News, Updates & Blog

By Lorne Wolfson

Lawyers, mediators and judges often include in their family law settlements or orders a term that issues regarding the interpretation, implementation, or future variation of the settlements or orders shall be determined through mediation/arbitration with a mediator/arbitrator to be agreed upon by the parties. This can be an effective mechanism to resolve issues that arise subsequent to the settlement or order. However, a recent decision by the Ontario Superior Court has thrown into doubt the viability of this process.

In Horowitz v. Nightingale 2017 ONSC 2168, the parties signed minutes of settlement in which they resolved all issues except support. They agreed that the support issues would be resolved through arbitration with Mr. G. Shortly after the minutes were incorporated into a court order by Justice Heather McGee (and the wife had taken the benefits of its property terms), the wife fired her counsel and refused to proceed with the arbitration.

The husband brought a motion pursuant to s. 7(1) of the Arbitration Act to stay the court action on the ground that the parties had agreed to arbitrate the remaining issues. Justice Clifford Nelson accepted the husband’s argument that the provisions of the minutes of settlement providing for arbitration constitute an “arbitration agreement” under the Arbitration Act. However, he dismissed the husband’s motion on the grounds that the arbitration agreement did not satisfy the technical requirements of the Regulation under the Arbitration Act (screening for domestic violence, agreement on appeal rights, execution by the arbitrator, etc.). He relied, in part, on wording in Justice McGee’s order which he found anticipated a further arbitration agreement.

While likely technically correct, Justice Nelson’s decision will make the resolution of family law cases more difficult. In recent years dispute resolution clauses have become standard terms in most separation agreements. They provide the parties with a simple and cost-efficient method of resolving future disputes, thereby keeping these cases out of the courts. Dispute resolution clauses may provide for parenting co-ordination for custody/access disputes, determination of Section 7 expenses, annual variation of support and other minor issues that the parties cannot resolve themselves. If dispute resolution clauses are not enforceable, then the settlement of all family law cases will become more difficult.

Justice Nelson was not insensitive to the policy implications of his decision. He noted: “From a policy point of view, I am mindful of how important it is in family law to hold parties to their agreement. It is also important to have options such as arbitration and mediation/arbitration for parties who wish to opt out of the litigation process. Getting parties to agree on both process and substantive issues is, after all, an important function of case management. Had there been no formal requirements necessary, and had Justice McGee and the parties themselves not recognized the need for and importance of a formal arbitration agreement, I may have been persuaded to stay the court application or deal with the apparent breach of court order in some other manner.”

Does Horowitz v. Nightingale mean the end of secondary arbitration? Not necessarily. Well prepared counsel could attach to their minutes of settlement or separation agreements a standard mediation/arbitration agreement and have it executed at the same time that the minutes of settlement or separation agreement is signed. Although it may force the parties to address issues in the arbitration process that they would prefer to defer until the need for secondary arbitration becomes more clear, by executing the mediation/arbitration agreement up front the dispute resolution approach will satisfy the terms of the Arbitration Act and thereby regain enforceability.

It may also have the added benefit of ensuring that the parties fully understand what they are agreeing to when they include a dispute resolution clause in their separation agreements and orders. If all family law mediators or arbitrators were to adopt the same mediation/arbitration agreement, that would make this task much less onerous for counsel and more likely to be adopted.

While changes to the Regulation to the Arbitration Act would make the entire problem disappear, there seems to be little interest among policy-makers in making such changes.

Lorne Wolfson is a Toronto mediator and arbitrator with Torkin Manes. He represented the respondent in Horowitz v. Nightingale. Lawyers, mediators and judges often include in their family law settlements or orders a term that issues regarding the interpretation, implementation, or future variation of the settlements or orders shall be determined through mediation/arbitration with a mediator/arbitrator to be agreed upon by the parties. This can be an effective mechanism to resolve issues that arise subsequent to the settlement or order. However, a recent decision by the Ontario Superior Court has thrown into doubt the viability of this process.

