Matsqui First Nation v Canada (AG): The Dangers of Mandatory Mediation

Mediation is an invaluable tool which, when used correctly, can help parties avoid the procedural obstacles and inefficiencies of the legal system through a third party mediator. However, when used incorrectly, mediation itself can become an unnecessary obstacle.

In Matsqui First Nation v Canada (AG), 2015 BCSC 1409 [Matsqui], the Department of Fisheries and Oceans (DFO) infringed the Matsqui “domestic salmon fishing” right under s. 35(1) of the Constitution Act, 1982 by failing to issue certain fishing licenses to the Matsqui. The Crown applied for exemption from mediation because the unique circumstances of the case made it a “test case” of broad societal implications, for which mediation would be “materially impracticable.” The British Columbia Supreme Court denied the Crown’s application on the grounds that mediation would give the parties the opportunity to reach “some accommodations and efficiencies.” In this post, I argue that the Court should have decided that in such “test cases,” where the public interest is at stake, an exemption clause should be used to relieve the parties from the mandatory mediation requirement in order to achieve the necessary clarity on the issue that only the courts can offer. Forcing parties into mediation in situations where exemption is warranted takes away from the value of mediation as a means of alternative dispute resolution.

Facts and Issues

British Columbia’s Notice to Mediate (General) Regulation, BC Reg 4/2001 [Regulation], requires mandatory mediation once a Notice to Mediate has been issued by one of the parties. On May 26, 2015, the plaintiff served the defendant with such a Notice to Mediate. The Crown applied for exemption from the mediation in accordance with s. 23(c) of the Regulation, which exempts parties from attendance “if in the court’s opinion it is materially impracticable or unfair to require the party to attend.”

The prominent legal issue in this case was whether, for the reasons the Crown provided, mediation would be “materially impracticable or unfair.” The Crown argued that the DFO does not have the authority to deal with claims regarding the relationship between the Crown and aboriginal societies. Further, the Crown believed that it was highly improbable that such a claim could be resolved at mediation, because it “would almost certainly require approval at the highest levels of government” and there was no one available at the time with “full authority to settle” because of the ongoing federal election. The Court denied the Crown’s application for exemption. In his reasons for judgment, Justice Kent stated that he did not believe that mediation would be either impracticable or unfair because, following the observations made by the court in IBM Canada Limited v Kossovan, 2011 ABQB 621 [Kossovan], mediation at the very least, would allow for confidentiality, flexibility and the opportunity for the parties to reach “some accommodations and efficiencies” at a minimal cost.

Discussing the Decision

Precedents Relied on by the Court

In terms of considering precedent within the province, Justice Kent was eager to follow Executive Inn Inc. v Tan, 2008 BCCA 93 [Tan], the only other case to consider, and deny, an application for exemption since the Regulation came into effect in 2001. Outside of the province, Justice Kent relied solely on the Albertan case Kossovan, because Alberta’s requirements for exemption are arguably similar. However, both Tan and Kossovan are highly distinguishable from the present case.

The facts of Tan are alarmingly dissimilar. The overarching issue in Tan was whether the B.C. courts could require the appellants, who did not live in B.C., to attend mediation in Singapore. Location of the mediation is not an issue in Matsqui. Further, as Justice Kent acknowledged, the rejection of the exemption application was upheld because of “challenging international logistics, deep pessimism as to outcome, and outright hostility between the parties,” none of which were at play in Matsqui.

In Kossovan, IBM argued there was no realistic chance of the matter settling at mediation because they believed they would receive full recovery at trial. In Matsqui, the Crown is not applying for exemption on such a basis, but rather, for clarification on a constitutional issue and procedural practicality. In fact, the court in Kossovan relied on a list of reasons for exemption which included: “whether the issue involves a matter of public interest or importance which requires adjudication in order to establish an authority which will be persuasive if not binding on other cases.” The gravity of the Matsqui case, particularly the fact that the Matsqui were claiming damages for “cultural loss” arising from a s. 35(1) infringement, made the case a matter of public interest and importance.

A more appropriate case for consideration would have been Wilson v Canada (AG), (1998), 79 ACWS (3d) 352 (Ont Gen Div) [Wilson]. In Wilson, the applicants, who were seeking exemption from mediation, wanted the words “of the opposite sex” removed from the definition of “surviving spouse” in the Public Service Superannuation Act, RSC 1985, c P-36. The court granted exemption, and held that “constitutional cases, so often involving issues of paramount societal concern…[require] adjudication within a public forum such as a law court where the public interest is represented, and binding, effective decisions are rendered.” Justice Kent should have at least considered this case as persuasive authority. As the Crown proposed in Matsqui, and as Wilson reflects, “test cases,” especially those that have constitutional and societal implications, are not suited to the mediation process because of their public interest and need for transparency.

Analyzing Justice Kent’s Reasoning

In his reasoning, Justice Kent is so attached to the notion of “[reducing] mutual inconvenience and cost” through mediation, that he does not properly flesh out the strongest part of his judgment: his concession that declaratory relief respecting a constitutionally protected aboriginal right “is not the sort of remedy that is readily available in a mediation process.” As Trevor Farrow points out in his article, “Privatizing Our Public Civil Justice System,” (2006) 9 News & Views on Civil Justice Reform, this focus on efficiency and saving costs is part of a dangerous trend in alternative dispute resolution that we need to be wary of: “when it comes to a conflict between cost saving and efficiency…and transparent procedural justice – particularly in cases involving issues of public interest – the latter must always trump.” One might counter this argument however, by highlighting Justice Kent’s contention that the cost of mediation is minimal, only “an interim ‘loss’ of one or two days’ effort.” A “minimal” cost, however, does not make the process worthwhile. Justice Kent himself struggles to define the benefit of mediation in this case, speaking only in speculative half-truths: “presumably there is some basis for settling the claim available….some sort of creative resolution in principle may emerge.” Ultimately, by adopting a restrictive view of mediation rather than an adaptive one, Justice Kent sets a dangerous precedent that confines cases of even the utmost public importance to participating in an unnecessary and unbeneficial process.

Moving Forward After Matsqui

In referring to Kossovan in obiter, the court upheld the Alberta courts’ notion that “the threshold for obtaining an exemption is high and the rule is to be used sparingly.” But one wonders then: if this case does not meet the threshold, the standard of “material impracticability,” then what case will? Even Justice Kent concedes that there are “formidable obstacles” to mediation in this case. The DFO does not have the authority to resolve constitutional claims, the benefits of mediation appeared to be minimal if not non-existent, and the ongoing election barred the Crown from providing a representative with the “full authority to settle.” Furthermore, as it has been shown, Matsqui is a “test case,” which requires a resolution in court. Gary Smith has argued that, in situations such as these, “[The] exemption procedure must be liberally and knowledgeably interpreted to prevent the process from falling into disrepute” (see Smith’s article, “Unwilling Actors: Why Voluntary Mediation Works, Why Mandatory Mediation Might Not” (1998) 36 Osgoode Hall LJ 847). As Smith suggests, there is a very real danger in making mediation mandatory, without any reasonable possibility of exemption. Without exemption, we not only run the risk of losing transparency on cases involving issues of public interest, but we make mediation, a normally invaluable method of alternative dispute resolution, part of the burdensome legal webbing it is meant to circumvent.