[author: Mary Paterson]
Apologies as Dispute Resolution
In a perfect world, a sincere apology could help resolve a dispute quickly, restoring the good working relationship between franchisor and franchisee without litigation. But when your apology is not accepted and you end up before an arbitrator or judge, could your apology be used against you as an admission of liability? Historically (and currently in some provinces), the answer was yes, your apology was an admission of liability.
To reduce that risk when apologizing, seven provinces have passed legislation saying (essentially) that apologies are not admissible as evidence in civil court or arbitrations. The seven provinces are British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland and Labrador. In theory, the legislation encourages quick and effective dispute resolution by letting parties talk openly about what happened and permitting parties to “engage in the moral and humane act of apologizing.” 1
In practice however, the legislation has been applied rarely and unevenly. At the narrow end, the Court of Queen’s Bench of Alberta held that factual statements “stripped of apology words” may be admissible in Court. 2 In short, you can say you are sorry, but you cannot say what you are sorry for without risking making an admission. At the broader end of the interpretation spectrum, the Saskatchewan Provincial Court refused to consider an apology as evidence (but found the apologizer liable on the rest of the evidence). 3
It’s clear from the cases that apologizing has risks (even with the legislation), but what the cases cannot tell us is how many disputes were resolved through an apology before litigation started. Although there are risks associated with apologizing, there are also benefits, including potentially resolving a dispute quickly and maintaining a good working relationship. These potential benefits mean that franchisors and franchisees should at least consider incorporating an apology into their dispute resolution strategy.
If you find yourself in a dispute where you believe an apology may help you avoid or resolve litigation, consult your litigation counsel regarding:
the apology legislation in your province and what it permits and protects;
how to phrase your apology to ensure that the apology legislation will protect everything you say;
how to ensure that your apology is also protected as a without prejudice statement that cannot be used against you in court;
whether the apology will have any insurance implications; and
how to incorporate the apology into a settlement offer that includes a release.
If you have questions, please contact Mary Paterson, whose commercial litigation practice focuses on contract disputes in court or in arbitrations, including franchise disputes.
1 Uniform Law Conference of Canada Policy Paper on a Uniform Apology Act, 2007
2 Robinson v Cragg, 2010 ABQB 743
3 Bilan v Wendel, 2010 SKPC 148