05/31/2018
Is Arbitration right for your dispute?
The past few years has introduced the world to Alternative Dispute Resolution or ADR. The Ontario courts have, with a long backlog of civil claims, promoted the use of ADR and it has been quite successful. In fact, most civil actions do settle out of court. While ADR is not entirely without its anxious moments, participants in ADR are able to, relatively efficiently, put the dispute behind them and move on with their lives. Its been a positive change.
Most common, has been mediation. The disputing parties engage a mediator they agree upon and the mediator attempts to assist the parties in resolving the issues of disagreement. While less intimidating than court, it is rarely accomplished without some serious stress. And… every mediation I have attended was prefaced by a lecture from the mediator on the costs down the road of not settling. These costs can be scary and quite persuasive in achieving a settlement.
Arbitration is a little more court like but with less anxiety. Not unlike mediation, the parties engage an arbitrator, ideally one who knows something about the subject matter in dispute. That way you don’t waste time training the arbitrator. Like mediation, the process is confidential as is the result (if you so choose). The proceedings are usually held in a meeting room rather than court. That alone relives a great deal of anxiety from the participants. The rules can be as simple or complex as you like and agree upon. Typically, evidence is presented through examination of witnesses either by your legal counsel or another person representing your side of the claim. Your opponent gets to cross examination the witness on the evidence and repeat the process with their own witnesses. Expert evidence is allowed if the parties and the arbitrator agree and accept that it is needed to reach a decision. While it is not a “trial”, the decision by the arbitrator is normally binding on the parties and, while it can be appealed to the courts, an appeal may not be successful. Just because you don’t like the arbitrator’s answer, doesn’t mean you get to do it all over again in court. You’ll need the court’s permission and they may well be reluctant to overturn a decision that has been decided by an arbitrator who is both experienced in the process and in the subject matter. Normally, the process must be seen to be unfair before the court will look at it.
There is an emerging ADR area known as Med-Arb. The order is very important. If a Mediator begins hearing each side’s case strengths and weakness, private issues may be disclosed – issues that an arbitrator may not need to know and which could bias the arbitrator. In addition, the other side would not have an opportunity to cross examine the content of those discussion if the mediator became the arbitrator. My advice is, if you want to arbitrate, do so from the outset. You can always switch to mediation – but not back again. The Arbitration Act does not permit that.
Whether mediation or arbitration is right for your claim really depends on the type of claim you have. I believe that mediation can get it settled. Arbitration can get it right. Hopefully a good arbitrator with subject matter expertise will arrive at the right decision for you.
Jerry is a Professional Engineer, Chartered Arbitrator and Qualified Mediator, has worked in the Ontario Construction industry for more than 40 years and chaired a civil tribunal for more than 20 years. He is the founding principal of Arbitech Inc. and can be reached at [email protected]