In Horowitz v. Nightingale 2017 ONSC 2168, the parties signed minutes of settlement in which they resolved all issues except support. They agreed that the support issues would be resolved through arbitration with Mr. G. Shortly after the minutes were incorporated into a court order by Justice Heather McGee (and the wife had taken the benefits of its property terms), the wife fired her counsel and refused to proceed with the arbitration.

The husband brought a motion pursuant to s. 7(1) of the Arbitration Act to stay the court action on the ground that the parties had agreed to arbitrate the remaining issues. Justice Clifford Nelson accepted the husband’s argument that the provisions of the minutes of settlement providing for arbitration constitute an “arbitration agreement” under the Arbitration Act. However, he dismissed the husband’s motion on the grounds that the arbitration agreement did not satisfy the technical requirements of the Regulation under the Arbitration Act (screening for domestic violence, agreement on appeal rights, execution by the arbitrator, etc.). He relied, in part, on wording in Justice McGee’s order which he found anticipated a further arbitration agreement.

While likely technically correct, Justice Nelson’s decision will make the resolution of family law cases more difficult. In recent years dispute resolution clauses have become standard terms in most separation agreements. They provide the parties with a simple and cost-efficient method of resolving future disputes, thereby keeping these cases out of the courts. Dispute resolution clauses may provide for parenting co-ordination for custody/access disputes, determination of Section 7 expenses, annual variation of support and other minor issues that the parties cannot resolve themselves. If dispute resolution clauses are not enforceable, then the settlement of all family law cases will become more difficult.

Justice Nelson was not insensitive to the policy implications of his decision. He noted: “From a policy point of view, I am mindful of how important it is in family law to hold parties to their agreement. It is also important to have options such as arbitration and mediation/arbitration for parties who wish to opt out of the litigation process. Getting parties to agree on both process and substantive issues is, after all, an important function of case management. Had there been no formal requirements necessary, and had Justice McGee and the parties themselves not recognized the need for and importance of a formal arbitration agreement, I may have been persuaded to stay the court application or deal with the apparent breach of court order in some other manner.”

Does Horowitz v. Nightingale mean the end of secondary arbitration? Not necessarily. Well prepared counsel could attach to their minutes of settlement or separation agreements a standard mediation/arbitration agreement and have it executed at the same time that the minutes of settlement or separation agreement is signed. Although it may force the parties to address issues in the arbitration process that they would prefer to defer until the need for secondary arbitration becomes more clear, by executing the mediation/arbitration agreement up front the dispute resolution approach will satisfy the terms of the Arbitration Act and thereby regain enforceability.

It may also have the added benefit of ensuring that the parties fully understand what they are agreeing to when they include a dispute resolution clause in their separation agreements and orders. If all family law mediators or arbitrators were to adopt the same mediation/arbitration agreement, that would make this task much less onerous for counsel and more likely to be adopted.

While changes to the Regulation to the Arbitration Act would make the entire problem disappear, there seems to be little interest among policy-makers in making such changes.

Lorne Wolfson is a Toronto mediator and arbitrator with Torkin Manes. He represented the respondent in Horowitz v. Nightingale.

TORONTO, ON – May 4, 2017 – An Ontario Superior Court decision will lead to significant changes in the way family lawyers and their clients negotiate their settlements, says Lorne Wolfson, Chair of the Family Dispute Resolution Institute of Ontario (FDRIO).

It is currently relatively standard practice for lawyers negotiating separation agreements to include a clause providing for mediation-arbitration of possible future disagreements on implementation or interpretation of the agreement. However, in the case of Horowitz and Nightingale, Justice Nelson sitting in Newmarket declined to enforce such a provision on the basis that the formalities of entering into a private arbitration regime, as required under Ontario’s Arbitration Act, had not been followed.

“The decision will definitely lead to more work and expense upfront for those clients wishing to agree, when they finalize a separation agreement, to a future mediation-arbitration dispute resolution mechanism,” says Mr. Wolfson.

