ALTERNATIVE DISPUTE RESOLUTION (ADR):

AN ALTERNATIVE TO LITIGATION IN FAMILY LAW

(An excerpt of a public education article by A. J. (Sandy) MacIver)

A litigation lawyer with a so-called unadvertised specialty in family law these past 35 years, I have observed a shift in the public mood away from the respect normally accorded the legal profession in general. “Q. What do you call two thousand lawyers at the bottom of the ocean? A. - A good start!” is a recent joke provoking more serious laughter than is comfortable for one who cannot swim.

Perhaps the most dominant complaint the public has toward the law, in general, and lawyers, in particular, is the high costs associated with resolving disputes by litigation. Privately, many lawyers will admit that they appear to be pricing themselves right out of a career.

THE NEED FOR MEDIATION

In recent years Corporations have engaged in downsizing. These corporations have taken very serious steps to cut expenses. This includes taking a long hard look at their legal expenses and the manner in which they hire law firms. Instead of continuing with traditional loyalty (company maintaining an established law firm on permanent retainer), more and more companies are now actively shopping for the best ‘deal.' Many companies have moved from a singular ‘legal advisor’ on staff for referral purposes to creating entire ‘in house’ legal departments to meet the specific needs of their company. Salaries, not retainers, are now paid at a substantially reduced and controlled cost to the Company. Governments, businesses, financial institutions and individuals are all seeking a less costly solution to their conflicts. More and more companies, governments and individuals are considering another alternative: MEDIATION.  

In truth, Alternative Dispute Resolution (ADR) is the fastest growing area impacting the legal profession today. Traditionally, ADR has been more prevalent in the area of labour law, construction and insurance disputes, national and international business transactions. Moreover, the need to expand into other branches of the law is growing. 

The Superior Courts are jammed – trial dates are not available until often years after the issue in dispute is but a distant memory.

WHAT ABOUT THE UNCIVIL CASES – family law?  

Society’s single largest and by far, the most important, social clientele throughout North America keeps getting bigger by the hour. Nearly fifty percent of recently married couples will eventually separate/divorce. Approximately two-thirds of people who divorce will remarry but for them it does not get any easier. Statistics show that nearly 75% of second marriages fail. The statistics say that the incidence is higher in both categories for those simply ‘living together’. Most couples will have had children of their union. Rarely do you hear of a couple, simultaneously and mutually, agree to end their intimate relationship with a smile on their face. This applies equally to heterosexual or gay couples, common law or marriage relationships, opposite or same sex couples. In the result, these couples will wage emotional and economic war on one another ‘until death we do part’. Their weapons of choice will be 2 major bludgeoning issues – Primarily children, if there are children and Secondly money.  

Following the breakdown of any relationship the issues on the legal papers center around grounds of divorce (1 year apart, cruelty, adultery), occupation of the home on an interim basis, parenting schedules with the children, support for a spouse and/or children and the division of assets accumulated during the relationship (whether by statute law governing marriages or ‘constructive trust’ if in a marriage like relationship. Usually, one or the other party does not want the union to end. For the one left behind there is a strong and natural dislike for the one leaving or ‘abandoning’ them personally. There is a natural fear that 2 separate families will not live as well as one common family (and they won’t - that’s a given).  

Of even greater concern are the unknown long-term effects on the children of divorced parents. In ‘Helping Your Children With Divorce’ Edward Teyber, Ph.D. states “Divorce has become so common that nearly one half of the people marrying in recent years will be divorced within 10 years........Parents should be aware that the turmoil and disruption brought on by Divorce doesn’t just last for a period of weeks or even months.........it often takes as long as two years.....(for the family)......to fully recover a sense of confidence and feel secure with their own identity”.  

Without the direction or structure assumed to exist within the traditional nuclear family model, teenagers, especially, are now running in ever-larger unsupervised packs. The traditional adversarial system is simply not equipped to resolve these deeply personal and extremely emotional issues to anyone’s satisfaction. In Civil disputes, normally two litigants attend court to conclude a contentious issue. The Judge makes a decision. Good or bad their case is over. Not so in family law where the parties are constantly returning to court every time there is a perceived change in circumstances. There is an urgent and critical need for an alternative to the adversarial process conducted in family law. 

