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The jurisprudence on mediation and settlement communications is similar both within and outside of the employment context. First, it is important to maintain confidentiality of communication which occurs in mediation. Documents and discussions which are privileged are generally inadmissible in court. Additionally, where one party publicizes confidential information, that party may be subject to an order for contempt of court and/or to a right of action by the opposing party. This confidentiality will extend to documents which are produced for mediation and communications which occur outside of the mediation session, but while the parties are in ongoing settlement discussions.

Where a party can show that there has been a likely abuse of the mediation process and the privilege which attaches to communications during mediation, the courts have the discretion to remove privilege. Conduct which shows bad faith during mediation may be the subject of a claim for bad faith or mental distress damages, particularly in cases of wrongful dismissal. Poor conduct during mediation may also result in further cost awards.

Best Practices

The case law suggests the following best practices:

(a) Participate in good faith in mediation, whether the mediation is voluntary or mandatory. Specifically:

  1. Send a representative to the meeting;
  2. Do not unduly delay or cancel meetings;
  3. Offer settlement options which are fair, given the circumstances


(b) Do not publicize communications which arose in or around mediation. Do not share this information with witnesses.

(c) Pay a fair portion of the mediator’s tariff, as this shows good faith on behalf of the employer.

(d) Do not plead or rely on discussions which occurred in mediation, except in cases where it is possible to show that the other party has abused the mediation process and the privilege associated with such communications.

(e) Conversely, where a party attempts to plead or rely on discussions which occurred in mediation, the opposing party may move to have such pleadings stuck out or such evidence ruled inadmissible.


Employment Law Cases

In Marshall v Ensile Canada Ltd,1 where the plaintiff brought an action for wrongful dismissal and defamation, the defendant employer successfully sought to strike portions of the plaintiff’s pleadings referencing an alleged promise made by the defendant during mediation proceedings. Master MacLeod noted that the "[c]onfidentiality of mediation and settlement discussions is extremely important and it is critical that the courts give guidance concerning the procedure to be followed when abuse of those procedures is alleged."2 Mediations are important tools as they allow for flexibility in the outcome; an apology, for example, enabled through mediation, may be an important part of settling differences.3

Master MacLeod stated that the response to be followed in the case of a breach of confidentiality will depend on a number of factors, such as the sensitivity of the information and the purpose for the confidentiality.4 It is usual for the courts to find such confidential information inadmissible as evidence, but is rarer for the court to have it removed from the public record.5 Finally, Master MacLeod noted four ways in which the confidentiality of mediations is protected: privilege, inadmissibility, implied undertakings and a right of action in appropriate cases.

Conduct during mediation may be the source of mental distress damages arising out of bad faith dismissal. In Prior v Sunnybrook & Women’s College Health Sciences Centre,6 Master MacLeod discussed the importance of confidentiality in mediation and offers to settle. He noted that bona fide offers to settle should not find their way into pleadings and should not be treated as admissions of liability.7 However, where an offer to settle is not bona fide, it may not be privileged, as it may be material to proving bad faith or malice and/or to proving punitive damages.8 While Prior concerned a unilateral offer to settle, Master MacLeod specifically suggests that his conclusions extend to discussions which occur during mediation.9

In Antidormi v Blue Pumpkin Software Inc,10 the defendant employer failed to send a representative to a mandatory mediation session during an action for wrongful dismissal. This was a factor in the trial judge's decision to award the plaintiff Wallace damages and extend the notice period from 10 months to 12 months. Additionally, in Galea v Wal-Mart Canada Corp,11 the motion judge refused to strike out paragraphs from the plaintiff's statement of claim which pleaded two settlement offers from the defendant, despite the fact that these communications were marked "without prejudice". The motion judge held that such settlement offers may be evidence of bad faith leading to mental distress or punitive damages.

Parties' conduct with respect to mandatory mediation may affect cost awards. It is trite to say that parties should not avoid participation in mandatory mediation. In Gambeta v Canadian Imperial Bank of Commerce,12 the plaintiff employee who cancelled a mandatory mediation session one day prior to the session was ordered to pay the defendants’ costs thrown away which arose out of the plaintiff’s late cancellation. In making her award, Master Pope noted that early mediation is common to keep costs down, even though there may be questions as to the effectiveness of mediation which occurs prior to documentary production.13

While, even in the absence of poor conduct, mandatory mediation may be the subject of cost awards, the same is not true of voluntary mediation. In Saltosov v Rolnick,14 the Ontario Divisional Court refused to award the successful plaintiff costs for a voluntary mediation session. The Court noted that there are policy reasons for abstaining from such cost awards. First, the courts do not want to discourage parties from participating in voluntary mediation for fear of increased cost awards. Second, the voluntary mediation process is neither subject to, nor amenable to, supervision by the courts. Finally, while tariffs for mediators in mandatory mediation are regulated, those for mediators in voluntary mediation vary greatly.15

Other Case Law

Jurisprudence concerning mediations in settings outside of employment matters also focuses strongly on the need for confidentiality. When addressing the issue of whether a matter must remain confidential, courts often use the Wigmore factors,16 which were applied in the Supreme Court of Canada decision in Slavutych v Baker:17


  1. The communications must originate in a confidence that they will not be disclosed;
  2. The element of confidentiality must be essential to the maintenance of the relationship in which the communications arose;
  3. The relationship must be one which, in the opinion of the community, ought to be sedulously fostered; and
  4. The injury caused to the relationship by disclosure of the communications must be greater than the benefit gained for the correct disposal of the litigation.18


While the first three factors are easily determined with respect to communications during mediation, the courts generally grapple with the fourth factor in determining whether communications should remain confidential. For example, in Rudd v Trossacs Investments Inc,19 the Ontario Divisional Court held that the need to have a determination of specific terms of an agreement which the parties arrived at during mediation did not outweigh the importance of confidentiality and the general rule against allowing a mediator to act as a witness in a matter.

