted that this had taken place four days after the incident had occurred, during which time no one from the company contacted him to discuss the issue or get his version of the facts. Furthermore, while he did go to the factory to deliver the letter, he made no attempt to go into the plant.

The trial judge concluded that had Mr. Czerniawski been permitted to respond to the allegations of misconduct with his side of the story as part of the investigation, the employer’s decision to terminate may have been different. In essence, she felt that the decision to terminate was out of proportion to the actual misconduct. As a result, she ruled that Mr. Czerniawski had been wrongfully dismissed and awarded damages equal to the notice to which he was entitled at common law.

There is no doubt that there are circumstances in which misconduct, including insubordination, can amount to just cause for termination without notice. The Supreme Court of Canada has made it clear that in arriving at this determination, the entire context must be considered. The misconduct has to be so grievous that “it intimates the employee’s abandonment of the intention to remain part of the employment relationship.” As a result, one must consider the particular facts of the alleged misconduct as well as the employee’s tenure and discipline history. A balance must be struck between the severity of the misconduct and the penalty that is imposed.

In this case, given the employee’s long and clean record and the extenuating circumstances surrounding his behavior and starting from the moment he was asked to leave the factory, the judge felt that termination was a disproportionate response to Mr. Czerniawski’s behaviour. Instead, the employer should have imposed some form of progressive discipline for the incident such as a disciplinary letter or a suspension in order to send the message that the behavior was unacceptable, including a warning that further behaviour of this nature could result in a dismissal. This is an important lesson for employers confronted with this type of situation. Where a long term employee, with a clean record, behaves unacceptably, it is critical that the employer ensure that the employee understands the nature of any disciplinary action being imposed, and that the employee is given every opportunity to tell his or her side of the story before a decision is made as to any penalty to be imposed. It is difficult to imagine how an employer can impose a penalty that is in proportion to the offence without first obtaining the employee’s side of the story and thereby obtaining a complete understanding of the events in issue. An employer who fails to take this step may end up making a costly mistake.

In my blog post of March 9, 2018, I commented on the case of Uber Technologies Inc. v. Heller, an action in which the validity of an arbitration clause in an Independent Contractor Agreement was in issue.

Heller was an Uber driver who had signed an agreement with Uber. The agreement provided that any dispute would have to be resolved by arbitration, and would have to take place in Holland. Holland is the location of the head office of Uber’s parent company.

For obvious reasons, the idea of arbitrating in Holland would not appeal to a Canadian driver in almost any circumstances. Presumably, that was the idea behind Uber’s drafting of the clause in that manner.

Heller commenced an action against Uber notwithstanding the arbitration clause and attempted to persuade the Court that the clause should be ignored. He was not successful. The Court hearing the matter referred to numerous Supreme Court of Canada decisions that made it clear that where a mandatory arbitration clause appears in an agreement, it is to be given effect.

Nevertheless, Heller took his case to the Supreme Court of Canada. On June 26, 2020, the Supreme Court of Canada ruled that the arbitration clause in his agreement was not valid.

The Court noted that there was a substantial upfront cost that would be incurred by any party seeking to commence the arbitration process as contemplated by the agreement. That upfront cost was not disclosed in the agreement itself. In addition, as would have been obvious to anyone, the cost to arbitrate in Holland would have been exorbitant compared to a typical driver’s annual gross earnings, effectively creating a financial barrier for drivers wishing to pursue a dispute with Uber.

The Court ruled that in limited circumstances, an arbitration clause can be considered invalid. One such circumstance involves a finding of unconscionability.

Unconscionability requires both an inequality of bargaining power and a resulting improvident bargain. An inequality of bargaining power exists when one party cannot adequately protect its own interests in the contracting process. A bargain is improvident if it unduly advantages the stronger party or unduly disadvantages the more vulnerable party.

With standard form contracts, there is a real potential to create an inequality of bargaining power and to enhance the advantage of the stronger party, more particularly through elements such as arbitration clauses that deprive the weaker party of a remedy as a practical matter. When arbitration is realistically unattainable, it amounts to no dispute resolution mechanism at all.

On that basis, a majority on the Court found the arbitration clause to be unconscionable and therefore invalid. A concurring judge added that the arbitration clause was invalid because it violated the public policy that exists in favour of providing Canadian citizens with meaningful access to justice.

Unconscionability is an argument that, in my experience, is often attempted but rarely succeeds. The idea that such an argument would succeed in circumstances involving a mandatory arbitration clause, which is almost always regarded by the Court as beyond challenge, is quite surprising. Nevertheless, it is clear that the justice of the matter cried out for a remedy for Mr. Heller and it is interesting to note that the Supreme Court of Canada agreed.

Some time ago, I wrote a blog post about contracts that include arbitration clauses that make it a practical impossibility for a complainant to assert his or her rights. For example, when the arbitration clause specifies that the arbitration will take place in some far away country.

In consumer contracts, such clauses are often included in the vendor’s terms and conditions. While I have never done a survey, I am fairly confident in saying that the vast majority of consumers never read a vendor’s terms and conditions, even though they are available to be read. Most consumers simply click on the box that confirms that they are prepared to proceed with the transaction under those terms and conditions without a second thought. If those terms include an arbitration clause, which in turn provides for something that makes it a practical impossibility for the consumer to press forward with a complaint, the consumer will be left without a remedy unless the Court can be convinced to ignore the arbitration clause.

In the recent decision of a US Court in Nicosia v. Amazon.com, Inc., a United States Court of Appeals considered an appeal from a lower court judgment requiring a consumer with a complaint against Amazon to proceed by way of arbitration rather than through the court system. The Court of Appeal affirmed that decision.

In this case, Amazon’s conditions of use included an arbitration clause. The question before the Court was whether or not the plaintiff was bound by it in the face of his evidence that he had never read the clause, received notice of it, or demonstrated through his conduct that he agreed to it.

The Court ruled that the fact that the plaintiff denied ever reading the terms and conditions, including the arbitration clause by making his purchases, was irrelevant. The Court ruled that as in the case of paper contracts, to be bound to an arbitration clause, an internet user does not actually have to read the terms and conditions or click on a hyperlink that makes them available as long as the consumer has notice of the existence of the terms and conditions.

From the perspective of a consumer, this decision makes clear that there is a risk involved in simply ignoring the terms and conditions put forward by a seller in any transaction of any materiality.