I say that for many reasons. Perhaps the most critical is the emotional harm occasioned to each member of the family. Research suggests that it will affect all later relationships including those developed by our children with ‘new’ parents and their own future partners in life. It is undoubtedly the most emotionally volatile and confrontational situation to arise between two litigants.  

One viable alternative is for each party to agree to be referred to a mediator/arbitrator trained to mediate such a settlement under the ADR process. The ADR mediation process is not for everyone. For example, it is not recommended for individuals who are the victims of violence. It will be necessary to repeat this message in this article to avoid confusion. 

Mediation can be a positive process in which a neutral third party assists two persons in conflict define the issues between them and by clear communication, guides them toward their very own unique tailor made solution, reduced to a written agreement. The final Agreement is usually arrived at by the parties’ own unique sense of fairness to the broader knowledge of their personal affairs and concerns for each other and their children, if any.

The use of a trained mediator allows for greater flexibility in resolving disputes. For example, when the parties agree to be bound by the decisions of the mediator, as ultimate arbiter, disputes over visitation or access on holidays may be resolved by a telephone conference call. Most disputes are also resolved more contemporaneous with the event. You may agree to employ mediators with differing expertise. 

In one example, two professors from the University approached me some 35 years ago well before joint custody was appreciated as a reasonable alternative to sole custody. As they truly wanted what was in the best interests of their children, I was able to successfully mediate a parenting plan with them. The couple had separated and purchased accommodations within a block of each other. The teenage children had keys to both residences and were allowed to see both parents according to the children’s schedule. A few years later, a dispute arose when the parties became involved with second relationships. Being somewhat educated in these matters, the parties agreed to put personal resentments aside. I recommended that they jointly attend at the offices of a child psychiatrist to act as a mediator on that issue. The couple agreed as they thought that the money was better spent on counselling for the children's sake than on lawyer’s fees.  

This action constituted trauma prevention. It is only when parents demonstrate their expressed selflessness that the children will be better equipped to cope with their parents separation/divorce. The parties expanded the role of the child psychologist to mediate in all issues relating to the best interests of the children including living arrangements, visitation and holidays. I was able to revise their original Agreement to accommodate the agreed changes and the necessary changes to the child support payments.  

A lawyer retained to act for one party and gives legal advice cannot change hats to become a mediator for that client and the other spouse. However, a lawyer with mediation training can greatly facilitate a settlement by employing ADR methods in negotiations.  

There are 2 forms of mediation – ‘interest based’ and ‘rights based’ mediation. Most people want to know the bottom-line, “What would the judge decide if we went to court?” Competent Mediators will have some idea as to the consequences or outcome if ultimately the parties decide to proceed to court.  

ADR also results in considerable savings to the family income. Most women seeking a separation are under the mistaken impression that their legal costs will be paid for by their husband. In all cases, each party is responsible for their own legal fees and expenses. If successful at trial, court costs are usually awarded to the successful party but this may only amount to 1/5 to 1/3 of your actual legal fees and expenses. In Mediation, the parties usually share the hourly rate of the mediator. Each party retains a vested interest in the process.  

Costs become more important as both attempt to maintain separate residences. Neither party wants a significant drop in their standard of living or that of their children. By way of example, the mediator may cost $200/hour at a shared cost of $100 each. By contrast, each party may retain a lawyer at $200/hour. The total outlay of the family income may therefore range from $200/hour to $400/hour. In addition, legal fees attract both 7% GST tax and 7.5% PST tax while the mediator’s fees attract only GST, not any other tax. 

At the conclusion of Mediation, a qualified lawyer/mediator may draft the final Separation Agreement for the parties to review with their respective lawyers when seeking independent legal advice. He/she may also prepare the necessary documentation for a Joint Petition for Divorce to be obtained by way of a ‘desk order’. 

