The call came the day before a mandatory mediation. Defence counsel, her tone edged with concern, explained that she feared the plaintiff lacked litigation capacity.

The plaintiff was an 82-year-old woman who, at discovery months earlier, had given answers that suggested confusion and possible memory impairment. Her thick Jamaican accent had also posed difficulties, and defence counsel confessed she had struggled to understand her. Plaintiff’s counsel, however, would not agree to adjourn the mediation, maintaining his client had capacity. And as mediator, my authority was limited. Under Ontario’s rules, I had no unilateral power to postpone a mandatory mediation without the consent of all parties. The session proceeded.

But the experience raised broader issues that have lingered with me. Who, in our system, is the gatekeeper for determining whether a litigant has the capacity to proceed? Is it the responsibility of plaintiff’s counsel, defence counsel, or ultimately the court? Who should bring the motion for appointment of a litigation guardian? And what becomes of a settlement achieved in mediation if no incapacity finding has yet been made?

The Legal Framework

Ontario’s Rules of Civil Procedure^[1] set the structure. Rule 7 provides that a party who is “under disability” cannot take steps in a proceeding except through a litigation guardian. The phrase “under disability” encompasses minors but also adults who are incapable within the meaning of the Substitute Decisions Act, 1992^[2]. That statute defines incapacity in functional terms: does the person understand the information relevant to making decisions about the litigation, and can they appreciate the reasonably foreseeable consequences of those decisions?

The Rules give the court authority to halt proceedings if incapacity is suspected. A judge who sees cause for concern may stay the case until a litigation guardian is appointed. The Rules also require court approval of any settlement involving a person under disability before it becomes binding. The law is protective by design, reflecting a recognition that the right to sue or defend is fundamental, but it must rest on informed and voluntary participation.

The Role of Counsel

Lawyers are expected to be the first line of defense when capacity issues arise. Plaintiff’s counsel has an obligation to ensure their client can provide proper instructions. If the lawyer concludes otherwise, the duty is to bring the matter before the court. Defence counsel, too, cannot turn a blind eye. If there is real doubt, they may move for the appointment of a litigation guardian.

A striking example came in Huang v. Braga (2016 ONSC 6306, aff’d 2017 ONCA 268)^[3]. The plaintiff, Mr. Huang, was pursuing damages arising from an automobile accident. At trial, Justice Archibald observed that Mr. Huang had consistently refused what was, by any objective measure, a reasonable settlement offer. His explanations for refusing it were contradictory and illogical. The judge concluded this raised a genuine question as to whether Mr. Huang appreciated the consequences of his decisions. The court ordered a psychiatric assessment of his litigation capacity before the case could proceed. When the matter went up to the Court of Appeal, the order was left undisturbed. The facts in Huang demonstrate how the court will intervene where a litigant’s judgment appears impaired and their reasoning detached from reality, even if no formal finding of incapacity has yet been made.

The Court’s Gatekeeping Function

Courts retain inherent jurisdiction to protect vulnerable parties. Dawson v. Dawson (2020 ONSC 6724)^[4] illustrates this supervisory role in a family law context. The dispute arose between estranged spouses, one of whom suffered from mental health difficulties that affected her ability to instruct counsel. Justice Harper had to consider whether to appoint a litigation guardian under Rule 7 or instead proceed with the appointment of a section 3 “capacity counsel” under the Substitute Decisions Act. The judge emphasized that the Rules and the SDA are complementary: Rule 7 ensures no proceeding moves forward unfairly, while section 3 provides the court with the discretion to appoint a lawyer specifically to protect the interests of a person whose capacity is in question. The facts of Dawson—a bitter family dispute complicated by diminished capacity—show the court’s willingness to step in where neither side can resolve the dilemma.

The Enforceability Problem

If a settlement is reached in mediation before capacity is resolved, its enforceability is precarious. Rule 7.08 requires that any settlement involving a person under disability receive court approval to be binding. This safeguard is not merely procedural—it goes to the heart of consent. Without such approval, a settlement may later be challenged and even set aside if it emerges that the party lacked capacity at the time.

In practice, this means that if there is any doubt about a party’s ability to understand the terms of resolution, counsel should take steps to obtain either a litigation guardian or court approval.

Reflections from the Mediation Room

As mediators, we are not assessors of capacity. Our mandate is to facilitate dialogue and resolution. We cannot adjourn a mandatory mediation without the parties’ consent or a court order, and we cannot substitute our own judgment for a medical or legal finding of incapacity. What we can do is remain alert. If a participant appears confused, detached, or unable to follow the discussion, it is appropriate to flag the concern, remind counsel of their duties, and, if necessary, suggest that the matter may need to be referred to the court.

The day before my mediation, when defence counsel raised her doubts about the elderly plaintiff’s capacity, I had to decline her request to adjourn. That was not my power to exercise. But the incident reminded me that the system does provide safeguards, provided they are invoked. Lawyers have a professional duty to raise capacity issues; courts stand as the ultimate gatekeepers; and mediators, while not arbiters, must never lose sight of the question of voluntariness and informed participation.

Conclusion

Litigation is built on the assumption of capacity. Without it, the adversarial model falters. Huang v. Braga shows how illogical reasoning in the face of a generous offer can trigger judicial scrutiny. Dawson v. Dawson reveals the court’s readiness to balance Rule 7 with the protections of the SDA. Together these cases underscore a consistent theme: the justice system will not permit litigation to proceed—or settlements to bind—unless the vulnerable party’s ability to understand and appreciate their choices has been safeguarded.

For mediators, the lesson is not to overstep but not to ignore. We cannot decide capacity, nor can we adjourn proceedings on our own. But we can keep the issue alive, insist on clarity, and remind counsel that settlements reached in the shadow of unresolved incapacity are anything but secure. The rule of law requires more than the appearance of agreement—it requires consent that is real.