In recent years, there has been a significant shift towards collaborative law and alternative dispute resolution (ADR) methods. Whether stemming from a contract or a will, parties increasingly opt for ADR, including mediation, judicial dispute resolution, arbitration, and hybrid methods like “Med-Arb,” combining mediation and arbitration if needed. The trend towards the use of ADR across various legal contexts underscores its adaptability and effectiveness, demonstrating its relevance not only in commercial disputes, but also in the nuanced landscape of estate litigation.
METHODS OF RESOLVING DISPUTES
In Alberta, counsel in estate disputes are obligated to discuss with clients alternative methods of resolving matters that are the subject matter of the application and to inform our clients of collaborative processes that might assist parties in resolving matters.1 In addition, the Alberta Rules of Court require parties to provide proof that they have participated in some form of ADR or applied for an exemption before setting an action down for a trial.2 ADR encompasses various methods to address conflicts without the formal procedures typical of traditional courtroom litigation. With knowledge of the benefits and drawbacks of each method, parties in a conflict can choose the appropriate method depending on the dispute, the parties involved, and the relationship between them.
- Mediation is where a neutral third party, known as a mediator, facilities communication between the parties in conflict to help resolve a dispute. The mediator assists the parties to identify issues, explore options and ultimately reach a voluntary agreement.
- Arbitration involves presenting to a neutral third party, known as an arbitrator, who renders a decision after considering the evidence and arguments presented on both sides. In contrast to mediation, arbitration concludes with a decision that is legally binding. Arbitration is widely used in legal disputes such as construction, employment, contracts, securities and general business disputes. The feasibility of arbitration in estate and trust disputes is evolving, and estate planning lawyers are starting to consider including clauses addressing arbitration in a testator's will.
- Med-Arb is a dispute resolution process that combines mediation and arbitration. Initially, the parties try to reach a settlement through mediation. If there are issues that are not resolved through mediation, an arbitrator makes a decision for the parties. The benefit of med-arb is if the parties reach an impasse, the arbitrator can make a binding decision.
- Judicial Dispute Resolution (JDR) is a mediation conducted before a selected JDR Justice, with the purpose of resolving disagreements so as to avoid trial. A JDR can be binding or non-binding. If a settlement cannot be reached in a binding JDR, the Justice can issue a binding decision. In most cases a JDR can only be requested once documents have been disclosed, questioning has concluded, and each party is satisfied that they are prepared for trial.
UNIQUE CHALLENGES IN ESTATES
Canadian jurisdictions are increasingly mandating or incentivizing ADR before allowing parties to resort to traditional court proceedings. While ADR clauses are common in contracts, estate matters pose unique challenges due to their non-contractual nature. A testator may want to mandate arbitration in his or her estate planning documents, but it is important to ensure the inclusion of all necessary parties in any form of ADR process – which cannot always be contemplated at the estate planning stage. This occurs because, unlike contracts, estate disputes encompass beneficiaries beyond those specifically named in wills or trusts. They may involve potential family members or individuals making claims against an estate, such as minors, beneficiaries unable to manage their affairs, disinherited spouses or adult interdependent partners, or creditors.3 The nature of a will or trust fundamentally differs from contracts; with the latter, all applicable parties may consent to the agreement and the use of mandatory arbitration.
While some wills or trusts may attempt to limit a beneficiary's legal recourse to litigate a matter in court, such clauses are not always enforceable, especially if a party to the will is disputing the validity of the will itself.
EMPOWERING THE PARTIES IN ESTATE DISPUTES THROUGH ADR
Estate disputes frequently involve emotionally-charged issues, such as a testator's mental capacity, undue influence, ambiguities in a will, or family maintenance and support claims – all of which can result in irreparable damage to relationships. The legal process to resolve the dispute can take a long time and be very costly for all parties, regardless of who wins or loses. Attempting ADR early in the process may assist in narrowing the true issues in dispute and allow for a confidential resolution before expending significant time and resources into a trial, the details of which are often publicly available. Parties to an estate dispute should not shy away from attempting ADR and doing so may provide a more expedient and cost-effective solution. This aligns with the growing acceptance of ADR and collaborative law, and provides a strong argument in favour of parties seeking resolutions prior to attending court. Moreover, given that will and trust disputes tend to be emotionally charged, the confidentiality that is implicit in ADR serves as an enticing alternative to airing one's family drama in court.
LEGAL LANDSCAPE AND FUTURE TRENDS
While parties to an estate dispute are at liberty to engage in ADR voluntarily, the enforcement of a binding arbitration is not clear for estate disputes. However, there is a trend in Alberta indicating that the judiciary is inclined to help facilitate early resolution of litigation in estate matters. The Court of King's Bench initiated a project with Justices conducting Estate Early Intervention Conferences (ECCs) to help facilitate early resolution in estate matters.4 The goal of the ECC program is to have appropriate issues diverted to mediation-like settings early on, so as to encourage fulsome settlement discussions between the parties, as well as discuss alternative avenues that may be more appropriate for the matter, prior to proceeding with the standard court process. This objective-oriented mediation aims to conclude with an agreement, which effectively ends litigation. However, if the parties are unable to resolve the issues, the matter may be set down for a court imposed resolution such as special application or trial.
There is no doubt that early estate conferences, mediation or potentially arbitration or Med-Arb may be effective in controlling what can be often overly oppositional and costly adversarial litigation processes.
PRACTICAL TAKEAWAYS
If you are considering including a mandatory dispute resolution clause in a contract, trust or a will, it is important to seek the legal advice of a lawyer who practices in this area. In addition, although parties involved in a dispute may be tempted to immediately commence legal proceedings, there are benefits to attempting a mediation, arbitration, or Med-Arb prior to doing so, provided applicable limitation periods are kept in mind. The use of ADR or an ECC not only provides the benefit of confidentiality, but it can save both time and expenses associated with litigating the issue.
Footnotes
1. Wills and Succession Act, S.A. 2010, c. W. 12.2, s. 4.
2. Alberta Rules of Court, Alta Reg. 124/2010 at Rule 8.4(3)(a) and 8.5(1)(a).
3. Wills and Succession Act, S.A. 2010, c. W. 12.2 Part 5.
4. Court of King's Bench of Alberta, “Estate Case Conferences” (02 February 2022), online (announcement): [https://albertacourts.ca/kb/resources/announcements/estate-case-conferences-(eccs)].
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.