If you are contemplating a legal separation you are encouraged to seek independent legal advice from a lawyer. Always be mindful that you may encounter difficulties when you try to extricate yourself from the formal legal process initiated by your lawyer. Let’s be honest - many successful litigation lawyers exhibit a typical ‘Type A’ personality and attempt to control all facets of their client’s affairs. The case becomes ‘their case’ and they slip into conversations such as ‘your client did this or your client did that’ as if it were fact as opposed to ‘my client suggests to me that your client may have contributed to this or that’. The objectivity blurs until all distinction is lost. This type of lawyer is reluctant to give up ‘control of the file’ by referring clients to qualified mediators. For economic reasons, they are even reluctant to convene four party meetings between lawyers and the spouses that might bring an end to the litigation, as the fees end when the file closes.  

By way of illustration, after my initial interview with a client, I contacted the lawyer for the other side and requested a 4 party meeting to discuss settlement. The issues appeared to be straightforward and there were limited resources available to these salaried clients trying their best to raise their 3 children on a restricted budget. The opposing lawyer was a senior partner with a major downtown law firm whom I had known for many years. I was shocked by his response – ‘Sandy, I can’t authorize a meeting until I have billed my client $5,000.00. I have an overhead to consider’. As a result, we went to Court. My client was successful both in the superior court and in the Court of Appeal on terms far greater than what was originally contemplated. Having lost throughout, the other lawyer, with his payment of $5000.00 or more in hand, now approached me to revert back to our initial discussions of a potential settlement contemplated by my client prior to litigation. Given my client’s success and the legal fees were unnecessarily incurred – the answer was a resounding 'NO WAY'. 

HOW TO HIRE A LAWYER [exerpt]: 

REMEMBER – when you are referred to as the ‘client’, it is being insinuated that you are the employee. In fact, you are the employer. THE LAWYER IS YOUR EMPLOYEE. You are in charge of the manner in which your affairs are to be handled by your attorney. You need to know what services are available to you and your spouse to resolve matters without litigation. You need to control your costs. HOW TO HIRE A LAWYER: it is essential that you come to an agreement with your lawyer as to the nature of the services or advice you are to receive from him/her and what you are willing to pay. You must agree on the hourly wage you will pay your new employee. Lawyers usually charge an hourly rate plus court time. If the lawyer restricts his/her practice to a particular area of expertise, rates may vary from $250/hour to $450/hour. One day’s work may constitute $2000 to $3600. Court time is time spent arguing interim motions or presenting your case at trial. This usually costs a further $1,500.00 to $2,000.00 per day pro-rated. Thus, a two-week trial on custody, maintenance or division of property may well result in legal fees in excess of $40,000.00 for each party. This is in after tax dollars and it is not an expense that will be reimbursed by your spouse or by any other source. Your total family resources will have diminished some $80,000.00. Given the fact that the divorce rate is hovering around fifty-percent, it is necessary to get a better handle on how to survive a divorce with some semblance of financial integrity, albeit, not entirely intact.  

Mr. Justice Huband in speaking for a three member panel of the Manitoba Court of Appeal recently warned the public of the cost of litigation in these words: “I thank counsel for both parties for their excellent written and oral arguments. At the same time, I raise a question as to whether the parties are being well served by being subjected to a very expensive process to resolve an issue involving a few hundred dollars per month. To some extent the expenditure of thousands over an issue of hundreds may reflect an intractable position taken by one or both of the parties. And perhaps some of the cost could be avoided by different advice from their respective legal counsel. But additionally, part of the problem may be found in the rules of court governing these disputes..........I would wish for a simpler summary method on motions of this kind. There must be a less expensive way of dealing with a problem of the kind presented in this case. Either the courts will devise a new methodology that is less expensive, or others in society will devise a method which by-passes the court process”.  

CHILD SUPPORT GUIDELINES 

Why is the issue of child support so controversial? 

It stems from the Supreme Court of Canada decision in the case of Ms. Thibodeau. For those unfamiliar with this decision, Ms. Thibodeau (the payee) argued that she ought not to be obligated to pay income tax on the support/maintenance being paid to her by her former husband (the payor) for the children of the marriage. Women’s Advocacy Groups lauded the lower court decision declaring that such treatment constituted discrimination. The Supreme Court of Canada decided that the funds were taxable in her hands and tax deductible to her former husband.  

As 60%- 70% of the actual voters showing up to vote are women and Women’s Advocacy Groups would support changes to the legislation, the Federal Government pounced on the issue like a lion on fresh meat. 

