Arbitration is a form of dispute resolution where the disputing parties refer their disagreement to a mutually acceptable, knowledgeable, independent third party – an individual arbitrator or tribunal - and agree in advance to be bound by their determination following the presentation of each party's case. A tribunal may consist of any number of arbitrators, although, odd numbers are preferred to avoid a tie decision. Arbitration is an alternative to pursuing a court action, and generally, just as final and binding. This finality differs from mediation which is non-binding without the parties signing a settlement agreement.
Conduct of such arbitrations is governed by the Arbitration Act of Ontario and the Arbitration Agreement parties will be asked to sign before the process commences. There are several advantages to arbitration compared to utilizing the courts to resolve disputes. Firstly, arbitration is faster and less costly. Disputes pursued in court can often take many years. However, with arbitration, these same disputes can be resolved in weeks or months. Arbitration is also conducted in private and is only made public with the consent of all parties to the dispute. This can ensure that confidential business information and personal affairs do not become public knowledge and available to competitors and others that you may not wish to become privy to such information as would happen within the court system. Further, should the dispute involve a complex matter, you and the party with whom you are in dispute may choose your arbitrator on the basis of his or her expertise and experience in your field. This opportunity would not arise in pursuing a court action.
To ensure that their disputes are resolved quickly, economically and privately, parties to commercial agreements frequently rely upon arbitration clauses. Depending upon the wording of the arbitration clause, arbitrators have broad jurisdiction to adjudicate certain disputes and award remedies. However, certain disputes may not be determined by an arbitrator. In such cases, the applicable legislation only provides for the dispute to be resolved by the court. For assistance in settling your dispute and determining which forum is available to you for such resolution, please contact one of our lawyers experienced in alternative dispute resolution.
Mediation-Arbitration ("Med-Arb") is a hybrid form of dispute resolution process. The process combines mediation and arbitration, which are usually two separate forms of dispute resolution, into a single, two-step process. First, the parties agree with the impartial third party ("mediator") assisting them to work at resolving their dispute through mediation. Should the mediation fail to produce a settlement, the mediator's role will shift into that of an arbitrator who will make a binding decision on the issue. The main advantage of Med-Arb is the ability of the parties to obtain a quick resolution for their dispute with a minimum of expense and inconvenience. It reduces the costs and delays associated with educating a mediator about the issues and then doing it all over again for either an arbitrator or judge. It also retains the advantage inherent in mediation in that the parties can control the management of their dispute, which arbitration or litigation does not provide. However, resolution is certain given that if mediation fails a decision will be rendered by the arbitrator.