Dispute Resolution Reference Guide

The Mini-trial

Dispute Resolution Series
Practice Module 3
Produced by Dispute Prevention and Resolution Services
Department of Justice, Canada

I. What is a mini-trial

The mini-trial is in essence a structured negotiated settlement technique. Although designed like an expedited trial, it is actually a means for the parties to hear the other side's point of view and attempt a negotiated settlement. If a settlement is not reached, one benefit of the mini-trial is that the parties have already prepared a significant amount of their cases which will be useful for any subsequent trial. Although there are many variations, the mini-trial in its most common form involves a brief presentation of each parties' case to a panel made up of senior party representatives with authority to settle. The panel is chaired by a neutral, selected jointly by the parties. At the close of the hearing, the neutral recommends a specific outcome. The other panel members then attempt to negotiate a resolution, with the evidence presented during the mini-trial and the recommended outcome serving as a basis for the negotiations.

The parties establish the powers of the neutral in the mini-trial agreement and are free to define this role as broadly or narrowly as they wish. Among other things, the neutral may be empowered to:

The mini-trial is an entirely voluntary process. As such, one will enter into a mini-trial only upon consent of all of the parties. If negotiations fail to result in a resolution, then parties are free to proceed to another method of settlement.

A hybrid process, the judicial mini-trial, is also used at the provincial level. A judicial mini-trial shares most of the characteristics of the private mini-trial with a few obvious modifications. First, it is suggested to the parties by a judge during the litigation process. If parties and their counsel consent, counsel will present each side's case in an expedited hearing to the judge who renders a non-binding opinion regarding how the dispute should be resolved. Parties then attempt to negotiate a settlement based upon that opinion. If settlement is not possible, the parties may continue with their court action. The judge who conducts the mini-trial will not sit as the trial judge and will keep his or her opinion of the case confidential. Judicial mini-trials are currently used in Alberta [1] and in British Columbia [2].

II. Characteristics of a mini-trial

A Mini-Trial is:

Voluntary:
Parties must expressly agree to attempt settlement through the mini-trial process. The agreement to undergo a mini-trial is generally set out in writing.

Private:
Despite its name, the mini-trial is a non-judicial, expedited procedure generally used in the commercial context. A panel, comprised of a senior executive from each party and one neutral, selected jointly by the parties, hears submissions from each side.

Informal:
There are no fixed procedural or evidentiary rules governing the process. Rather, the parties agree to a hearing schedule and decide upon a set of governing rules concerning discovery, evidence and witnesses. These rules are set out in the mini-trial agreement.

Assisted:
Following each party's presentation, the neutral panel chair issues a recommended, non-binding solution. The party representatives from the panel and their chosen advisors then attempt to negotiate a settlement based upon that recommendation. The neutral may be invited to serve as mediator or facilitator during those negotiations.

Consensual:
Generally, there is no obligation to settle during the mini-trial, nor is the opinion of the neutral binding. Rather, resolutions are achieved through consensus. The parties are free, however, to structure the process otherwise.

Informative:
Despite the fact that there is no guarantee of resolution, the preparation and execution of the mini-trial gives the parties a better understanding of their own case, as well as an understanding of the opponent's position. This is quite useful if the parties proceed to trial.

Confidential:
The mini-trial is generally a confidential process. In the federal context, the restrictions on divulging information and the requirement to disclose information pursuant to the Access to Information Act and Privacy Act must be complied with. For further information about the application of these Acts, please refer to the section entitled “Confidentiality: Access to Information Act and Privacy Act ” found in the Dispute Resolution Reference Guide.

III. How to use the mini-trial

1-When is a Mini-Trial Appropriate?

Before discussing the possibility of mini-trial with other parties, one must first ensure that one's own internal management and key personnel are amenable to the process. This begs the question, when is a mini-trial appropriate for the federal government?

First, as one must ask with all ADR procedures, does the dispute involve matters of public law, policy or legal precedent for which a final disposition from the court is required? If so, then a mini-trial is inappropriate.