One thing was certain. Somebody was going to pay the taxes on that source of funds. There would be no windfall for recipients of support in Canada. A dramatic change in the philosophy of support was to occur. It would be wrong to assume that most members of the legal profession are conversant with the intricacies of the Income Tax Act. The Government of Canada pressed on and introduced the Federal Child Support Guidelines. 

In a recent news article July 17, 1997, then Attorney-General Uijal Dosanjh suggested that the new federal child maintenance guidelines are ‘simpler and straightforward’ giving rise to ‘less involvement of lawyers and fewer cases going to court’ because individual obligations are now identifiable from a ‘chart’. He contended that only the payor’s income needed to be identified from this chart, which would then be read in conjunction with the number of children in the family. To his mind, this formula will ‘automatically’ result in a Court Order reciting a specified sum as child support.  

In kindly terms, these statements are misleading and inaccurate. As well, the comments appear to be part of a concerted effort on the part of both federal and provincial legislators to sell the public on another piece of legislation, which best serves the best interests of both levels of government, not the public interest. In truth, the new child support guidelines have had the effect of constituting the single most significant tax grab since the introduction of the GST. 

The Province adopted the federal child support guidelines. Given the changes to the federal Income Tax Act, and the manner in which ‘child support’ will be treated for tax purposes, the Province was left with little choice. Both levels of government now have a vested interest to convince the public that a simple painless remedy has been found. If this new process does not work, the government will point blame at the courts and the lawyers. This is the same mentality that operated in an effort to introduce no-fault automobile insurance where the government deemed the benefits to their own pocketbook out weighed the public benefit. 

Prior to May 1, 1997 both levels of government participated in a cost sharing process to assist divorced parents spread out their financial resources to support children residing in two separate households. By the application of certain tax deductibility rules the payor paid child support to the parent with whom the children lived primarily.  

In traditional marriages, and many common law relationships, one parent had remained at home to tend to the household and child care responsibilities while the other parent sought employment outside the home. In these situations the stay at home parent had no employment income. Even in cases where both parties worked and resorted to day-care services to facilitate a dual income family there was a disparity in the employment income produced by each parent. Upon marriage breakdown the parent with whom the children primarily resided often had a significantly lower income when compared to that of the payer.  

With the tax deductions available for children and the use of one child as a ‘spousal equivalent’ deduction, more often than not, no income taxes became payable on the support received as income. This resulted in the total use of all money received as support and constituted the ‘disposable’ income of that family unit on marriage breakdown.  

Under this family assisted program both levels of government made a total contribution of approximately $410 million each year. The provincial governments contributed $170 million with the federal government’s share being $240 million. The new child support guidelines will produce a net gain of some $15 million in its first year of operation to the federal government alone. A recent study provided approximate numbers whereby the net gain in federal tax revenues amounted to $255 million in the first year, $305 million in the second year and $360 million in the third year. 

The stated purpose of the guidelines introduced May 1, 1997 was to help parents, lawyers and judges set fair and consistent child support awards in divorce cases. Child support paid under orders or agreements made on or after May 1, 1997 would no longer be taxed as income to the recipient or be tax deductible for the payor. Even though the legislative intent is laudatory and commendable, it suffers from a number of basic flaws. The most serious flaw is the assumption that the guidelines will result in greater disposable income to the parent with whom the children reside and thus, ultimately, enhance the children’s standard of living. This might be true if mom and dad earned the same annual income. However, this is simply not the case in the vast majority of divorces. 

Another underlying rationale for the Guidelines was to limit the court’s discretion in awarding child support. The fluctuation in the amount of child support awarded by different judges in similar fact situations was alarming. Moreover, there was an identified need to curb legal expenses and the court time required to argue the issue of child support. This would leave more money in the hands of the parents to pay the costs of meeting their children’s needs.  