In Cardillo v NN Life Insurance Co of Canada,20 the Manitoba Queen's Bench was asked to rule on whether an individual was disqualified from acting as a witness due to the fact that he had been given the opposing party’s mediation brief. The court weighed the need for confidentiality in order to promote effective mediation with the importance of the witness' testimony on non-related issues. The court ultimately disqualified the witness because of the need to protect mediation discussions and because the plaintiff alone would be able to provide similar testimony.

In Davidson v Richman, Master Albert noted that "[n]otwithstanding the parties’ willingness to disclose confidential settlement discussions…the court ought not receive evidence of negotiations of mediation except in cases of clear abuse."21 In this case, the defendant insurer had participated in the mandatory mediation in good faith and had, in fact, paid unilaterally for the mediator at a rate significantly in excess of the tariff rate. Master Albert refused to hear evidence of the confidential discussions which occurred at mediation in the plaintiff's motion for an order that the defendant pay his costs for the failed mediation.

In Delisser v State Farm Mutual Automobile Insurance Co,22 Cameron, J. refused to remove settlement privilege where the plaintiff sought to use the defendant’s first response as a basis of a claim for bad faith and mental distress damages. Cameron, J. held that the plaintiff had failed to refer to any surrounding circumstances sufficient to constitute an abuse by the defendant of its right to privilege which would warrant removal of said privilege.23

Confidentiality during mediation may extend to correspondence which occurs outside of the actual mediation sessions. In Johnstone v Locke,24 the Ontario Superior Court of Justice held that an email sent from one party to another while the parties were engaged in mediation discussions was entitled to mediation privilege.

In Rogacki v Belz,25 the Ontario Court of Appeal discussed the effect of a breach of mediation confidentiality. The Court noted that rule 24.1.14 of the Rules of Civil Procedure cannot be relied on to find a party in contempt of court where that party discloses confidential information. The Court held that r. 24.1.14 does not address the confidentiality of the mandatory mediation process, but, rather, codifies the principle that communications made without prejudice in an attempt to resolve a dispute are not admissible in evidence unless they result in a concluded resolution of the dispute.26 However, the Court of Appeal also held that the inherent jurisdiction of the court may be exercised to invoke the contempt power where the impugned conduct does not involve a failure to comply with a court order.27 Consequently, where an individual breaches mediation confidentiality, he or she may be subject to an order for contempt of court.

Furthermore, as in cases regarding employment matters, parties who fail to attend mandatory mediation sessions will be subject to cost awards. In Laporte v Ridgewell,28 where the defendant insurer failed to attend mandatory mediation, it was required to pay to the plaintiff the mediator's fee, costs of the plaintiff for preparation and attendance at the case conference and of rescheduling the mediation. Attendance at mandatory mediation is required to be in person, and not by telephone.29

However, the courts do not have the jurisdiction to order an objecting party to attend a private mediation, where voluntariness is an important aspect.30

12005 CarswellOnt 803 (Master McLeod).
2Ibid at para 3.
3Ibid at para 11.
4Ibid at para 13.
5Ibid at para 13.
62006 CarswellOnt 3165 (Master McLeod).
7Ibid at para 4
8Ibid at para 5.
9Ibid at para 7.
102004 CLLC 210-008 (Ont Sup Ct J).
112011 ONSC 6887.
122010 ONSC 4812.
13Ibid at para 13.
142010 ONSC 6645.
15Ibid at para 18.
16E.g. Rudd v Trossacs Investments Inc (2006), 208 OAC 95 (Ont Div Ct).
17(1975), 55 DLR (3d) 224 (SCC).
18Johnstone v Locke endorses a different test: (1) A litigious dispute must be in existence or within contemplation; (2) the communication must be made with the express or implied intention it would not be disclosed in a legal proceeding in the event negotiations failed; and (3) the purpose of the communication must be to attempt to effect a settlement (see para 5).
19Supra note 16.
202005 MBQB 281.
21(2003), 31 CPC (5th) 188 (Ont Master Albert).
22(2004), 70 OR (3d) 774 (Sup Ct J).
23Ibid at para 18.
242011 ONSC 7138.
25(2003), 232 DLR (4th) 523 (Ont CA).
26Ibid at para 18.
27Ibid at para 16.
28(2007), 44 CPC (6th) 28 (Ont Master Pope).
30Irvine Estable, 2005 CarswellOnt 7354 (Sup Ct J).


This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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