“On the other hand, it is probably the best practice for lawyers to take the steps Justice Nelson is requiring them to take, to ensure that their clients fully understand what they are getting themselves into, at the time they are agreeing to it,” says Mr. Wolfson.

For a full summary of the case, see below.

Horowitz v. Nightingale – The End of Secondary Arbitration or
New Best Practices for FDR Professionals?

Lawyers, mediators and judges often include in their family law settlements or orders a term that issues regarding the interpretation, implementation, or future variation of the settlements or orders shall be determined through mediation/arbitration with a mediator/arbitrator to be agreed upon by the parties. This can be an effective mechanism to resolve issues that arise subsequent to the settlement or order. However, a recent decision by the Ontario Superior Court has thrown into doubt the viability of this process.

In Horowitz v. Nightingale, the parties signed Minutes of Settlement in which they resolved all issues except support. They agreed that the support issues would be resolved through arbitration with Mr. G.

Shortly after the Minutes were incorporated into a court order (and Respondent had taken the benefits of its property terms), the Respondent terminated her counsel and declined to proceed with the arbitration on the issue of support.

The Applicant brought a motion pursuant to Section 7(1) of the Arbitration Act to stay the court action on the ground that the parties had agreed to arbitrate the remaining issues. Justice Nelson accepted the Applicant’s argument that the provisions of the Minutes of Settlement providing for arbitration constitute an “arbitration agreement” under the  Arbitration Act. However, he dismissed the motion on the grounds that the arbitration agreement did not satisfy the technical requirements of the Regulation under the Arbitration Act (screening for domestic violence, agreement on appeal rights, execution by the arbitrator, etc.)

While likely technically correct, Justice Nelson’s decision will make the resolution of family law cases more difficult.

In recent years, dispute resolution clauses have become standard terms in most separation agreements. They provide the parties with a simple and cost-efficient method of resolving future disputes, thereby keeping these cases out of the courts. Dispute resolution clauses may provide for parenting coordination for custody/access disputes, determination of Section 7 expenses, annual variation of support, and other minor issues that the parties cannot resolve themselves. If dispute resolution clauses are not enforceable, then the settlement of all family law cases will become more difficult.

Does Horowitz v. Nightingale mean the end of secondary arbitration? Not necessarily. Well prepared counsel could attach to their Minutes of Settlement or separation agreements a standard mediation/arbitration agreement and have it executed at the same time that the Minutes of Settlement or separation agreement is signed. Although it may force the parties to address issues in the arbitration process that they would prefer to defer until the need for secondary arbitration becomes more clear, by executing the mediation/arbitration agreement up front the dispute resolution approach will satisfy the terms of the Arbitration Act, and thereby regain enforceability.

This would have the added benefit of ensuring that all parties to these agreements actually understand the implications of doing so and are providing truly informed consent to the mediation-arbitration process. One of the recurring problems that arises in this field is that of parties not fully appreciating all the implications of agreement to a future med-arb dispute resolution provision. Being forced to put their minds to all of the details at the time they agree to the term might benefit parties, counsel and arbitrators alike.

If all family law mediators or arbitrators were to adopt the same mediation/arbitration agreement, that would make this task much easier for counsel and more likely to be adopted. This is a task that FDRIO is currently undertaking among its membership.
 

By Lorne Wilson & Hilary Linton

Christie Blatchford’s recent stories of those feeling unfairly treated by the family courts are compelling. Indifferent judges. Biased laws. Tragic endings. Concludes Blatchford: “‘The family law system is broken”.

We who provide family dispute resolution services see things differently. Our large, diverse group of professionals sees a more positive version of this “broken” system. We have formed a not-for-profit, The Family Dispute Resolution Institute of Ontario (FDRIO), to tell that story.

Blatchford writes about truly dysfunctional divorces in which the spouses can only relate to each other by fighting at any cost. We see these people, too. We often help resolve their disputes long after they have spent all they have on legal fees. We wish they would have come to us sooner.