As a lawyer and mediator in the area of family law for some 35 years I feel that the legislation is actually regressive. There are more discretionary factors now than ever before to be considered by the judge. As a result, the lawyer is faced with an even greater obligation to consider the ‘exceptions’ set out in the legislation to determine the obligations of the client. The paperwork has also been unnecessarily increased as the Court requests more information to properly carry out their judicial function. In the majority of cases, custodial parents will discover to their dismay that the former disposable income they received is, in fact, significantly smaller. The amount of litigation will increase, not decrease, and the resulting legal costs to parents will grow. Unfortunately, lawyers will continue to bring applications to Court, out of a deemed necessity to protect themselves, and insist that the Court set the amount of child support rather than negotiate in reliance on the Guidelines and all its variables. The scale on which child support amounts are calculated received a welcome increase on May 1, 2006.

The groups that will benefit most from this new legislation is, in fact, the governments and at the expense of the children and their parents. The least the federal government could have done was provide an option to parents to participate in the system which would have better served the interests of children of divorced parents. 

Those parents who entered into a separation agreement or court order prior to May 1, 1997 will be treated under the old rules provided they make no changes to the pre-existing agreement or order. WARNING: the federal government has now mailed out a ‘do it yourself kit’ to most divorced parents to enable them to voluntarily convert from the old system to the new system. Unfortunately, parents who do not obtain proper advice will discover too late that they have signed away their existing benefits in ignorance. If any divorced parent is contemplating a variation of their pre-May 1, 1997 order or agreement with respect to child support, it would be preferable that they see an accountant before seeing a lawyer. It would enable them to determine what financial loss will be occasioned to their disposable income under this somewhat debilitating legislation.  

Statistics suggest that of those marriages celebrated within the past 10 years approximately 50% will result in divorce. Many will become single parents. Most will be women. It is this group which has the most to lose under the current legislation. Without the initial support of Women Advocacy Groups this legislation could never have seen the light of day. Yet the add-ons and exceptions have now caused many members of these same groups to re-think their support of the legislation. Unfortunately, it is too late. 

Statistics suggest that in mediated settlements approximately 95% result in joint custody with primary residence being acknowledged with one parent and physical care is given to the other parent at certain specified times. In the result, fathers often use their resources to pay child and/or spousal support/maintenance as opposed to legal fees in the fight over custody. They are more apt to pay because they participated in the resolution of the issue and were not left with the feeling of having ‘lost’ custody of their children.  

In today’s modern marriage there does not appear to be any substantial commitment to working or growing within the relationship. All the hard work was expended in the chase of one another to get married. With that accomplished the parties moved on to other tasks. They assume the relationship will sustain itself, as if by magic. My brother in law, a psychiatrist, once told me that life is hard and then you die. Scott Peck, MD took this bumper sticker slogan one step further. He added that once you accepted the premise that life is indeed hard, life and the journey through it becomes easier. Most successes in life are directly attributable to the amount of effort we put into the venture. Any garden left untended will reduce itself to weeds.  

Legislation ought to be considered which would provide for mandatory ADR in non violent marital matters. Fifty per cent of Canadian marriages celebrated in recent years are expected to end in Divorce. Divorce is preceded by Separation. Many people do not proceed with a Divorce for religious or other personal reasons. Statistics relative to marriage or live-in breakups is bound to be higher. It is the largest segment of the population affected by such laws or policies and yet the least attention appears to be given to the drafting and formulating of such legislation. By Policy, the Government assumes to dictate a logical solution to an illogical emotional response. It is time for a review.

Here are some Sample Paragraphs of an Agreement to Mediate

PURPOSE OF MEDIATION

             This Agreement governs the terms and conditions of this family law mediation and describes the process of mediation to be used by the parties and the Mediator in attempting to resolve this family matter. By signing this Agreement, the parties agree to conduct themselves in a bona fide and forthright manner and to make a serious effort to resolve the matters in dispute, fairly and equitably. The parties agree to work together with the Mediator to develop options and negotiate alternatives fairly and reasonably.

 PREAMBLE

A.    The parties have made a decision to live separate and apart from one another. Each of the parties desires to resolve certain defined and/or all identified issues arising out of their relationship without engaging in an adversarial contest;

B.    The parties desire to resolve those issues related to the breakdown of their relationship by way of mediation and hereby agree to appoint the mediator to assist them; the parties may attend mediation privately on their own or jointly with their respective legal representatives.

