Cioffi v. Modelevich et. al., 2018 ONSC 7084

Full Decision

In the recent decision of Cioffi v. Modelevich et. al., 2018 ONSC 7084, Justice Spies for the Ontario Superior Court of Justice found that an insurer is required to pay the full cost of mediation when a plaintiff requests a mediation under s. 258.6(1) of the Insurance Act.

Section 258.6(1) of the Insurance Act provides that where a plaintiff requests a mediation, the insurer shall pay the full cost of the mediation. However, pursuant to the Rules of Civil Procedure, and Regulations under the Administration of Justice Act, mediation is mandatory in a Toronto action, and costs of the mediation are to be shared equally between the parties.

Justice Spies found that there is a conflict between the Insurance Act and the Rules, and therefore the Insurance Act prevails by virtue of Rule 1.02, which provides that the Rules do not apply if a statute provides for a different provision. The Court agreed with the Plaintiff that there is in fact a conflict with respect to costs of the mediation. The Court held that it is clear intention of the Insurance Act to allow a plaintiff to request a mediation to be paid by the insurer in the hopes that the action might be resolved. The Court further commented that the legislation assumes that the insurer is in a better position to absorb the costs of mediation.

The Court rejected defence counsel’s argument that the mandatory mediation provision in the Insurance Act only applies to impecunious plaintiffs.

In this case, the Plaintiff requested a mediation pursuant to the Insurance Act in a letter to counsel for the insurer and referred to it a second time in an email to counsel before mediation was scheduled. The insurer did not object to proceeding under the Insurance Act. Although mentioned in the Endorsement, Justice Spies did not elaborate on this issue. It remains to be seen whether an insurer is obligated to pay for mandatory mediation if they object to proceeding under the Insurance Act.  

This decision will impact Toronto, Ottawa and Windsor – all of which have mandatory mediation practice directions. For now, it might be good practice to request mediations pursuant to the Insurance Act as a general practice in all jurisdiction.

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