Judicial dispute resolution in a mega-party lawsuit
Court of Queen’s Bench of Alberta, Canada
Judicial dispute resolution (“JDR”) plays a major role in litigation in Alberta. Since 2010, as a result of changes in the Rules of Court for civil practice in Alberta, it has been mandatory for litigants to participate in a form of alternate dispute resolution (“ADR”) before their case can be set for trial. Private arbitration, mediation, conciliation, neutral-party-led settlement conferencing and judicial settlement conferencing are all contemplated by the rule change. While no statistics are kept as to the number of civil lawsuits resolved by private dispute resolvers, it is believed that the majority of alternate dispute resolution processes connected with litigation in the Court of Queen’s Bench are JDRs.
The reasons for that are related to cost and results: a very high percentage of the cases dealt with in a JDR settle. The same is undoubtedly true of private ADR processes, but it appears that for now judicial mediators have the edge on private mediators in Alberta.
This paper will explore the writer’s experiences with a JDR involving one plaintiff and 160 defendants in a multi-million dollar mortgage fraud case. The lawsuit brought by a large Canadian Chartered Bank involved some 350 mortgages and 320 individual defendants. By the time the parties were ordered by the case management judge to participate in a JDR, the Bank had noted a number of defendants in default of appearance, it had obtained default judgments against others and had settled with many others. 160 defendants remained, including 17 lawyers who were alleged to have been negligent in performing services, real estate appraisers, real estate agents, bank employees, vendors accused of masterminding fraudulent schemes and purchasers who fraudulently or unwittingly signed false mortgage documents. Of the defendants, 40 were self-represented, and the rest of the defendants were represented by some 30 different lawyers.
The paper will firstly describe the process of organizing the JDR by the case management judge, the appointment of the writer and a colleague to co-mediate, the initial concept of how the JDR would proceed, the pre-JDR meetings and then the actual JDR itself. The JDR proceeded over a three week period, resulting in settlement with approximately 150 of the 160 defendants, and ongoing negotiations with the remaining defendants.
The paper will then analyze the factors that contributed to the success of the JDR, focusing on the procedural elements which were critical to setting the appropriate tone for an environment conducive to settlement, and the techniques employed by the co-mediators while working with the parties.
The paper will conclude with observations as to how the JDR might have been conducted differently, to maximize the time available for settlement conferencing and productive discussions amongst the parties.