Second, do the parties wish to retain control over the dispute resolution process? If the parties want a greater degree of involvement and control over the outcome than is typically allowed in an adjudicative process, such as arbitration, then a mini-trial is an option.

Third, is the dispute substantial enough to justify the effort and expense required for a mini-trial? Although the mini-trial is indeed faster and less expensive than litigation, it nevertheless entails a significant amount of preparation and cost. Have the parties first attempted to settle the dispute through face-to-face negotiations? Could this case be settled though negotiations at the senior management level? If so, then the cost of a mini-trial can be avoided.

Fourth, is the case comprised predominantly of disputed questions of fact? Questions of fact are always more amenable to consensual resolution processes than questions of law. Mixed questions of fact and law may also be appropriate for mini-trial if there is no need for a definitive judgment on the law. It is better if the legal rules concerned are relatively clear so that a resolution of the disputed facts may clarify the legal outcome.

Fifth, do the parties have a business relationship that they wish to maintain? The relative speed of this process and the cooperation required of the parties make it a useful tool in preserving a working relationship.

Sixth, are there numerous parties to the dispute? The formal structure of the mini-trial is a positive influence in multi-party conflicts.

2-Initiating the Mini-Trial Process

Once it has been determined that a mini-trial is appropriate, one must obtain the concurrence of the other party(ies). In general, a mini-trial is introduced later in the life of a dispute than other ADR processes, even after the commencement of legal proceedings. Nevertheless, since one of the primary benefits of the mini-trial is to save time and expense, it is best to initiate the process before a significant amount of the legal costs have been incurred.

Generally, it is legal counsel who suggests the use of the mini-trial. There is, however, an advantage to be gained in terms of the success of future negotiations if the client contacts the other party(ies) to suggest that perhaps they could “work something out together”.

One obstacle to initiating the process is the familiarity of the parties and counsel with the mini-trial. Obviously, parties will only agree to the process if they are satisfied that it is a fair and workable procedure. If the client or opposing party(ies) are uncertain, one could provide them with advice or literature on the benefits of the mini-trial. The process is far more likely to be successful if the parties are comfortable with it and knowledgeable of its advantages and disadvantages.

3-Identifying Party Representatives

In addition to client personnel who have been involved in the dispute and will assist counsel in preparing for the mini-trial, a representative of senior management must be selected who will sit on the panel with the neutral to hear each party's submission. This representative will also be responsible for negotiating a resolution with the other party representatives following the hearing.

This representative should ideally:

  1. be selected early in the process so that s/he can help draft the Mini-Trial Agreement -this will ensure that the process suits their needs;
  2. not be associated with the dispute - this will ensure a greater degree of objectivity in their role as panel member and negotiator;
  3. have the authority either to commit to any subsequent negotiated resolution or be able to specify how more senior commitment will be obtained.[3]

4-Choosing the Neutral

Although one can conduct a mini-trial without the assistance of a neutral, the process is greatly enhanced by having the neutral present. The neutral may:

  1. facilitate communication between the parties, particularly where the dispute is acrimonious;
  2. provide process assistance in drafting the Mini-Trial Agreement;
  3. make determinations on disputed discovery or evidentiary questions;
  4. act as chair of the panel during the hearing and keep the parties on schedule;
  5. issue a non-binding opinion at the close of the hearing regarding either basic strengths and weaknesses of each party's position or a possible outcome for the case;
  6. act as facilitator or even mediator during the subsequent negotiations;
  7. act as technical expert who gives non-binding opinions on fundamental, disputed issues.

The powers that the neutral exercises in any given mini-trial are determined by the parties and expressly laid out in the Mini-Trial Agreement. The nature of the role that the parties wish the neutral to play (eg. non-binding arbiter, mediator, technical expert?) will help determine where the parties want to look to select this key participant. The parties should clarify between themselves what this role will be before commencing the selection process.

