June 2002

Notice to Mediate
(Residential Construction) Regulation

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This bulletin provides general information concerning mediation of disputes. For additional information that is specific to mediation of family disputes, you should also see the bulletin called Family Mediation.

The Notice to Mediate process
The Notice to Mediate process enables any party to residential construction actions in the Supreme Court to make an informed assessment that mediation would be productive and then to require the other parties to attend a mediation session.

Some jurisdictions have imposed a blanket obligation to mediate all, or selected, civil cases. The Notice to Mediate process differs from this approach because the requirement to mediate is initiated by a party to the action.

The Notice to Mediate process was first introduced as a dispute resolution option for motor vehicle actions in April 1998 (see DRO bulletin "Notice to Mediate Regulation [Motor Vehicle]"). In the four years since it was introduced, the process has been used in more than 6,000 actions. In approximately 74 per cent of the actions mediated under the Notice, all issues were resolved. An additional 10 per cent of actions settled after delivery of a Notice but before the mediation session. The success of the Notice to Mediate in this context raised the possibility that a similar process could be applied to different forms of disputes.

The Barrett Commission report
Commissioner Dave Barrett submitted his report, The Commission of Inquiry into the Quality of Condominium Construction in British Columbia: The Renewal of Trust in Residential Construction, to the provincial government in June 1998. In it, he observed that the traditional adversarial process has not worked well in complex residential construction disputes:

The litigation system does not serve the homeowner well...The delays and expense are detrimental to defendants as well as plaintiffs.

Every [court] case the commission was told about had taken much longer than the parties wanted - and was still unresolved. Legal expenses were another serious problem for strata councils and condo owners. In many cases the legal bills appeared to be as onerous as the estimated cost of repairs.

The Commission recommended that the proposed Homeowner Protection Act make available an alternative dispute resolution option for disputes arising from the problems surrounding residential construction. In response to this recommendation, section 29 of the Homeowner Protection Act enables government to make regulations for the mediation or arbitration of residential construction disputes.

After the Homeowner Protection Act was passed in July 1998, the Dispute Resolution Office of the Ministry of Attorney General consulted with representatives of homeowner associations, the construction industry, the insurance industry, the bar, and the mediation community to determine what form of alternative dispute resolution option should be used for residential construction disputes. A number of those consulted had experience with mediation, including the Notice to Mediate process established for motor vehicle actions. There was a very broad consensus that a form of Notice to Mediate process, modified to accommodate the residential construction context, would be appropriate.

The Notice to Mediate (Residential Construction) Regulation
The Notice to Mediate (Residential Construction) Regulation came into force in May 1999. The regulation provides that "any party to a residential construction action may initiate mediation in that action."

Questions and answers about the Notice to Mediate process for residential construction disputes follow.

Contact for more information

Dispute Resolution Office
Ministry of Attorney General
PO Box 9222, Stn Prov Govt
Victoria, BC V8W 9J1
Tel: 250 356-8147
Fax: 250 387-1189
E-mail: AG.DRO.Victoria@gov.bc.ca
Web site: www.ag.gov.bc.ca/dro

Enquiry BC will forward long distance calls at no charge:

• in Vancouver, call 660-2421
• elsewhere in B.C., call 1-800-663-7867

When you call, ask to be connected to the Dispute Resolution Office, Ministry of Attorney General.

Questions & Answers

What is the Notice to Mediate process?
The Notice to Mediate is a process by which any party to a residential construction action in the Supreme Court may compel all other parties to the action to mediate the matters in dispute. Authority for the Notice to Mediate (Residential Construction) Regulation is contained in section 29 of the Homeowner Protection Act. The regulation came into force in May 1999.

What is mediation?
Mediation is a process for resolving disputes. Two or more parties to a dispute meet and attempt, with the assistance of a mediator, to settle the matters in dispute. The mediation takes place in a private, informal setting where the parties participate in the negotiation and design of a settlement. The mediator has no decision-making power; the dispute is settled only if all of the parties agree to the settlement.

Does the Notice to Mediate (Residential Construction) Regulation apply only to actions involving "leaky condos"?
No. The Notice to Mediate can be used in connection with any Supreme Court action involving residential construction. "Residential construction" is defined as construction, renovation or repair of a building, or a portion of a building, that is intended for residential occupancy.

Can the Notice to Mediate be used in connection with any Supreme Court residential construction action, or is it limited to actions commenced after the regulation came into force?
The Notice to Mediate can be used in connection with any residential construction action, regardless of when it was commenced.

At what stage in the action can the Notice to Mediate be used?
The notice can be used at any time after an action has been commenced, but no later than 180 days before the date set for trial, unless the court orders otherwise or all parties consent.

Are there any exemptions to use of the Notice to Mediate process?
Yes. Exemptions to the Notice to Mediate process are allowed in certain limited circumstances, such as when all parties have already participated in a mediation session in relation to the same dispute, or if a judge orders that one or more parties is exempt from attending the mediation. Also, the notice can only be used once in connection with the same action, unless the court orders otherwise.