It is convenient to blame the lawyers-sometimes justifiably. But lawyers are required to take instructions from their clients. We see people spending $200,000 to obtain a worse outcome than what they could have negotiated in mediation or collaborative law. Their kids usually pay the highest price for wars waged by such parents.

But the real story is this. The vast majority of separating Canadians resolve their family law disputes peacefully, affordably, and in a way that allows their children to live happy and healthy lives. Not as interesting as Blatchford’s stories, but the family law system is not as broken as you might think.

We know this because we are among the hundreds of skilled, affordable family dispute resolution professionals who resolve these cases every day. Some of us do it as family mediators working in the courts Blatchford describes, where hundreds of cases are settled each year with free and subsidized mediation, available to virtually every separating couple in the province. Others of us do it as privately hired mediators, arbitrators and collaborative professionals.

Perspective Matters

It is a truism that few are ever happy with the result of family litigation. Blatchford accepts her subjects’ stories without input from the other spouse, lawyers or court record. Rarely do the parties even tell the same story. And family law is complex. Often people don’t understand the legal principles or why the court ruled as it did. Judges cannot write letters to the editor.

As family lawyers, mediators, arbitrators and educators we have a good vantage point from which to assess the validity of these criticisms and to offer some comments on the state of the family law system.

Need for Triage

A person who walks into a hospital cannot demand a particular course of treatment. A nurse takes a detailed history and refers the matter to a doctor for assessment of the appropriate interventions. Family courts should operate the same way, aiming to keep as many out of court as possible. After triage (starting with assessing risk of domestic violence), potential litigants should be referred to options including counselling, mediation, assessment, or arbitration. Only if there is no suitable out- of- court option should litigation be used.

Unified Family Court

For over forty years, every study of the family justice system has recommended that the Unified Family Court be expanded across the province. This single change would allow litigants access to more support and would ensure the same judge hears their entire case.

Progress

Significant progress is happening. Family Law Information Centres in family courts have Information & Referral Coordinators who, for free, provide a vast array of support and information for separating couples. Free and subsidized family mediation programs across the province are universally rated very highly. Counselling, legal advice and supports for victims of violence are now available through the Family Court Support Worker program.

The number of “self-reps” in family court (over 70% in some) is a significant problem. Judges spend too much time explaining procedure to unrepresented parties, leaving insufficient time to deal with trials, motions and case conferences. But here too, there is progress.

The recommendations of the Bonkalo Report (to expand the use of family law paralegals) may assist those who cannot afford lawyers to be better prepared and to understand the court process. Legal Aid Ontario has introduced Certificates specifically for those in mediation— meeting a real need. But income thresholds are still too low and funding continues to fail to meet demand.

There are real challenges and we cannot stop seeking answers. But there is also a lot that is working well and getting better. Blatchford’s stories are important to hear and more important to be placed into context.

Lorne Wolfson is a Toronto family lawyer, mediator and arbitrator at Torkin Manes LLP. He is also the Chair of FDRIO.

Hilary Linton is a Toronto lawyer, mediator and arbitrator with Riverdale Mediation Ltd. She also operates Toronto’s court connected family mediation service, mediate393.ca.

Our Standards of Practice were drafted with a clear sense of the importance of ethical FDR practice.

Deanne Sowter recently wrote “part II” in a series of posts for the Winkler Institute, which explores the Ethical and Professionalism dilemmas within Family Law. This post concludes her most recent findings. You can find her first post here, her second post here, and her third post here. 

This blog post, which results from a fantastic round table process on FDR ethics, is a good read!

Justice Canada has produced a new video to help families going through divorce or separation. The transcript and accessible version of this video are available on the Department of Justice Canada’s website.

When it comes to access to justice in family law, Ontario leads the way. The province funds extensive free (in court) and subsidized (out of court) family mediation. To learn more about the services offered province-wide, see this video interview with Toronto’s family information and mediation service provider and FDRIO director Hilary Linton.