5-Drafting the Agreement

The Agreement specifies the rules and procedure which will govern the mini-trial. Drafting the Agreement is obviously a critical step in the process, one which should be attended to carefully as it will influence the success of the process. One of the primary advantages of counsel and clients' role in crafting the Agreement is its resulting flexibility. Each element of the procedure may be structured by the parties to best fit the dispute at hand.

Counsel and party representatives should all participate in drafting the mini-trial agreement. The neutral may also lend important process assistance and may be given the authority by the parties to make a decision on any disputed procedural step. An experienced neutral may also be able to advise parties and counsel on what types of procedural choices work best.

What follows is a list of the essential elements to be included in a Mini-Trial Agreement.

  1. Description: Briefly describe the dispute and identify the issues in controversy.
  2. Neutral: How will the neutral be selected - it is important that a default mechanism be specified in the event that the parties cannot agree on the choice of neutral.
  3. Powers of Neutral: Specify precisely what the neutral will be empowered to do during the process. Allow for flexibility as the role required of the neutral may change as the proceeding progresses (eg. if communication breaks down, parties may realize that they want the neutral to act as mediator during the subsequent negotiations).
  4. Role of Party Representatives and Counsel: The role that panel members, other party representatives and counsel will play should be specified. For example, the agreement should establish who will be allowed to participate in the subsequent negotiations and in what capacity.
  5. Costs: How will costs be allocated.
  6. Location: Where will the mini-trial take place.
  7. Discovery: What type of discovery will be permitted prior to the hearing? Are witness depositions required? Do the parties wish to examine certain documents in each other's possession? It is advisable to mandate the exchange of essential documents, such as witness statements, evidence to be relied on during the hearing and position papers. A schedule for discovery should also be included.
  8. Position Papers: A document summarizing each party's position is very helpful. The agreement should specify the length and nature of such a paper in light of the case at hand. The date by which these papers must be exchanged should also be specified.
  9. Rules of Evidence: The parties may wish to specify their own evidentiary rules to govern the hearing, or may wish to leave such decisions up to the discretion of the neutral.
  10. Schedule: The precise agenda to be followed during the hearing must be carefully spelled out (See the sample Agreement in Annex B). The parties may want to include all or part of the following:
    1. Opening statements
    2. Rebuttal
    3. Witness statements
    4. Examination of witnesses
    5. Questions from panel members
    6. Closing statements
    7. Opinion from neutral
    8. Recess
    9. Timeframe for beginning and end of panel member negotiations and establish how much time should be allocated to each.
  11. Confidentiality: The parties should specify the degree of confidentiality they wish extend to the mini-trial. The parties and counsel should be aware of any restrictions imposed by the Access to Information Act and Privacy Act. Will there be a record made? Such agreements generally expressly prohibit the neutral from acting as a witness or expert for any of the parties during a subsequent, related proceeding.
  12. Settlement: How will an eventual settlement be recorded? Will it be in the form of a contract? a Memorandum of Understanding? or other? Who will be responsible for same?
  13. Termination: The Agreement can specify either what constitutes success or what constitutes such failure to progress that the mini-trial is deemed closed (eg. should a party fail to participate in good faith with the discovery schedule; or should the senior management representatives be unable to negotiate a settlement within 45 days following the close of the hearing; etc.).

A sample mini-trial agreement is found in this Module as Annex B. It includes some of the procedural details that will have to be addressed when drafting your own mini-trial agreement.

6-The Role of Counsel in a Mini-Trial

The role of counsel in a mini-trial is not unlike that during litigation. In general, counsel will prepare their client's case, handle discovery and the development of witness statements and position papers to be exchanged, and make an abbreviated presentation of the case before the panel. Unlike litigation, counsel also plays a fundamental role in drafting the Mini-Trial Agreement.

Counsel generally plays the role of advocate during the mini-trial. This differs from the more conciliatory or settlement-oriented role that counsel may play in other ADR procedures such as mediation or negotiation. In the mini-trial, it is the client representative who will be responsible for negotiating a settlement.

