Arbitration is a form of dispute resolution where parties refer their disagreement to a mutually acceptable, knowledgeable and neutral third party and agree to be bound by that arbitrator’s decision.
Arbitrators are essentially “private judges” hired by the parties to decide their case, as opposed to going through a trial before a judge in a public court.
Ontario’s Arbitration Act, 1991 permits parties to enter into binding arbitration with their own, personally selected arbitrator, rather than using the court system. There are some specific rules for privately arbitrating Family Law disputes, including power balancing considerations and screening for domestic violence, but aside from cases where that is a concern, there is no reason why parties cannot use a qualified arbitrator just as easily as a judge, in the court process, to present their evidence and have a decision made for them. In the case of Estate disputes, which can involve several members of a deceased person’s family or competing beneficiaries, the private Arbitration process can also be considerably more efficient. Increased efficiency and speed leads to lower costs.
Family Law and Estate disputes pursued in the court system can often take many years to complete. The Rules of Procedure which govern court cases impose many steps and hurdles to complete before a trial can take place. This adds cost and delay, and once a case is ready to be tried it will be put on a trial list and parties have to wait until their case is reached on that list. Trial sittings in Ontario generally are scheduled for a few weeks at a time, on a quarterly basis. Criminal matters and child protection cases get priority on such lists, with the result that other matters considered less urgent sometimes get “bumped” to a later sittings, causing more delay.
However, with arbitration, these same disputes can be resolved in a matter of months, with less intermediate steps.
In the court system, every appearance by lawyers at a step in the proceedings, with all of the documentation and preparation required for that step, adds cost. In an arbitration process, the parties can avoid several of those steps and agree with the arbitrator on ways to shorten and expedite the process, resulting in substantial cost savings. The time spent by a privately retained arbitrator must be paid for, of course (usually shared by the parties) whereas a judge’s salary is paid by the government. Even so, the savings achieved in other parts of the process usually outweigh the cost of hiring the arbitrator.
Arbitration is conducted in private and the details may only be made public with the consent of all parties to the dispute. There are no court filings and no documents accessible in a public court record. This can ensure that confidential information and personal matters do not become public knowledge or become available to business competitors and others, as could potentially happen within the public court system.
If your dispute involves a complex matter, such as unusual asset valuation questions, taxation issues, unique aspects of the farming industry, business or corporate reorganizations and estate freezes, you and the party with whom you are in dispute may choose your arbitrator on the basis of expertise and experience in that field.
There is no guarantee that a publicly appointed judge assigned randomly to your case will have the background to fully appreciate or understand such evidence.
The arbitration process is commenced once all parties to a dispute sign a contract, called an Arbitration Agreement, with their arbitrator. This contract outlines the specific issues the arbitrator is being retained to decide for them, and the process which will be followed for their arbitration. The parties can decide together with the arbitrator if evidence will be presented by witness testimony given in person with a court reporter present, or by sworn affidavits, or by an agreed statement of facts or other process. Rights to cross-examine witnesses, how final arguments will be presented and other aspects of the arbitration process can all be customized by the parties as they deem most appropriate for their particular dispute.
When the evidence and argument portion of the Arbitration is completed, the arbitrator will prepare a written decision, called an “Award”. The Arbitration Act, 1991 requires an arbitrator to deliver his/her award within 30 days. The arbitrator’s Award can then be used to take out a court Order based on its terms, and can be enforced like any other court Order. Judges are permitted considerably longer to write their decisions after a trial, and it is not uncommon for people to have to wait 3 to 4 months (and sometimes more) to receive the judge’s decision.
