Arbitration: A Valuable Alternative
On occasion, I am asked to act as a private arbitrator in the area of estates, trusts and capacity disputes through Hull Estate Mediation. Arbitration is similar to litigation in that it is an adversarial dispute resolution process overseen by a neutral third party. However, in arbitration, the trier of fact is the arbitrator instead of a judge. The parties also have a lot more control over the process and are granted the opportunity to choose who will arbitrate the dispute. For certain disputes, arbitration can be a preferred alternative to litigation and provide for efficient and timely resolutions.
In Ontario, arbitrations are regulated by the Arbitration Act (the “Act”). The Act provides a framework for the arbitration process, including the choosing of tribunals, the conduct of arbitrations, awards, terminations and remedies. The Act is somewhat unique, as it allows for the “contracting out” of almost all of its provisions though an arbitration agreement, defined as “an agreement by which two or more persons agree to submit to arbitration a dispute that has arisen or may arise between them.” These agreements are powerful and demand careful drafting, as they set out the provisions that bind the parties and the arbitrator.
Unless the arbitration agreement provides for a multi-member tribunal, the tribunal is made up of a single arbitrator. For multi-member tribunals, a chair is appointed whose decision is deferred to in the absence of a majority decision.
One of the most appealing aspects of arbitration is the freedom to pick and choose the appropriate procedures and protocols. Subject to some exceptions laid out in the act, the parties have the opportunity to decide on the format of the arbitration themselves. As arbitration allows for the formality of the court process to be avoided, it is often a more cost-effective and less time consuming endeavor than litigation.
The arbitrator or multi-member tribunal has the authority to make interim orders and deliver a final decision. The Act makes arbitration decisions (called “awards”) legally enforceable and subject to a limited right of appeal, which can be contracted out of as well.
Arbitration is also a more private process than litigation. Court proceedings and judicial decisions are generally open to the public while arbitration agreements often contain provisions that allow for the proceedings and award to remain confidential.
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