IV. Advantages of the mini-trial

As mentioned, the mini-trial is a settlement technique that aims to facilitate efficient and effective resolution of civil disputes. A few of the advantages to be gained through the mini-trial process are as follows:

V. Disadvantages of the mini-trial

Possible disadvantages of the mini-trial are as follows:

VI. Questions and concerns regarding the process

  1. Are these clauses and agreements enforceable?

    While arbitration clauses are now generally enforceable under provincial and federal arbitration acts (eg. Commercial Arbitration Act) as well as under case law, other methods are not governed by legislation. The courts, however, may be willing to uphold ADR agreements, first as a contractual obligation; second by likening the ADR agreement to an agreement to arbitrate, the latter being specifically enforceable; and third in recognition of the fact that public policy favours alternatives to litigation where these alternatives serve the interest of the parties and of judicial administration.

    Under the doctrine established in Scott vs. Avery (1856) 10 All E.R. 1121, 5 HLC 811, and repeatedly upheld by Canadian courts, [4] a valid clause committing the parties to submit to a mini-trial to resolve a particular dispute may well be enforced by the courts (Scott involved an arbitration clause, but the principle on which the House of Lords based its ruling applies equally well to other settlement processes). A party's success in enforcing the use of the mini-trial clause may well be improved by the addition of an express provision that no legal action may be brought until the mini-trial has been attempted in good faith. Note that one cannot compel a party to actually resolve a dispute through the mini-trial process.

  2. What rights of appeal flow from a mini-trial agreement?

    Because the mini-trial is consensual in nature, there is no right of appeal. It is obvious that a party cannot appeal from a settlement that the party itself willingly entered. If that willingness or knowledge of a party is in question, or if a problem arises as to the implementation of the agreement, then recourse lies with the court, not as a matter of appeal but as a question of first instance under contract law.

  3. Authority of the Government Representative to Agree

    One very important element of any collaborative process is the authority of all of the parties at the table to commit to an agreement, once reached. In the context of a mini-trial, this authority is required at the negotiating stage which follows the panel hearing. With many corporate parties, there may well be instances where an agreement reached during the creative process of negotiation is beyond the scope of the party's current mandate and the party is required to give but conditional consent pending ratification from the decision-making body of that party. The key in such a situation is to obtain that consent as quickly as possible so that the agreement that the parties worked so hard to craft does not fail for lack of momentum or commitment from the party requiring authorization.

    With the government as a party, however, agreement is often conditional. The government has a responsibility to represent a broader public interest and to ensure that statutory and policy requirements are met. For this reason, the government representative at the mini-trial may not be the ultimate decision-maker, depending on the circumstances of the case. This should not be taken as evidence of any lack of commitment to the process on the government's behalf, but rather an inevitable result of accountability obligations of a public entity.

    What one is left with then is the need for a rapid and definite procedure by which the government representative (and any other representative needing formal party approval) will seek ratification of the negotiated agreement from the appropriate decision-maker. This procedure can be set forth in the Mini-Trial Agreement.

Appendix A: Practitioner's checklist

  1. Is a mini-trial appropriate for this particular dispute?
  2. Is the commitment from senior management to undergo a mini-trial present?
  3. Are opposing parties and their counsel willing to undergo a mini-trial?
  4. Have senior management representatives been selected to sit on the panel?
  5. Do the representatives have the authority to settle? If not, is there a process in place to obtain ratification of the agreement reached?
  6. Have the parties selected a third party neutral to chair the panel?
  7. If the parties cannot agree on the selection of a neutral, has a default selection procedure been agreed to (eg. selection by a neutral organization or individual)?
  8. Have the persons who will present each party's position been selected?
  9. Have all essential elements of the Mini-Trial Agreement been considered?
    1. Can parties agree upon a schedule for the hearing?
    2. Has the role of the neutral been defined?
    3. Can parties agree upon a discovery plan?
    4. Will the proceedings be recorded in any way? If so, have the necessary provisions been made?
    5. Has the location for the hearing been selected?
    6. How will the costs of the process be divided?
    7. How will any eventual agreement be recorded?