What if a party uses the Notice to Mediate to trigger early mediation and the full extent of the damage or the cost of repair is not known?
If the full extent of the damage or the cost of repair is not known, there is little likelihood that a settlement will be reached in mediation, and there is no point in one party compelling the other parties to mediate. This is a critical factor to consider in deciding whether, and when, to use the Notice to Mediate. Also, a party may apply to the court for an adjournment of the mediation, and the court has wide power to order an adjournment to a later date on such terms and conditions as the court considers appropriate.

How does the Notice to Mediate process work?
The party who wishes to initiate mediation delivers a Notice to Mediate to all other parties to the action. "Party" is defined as including an insurer of a party to the action. Within 21 days after the notice has been delivered to all parties, the parties must jointly agree upon and appoint a mediator. Within 60 days after the appointment of the mediator, a pre-mediation conference must be held, unless the pre-mediation conference is waived by all parties. The mediation must occur within 150 days after the mediator's appointment, unless all parties agree to a later date or a later date is ordered by the court.

What is a pre-mediation conference?
A pre-mediation conference is an organizational meeting at which such matters as pre-mediation disclosure of documents, obtaining and exchanging expert reports, and scheduling are considered. Because residential construction disputes can be very complex and involve many parties, such an organizational meeting may assist the mediation process.

What happens if the parties cannot agree on the choice of mediator?
If the parties themselves are unable to agree upon a mediator within 21 days, any party may apply to a roster organization designated by the Attorney General to appoint the mediator. The British Columbia Mediator Roster Society has been designated as a roster organization for this purpose. The Society maintains a list of trained and experienced mediators who have agreed to subscribe to a code of mediation conduct. For more information, contact:

British Columbia Mediator Roster Society
311 - 895 Fort Street
Victoria, BC V8W 1H7
Victoria Phone: 250-381-9006
Toll-Free Phone: 1-888-713-0433
Fax: 250-381-9022
E-mail: mediators@mediator-roster.bc.ca
Web site: www.mediator-roster.bc.ca

If a party applies to a roster organization for appointment of a mediator, do the parties have any opportunity for input into who will be appointed?
Yes. The process that a roster organization must follow in selecting a mediator is set out in section 4 of the Notice to Mediate (Residential Construction) Regulation. Briefly, the process is as follows:

• Within seven days of a party applying to a roster organization, the roster organization must deliver to all parties an identical list of at least six possible mediators.
• Within 10 days of receiving the list, each party may delete from it up to two names to which he or she objects, and each party may number the remaining names in order of preference.
• Within 10 days of receiving the list, each party must return the list (with names deleted and/or numbered to indicate preference, or with no changes made) to the roster organization. If a party fails to return the list within 10 days of receiving it, the party is deemed to have accepted all of the names on the list.
• The roster organization then has seven days to appoint a mediator, taking into account a number of criteria, including the preferences indicated by the parties. Other criteria to be considered by the roster organization are:
  • the need for the mediator to be impartial,
    
  • the qualifications of the mediator,
    
  • the mediator's fees,
    
  • the mediator's availability, and
    
  • any other consideration likely to result in the selection of an impartial, competent and effective mediator.

Can the roster organization select a mediator whose name was not on the list delivered to the parties?
Yes, but only if all of the names on the list are deleted by the parties.

What happens if one of the parties simply refuses to participate in the mediation?
If one party fails to comply with a provision of the Notice to Mediate (Residential Construction) Regulation, any of the other parties may file a Declaration of Default with the court. If this occurs, the court has a wide range of powers, such as staying the action until the defaulting party attends mediation, or making such orders as to costs that the court considers appropriate.

Do I have to use the Notice to Mediate if I want to have my dispute mediated?
No, but in order for the dispute to be mediated (without using the Notice to Mediate), all parties must voluntarily agree to the mediation, and this includes agreeing on a mediator.

If all the parties don't agree to voluntary mediation, what is the point in forcing unwilling parties to mediate? Isn't it a contradiction to require someone to mediate?
The Notice to Mediate requires the parties to attend a mediation session; it does not require them to settle the dispute. The experience in many other jurisdictions, and the experience with B.C.'s Notice to Mediate for motor vehicle actions, is that mediation works even when a party is forced to mediate. The Notice to Mediate process for motor vehicle actions has been in place in B.C. for four years. In that period it has been used in over 6,000 actions, with a settlement rate of approximately 74 per cent in mediation. A further 10 per cent of actions settled after delivery of a Notice but before the mediation.

Who pays the mediator, and what will it cost me?
The cost of the mediator will be shared equally by the parties, unless the parties agree to some other cost-sharing arrangement. The hourly rates of mediators vary, and this is a factor to consider in selecting a mediator. You will also have to pay for your lawyer if he or she represents you at the mediation.