Dispute Resolution

Arbitration is an out-of-court form of dispute resolution where one or more impartial persons (the arbitrator(s)) make a legally binding ruling called an “award”. An award can then be enforced by the court, if necessary. Arbitration is widely used in a variety of disputes as a private alternative to litigation through the public courts, and where the parties were unable to resolve the dispute through negotiation or mediation.

In Canada, arbitration is regulated by statute. Provinces and territories have their own separate arbitration legislation. In Ontario, domestic (non-international) arbitration is governed by the Arbitration Act, 1991, while international commercial arbitration is governed by the International Commercial Arbitration Act, 2017.

While in some instances other legislation may require the arbitration of disputes, in the disputes we arbitrate, the parties have either agreed to submit their dispute to arbitration after the dispute arises, or they previously agreed to arbitration in a contract prior to the dispute arising.

Benefits of Arbitration

• Savings—Cost and Time — Many disputes can be resolved through arbitration within months after the process begins, whereas civil lawsuits in overburdened courts can take years to reach trial. Parties also have more control over time and cost when they choose arbitration because they are not bound by court rules, schedules, or processes.
• Choice — Unlike court, where the parties cannot choose the judge assigned to them, the parties can agree on and hire an arbitrator who is knowledgeable about their industry or type of dispute.
• Informal — The atmosphere of an arbitration is business-like yet less formal than a court proceeding. More relaxed rules of evidence help parties feel confident in presenting their case to the arbitrator, by videoconference, at a mutually agreeable site, or even in writing, at a time of their choosing.
• Finality — Unlike with court, the parties can agree beforehand not to appeal the arbitrator’s award, or to limit appeals.
• Privacy — With limited exceptions, if the parties don’t appeal the arbitrator’s award, the award, like the arbitration process itself, remains private and confidential—unlike court, which is open to public scrutiny.

Mediation-Arbitration (or med-arb) is a “hybrid” dispute resolution process offering the best of mediation (facilitated negotiation that can result in a voluntary settlement) and arbitration (the parties submit their dispute(s) to their chosen arbitrator to make an enforceable award). In med-arb, the mediator and arbitrator are usually the same person. Med-Arb is “a dispute resolution process in which the parties commit that they will:

• Attempt to settle their dispute through mediation (the mediation phase)
• Use binding arbitration to resolve any issues remaining after mediation (the arbitration phase)

*Source: ADR Institute of Canada (ADRIC) Med-Arb Rules, Version 1-June 2020

Benefits of Med-Arb

• Convenience — Even if the mediator and arbitrator aren’t the same person, the parties will have decided in advance who the decision-maker will be if they do not settle at mediation.
• Choice — Unlike court, where the parties cannot choose the trial judge assigned to them, the parties can agree on and hire their arbitrator. And while a judge may not have any expertise when it comes to the subject matter of the dispute, the parties can choose an arbitrator who does.
• Timing — The parties can often agree on med-arb either before their dispute arises (i.e. in a contract), after there is a dispute but before the mediation, or after mediation.
• Savings—Cost and Time — Med-arb is generally quicker and/or less costly than court. This is because the parties have more control over time and cost because they are not bound by court rules or schedules.
• Finality — The parties can agree that none of them will appeal the arbitrator’s award to the court. Compare this to a court proceeding where one side who is unhappy with a trial judge’s decision can almost always appeal it to a higher court, and sometimes beyond.
• Privacy — With limited exceptions, as long as the parties don’t appeal the arbitrator’s award, the arbitration itself remains private and confidential—unlike court, where the public is usually entitled to know everything about your business.
• Flexibility and Simplicity — The arbitration phase of med-arb can take many forms, depending on the parties’ needs and budget since court rules don’t apply. Some people might want a multi-day formal hearing with witnesses, some may want a shorter, less formal hearing, and others might opt for final offer selection where there are no witnesses, and the arbitrator just selects one of the parties’ final offers to settle.