Appendix B: Sample mini-trial agreement

BETWEEN Her Majesty the Queen in Right of Canada

AND (the “Contractor”)

Whereas Her Majesty and the Contractor are parties to a contract dated , and identified as (the “Contract”); and

Whereas a dispute has arisen between the parties concerning the Contract; and

Whereas the parties wish to attempt to resolve this dispute through a mini-trial;

Therefore the parties agree as follows:

  1. [Option] The Mini-Trial shall be conducted pursuant to the procedural rules agreed to by the parties, set forth in Annex A to this Agreement.

    [Option] The Mini-Trial shall be conducted pursuant to the rules of the [insert name of DR organization / centre or professional association];

  2. The Mini-Trial shall be conducted before a panel composed of one senior executive officer of each party who has settling authority to resolve the dispute (“designated party representative”), and one neutral advisor. The neutral advisor shall act as chair of the panel.
  3. The neutral advisor shall be chosen jointly by the parties. If the parties cannot agree upon the choice of a neutral within twenty days of the signing of this Agreement, then that neutral shall be chosen by . Any party may promptly disclose to the other any circumstances known to it which cast reasonable doubt upon the neutrality of the advisor chosen by the . Unless all parties agree otherwise, that neutral will not serve on the panel and a new one will be chosen.

    1. The parties shall equally bear the costs of the neutral advisor and any common administrative expenses. The parties are solely responsible for the costs of their own counsel and case preparation.

  4. The Mini-Trial shall be conducted at [place], in [city], Canada, within [eg.90] days of the signing of this Mini-Trial Agreement.
  5. [X, eg. 30] days prior to the date set for the Mini-Trial, each party undertakes to provide all other parties and the neutral advisor with copies of all documents upon which that party intends to rely during the Mini-Trial, with a copy of any written brief or position paper summarizing the party's position in the dispute, and a list of all witnesses to be called, if any and the name of the senior executive that will sit on the panel with the neutral advisor.
  6. If any litigation between the parties regarding this same dispute is pending, the parties shall not take any new steps in that legal proceeding during the course of this Mini-Trial.
  7. During the hearing, counsel or a designated representative from each party will present its case to the panel, with time for rebuttal, question period for the panel and the parties and closing remarks as follows:

    [Schedule with time for each presentation specified, according to the needs of the dispute at hand, (eg. 9:00 - 10:00 Her Majesty's Case; 10:00 - 11:00 Contractor's Rebuttal, etc.) (Mini-Trials may take from a few hours up to a number of days)

  8. There shall be no recording of the proceedings made.
  9. Within [X] days of the close of the hearing, the neutral shall render a non-binding opinion as to the resolution of the dispute.
  10. Within ten days following receipt of the neutral's opinion, the designated party representatives shall meet to negotiate a resolution of the dispute. If the parties agree, other party representatives or the neutral advisor may be present at those negotiations.
  11. All information exchanged during this entire procedure shall be regarded as “without prejudice” communications for the purpose of settlement negotiations and shall be treated as confidential by the parties and their representatives, unless otherwise required by law. However, evidence that is independently admissible or discoverable shall not be rendered inadmissible or non-discoverable by virtue of its use during the mini-trial.
  12. It is agreed that the neutral will neither represent nor testify on behalf of any of the parties in any subsequent proceeding between them.
  13. The Mini-Trial proceedings shall be deemed terminated either: (a) upon execution of a written settlement between the parties, or (b) upon the forty-fifth (45) day following conclusion of the Mini-Trial hearing, which date can be extended by mutual agreement of all the parties, or (c) upon receipt by the neutral advisor of written notice of withdrawal from one or more of the parties; whichever occurs first."