C.    Family law mediation is a process whereby the parties attempt, with the assistance of a neutral and impartial third party, to reach a consensual settlement of issues relating to their marital relationship inclusive of a legal separation and/or divorce.

 THEREFORE the parties agree as follows: 

THE MEDIATION PROCESS

1.1             The parties hereby agree to appoint Alexander John MacIver, a Barrister and Solicitor, who is qualified pursuant to the Rules of the Law Society of British Columbia, to act as a mediator respecting those issues identified by the parties as arising out of their relationship.

1.2             The Mediator agrees to help the parties discuss the matters in dispute between them, assist the parties in communicating and negotiating as effectively as possible, and assist the parties in effecting a settlement of the matters which they identified as being at issue and requiring resolution.

1.3             It is anticipated that the Mediator and the parties will meet together more than once, although the number of mediation sessions and their length may vary depending on the number of issues, the nature of the issues, and the emotional state of the parties. At all mediation sessions both parties will be present with the mediator, unless it is agreed that it would be more appropriate to meet separately with the Mediator and/or other persons, including legal counsel of the parties, provided the parties expressly consent to that process.

1.4             The goal of mediation will be to reach a final agreement on those outstanding issues identified as existent between the parties. At the request of the parties the Mediator will prepare a draft document, in writing, setting out the terms of any Separation Agreement as may be reached between the parties and present the memorandum to the parties for discussion. If the parties agree to the terms of the proposed memorandum, or any amended proposed memorandum, the Mediator will, at the request of the parties, prepare a final Agreement for the parties.

1.5             The parties may take the draft Agreement or Agreement to their legal counsel for legal advice, preparation and signing. No agreement will be binding on the parties until it is reduced to writing and signed by both parties. After the agreement has been reduced to writing and signed by the parties, each party will abide by their concluded agreement as soon as possible. Once the parties sign an Agreement, it will become an enforceable contract between the parties.

1.6             It is understood that while the mediator is a lawyer, he is not, throughout the mediation process, acting as legal counsel for either party. It is understood that the mediator must remain neutral in all contacts with the parties and that he will not advance the interests of one party over the other. Mediation is a process of facilitated negotiation and, accordingly, the Mediator is not acting in the capacity of arbitrator and will not make decisions for the parties.

 FULL DISCLOSURE

2.1            Each party acknowledges that full and frank disclosure of all relevant and material information is essential to the mediation process. Accordingly, each party shall provide full disclosure to each other and to the mediator with all relevant information and documents necessary to the mediation process inclusive of completing all financial disclosure documents in accord with the Family Relations Act of British Columbia. It is agreed that the Mediator may fully disclose to each party all information provided to him by the other party, or any other relevant information of which he becomes aware during the mediation process.

2.2             The parties understand that a court of competent jurisdiction may set aside any written agreement ultimately entered into between them if full and frank disclosure has not been made to one another.

 CONFIDENTIALITY

3.1             The parties agree that insofar as the mediation process is part of an attempt to settle differences between them, all communications between the parties either with one another or with the mediator are made without prejudice and are privileged. Any and all information arising out of the mediation sessions shall be treated by all parties as confidential. Accordingly, the mediator shall not be required by either party to provide information or to give evidence in any legal proceeding with respect to any such communications. If either party seeks to compel the attendance of the mediator in any legal proceedings that party shall be responsible for all legal fees incurred by the mediator in his efforts to defend the integrity of this agreement and the intent of the parties to maintain confidentiality in all communications between the parties and the mediator.

3.2             The parties agree that the mediator may discuss any information disclosed in or arising out of the mediation with any lawyer representing the parties on the basis that such information is discussed or disclosed on a without prejudice basis and shall not be disclosed by any lawyer acting for a party to this agreement in any legal proceeding.

3.3             The parties are aware that the confidentiality referred to above could possibly be breached in the following circumstances, namely:

(a)         where the mediator is obliged by statutory enactment to report to the designated authority information which suggests that a child is in need of protection;

where a competent court of jurisdiction has the discretionary power to compel any person to give evidence and accordingly could possibly require one of the parties or the mediator to give evidence notwithstanding the provisions of this agreement.