With the rise in alternative dispute resolution methods over the past few years, it’s clear that many parties are looking for options other than attending court to resolve their legal disputes.
Alternative dispute resolution goes beyond processes that the general public might be more familiar with, like negotiation. For example, arbitration is a less familiar but commonly used alternative dispute resolution process that can help parties resolve legal disputes quickly and effectively.
So, what does arbitration look like? Below, we’ll discuss the arbitration process in Ontario at a glance.
What is Arbitration?
Arbitration is a form of alternative dispute resolution where the parties agree to have an “arbitrator” (a person or body designated to settle a dispute, much like a judge) decide the issue for them.
Arbitration is an alternative to attending court and, in some cases, a required step when working toward resolving a particular kind of legal dispute. One of the primary benefits of arbitration is that the process is confidential and more flexible than traditional courtroom processes.
When is Arbitration Used?
Arbitration is used in many different types of legal disputes.
For example, many administrative tribunals employ arbitrators to resolve disputes relating to their area of jurisdiction. Arbitration is also commonly employed in family law and commercial tenancy cases.
Arbitration and Arbitration Agreements
Arbitration is often deployed in response to an “arbitration agreement” clause. These clauses commonly appear in written contracts and require parties to resolve disputes relating to the contract through arbitration rather than pursuing the dispute in court. In some cases, arbitration agreements are enforceable even if they aren’t in writing (for example, where the parties to an oral agreement agree to arbitration in the event of a dispute).
It’s not uncommon to find arbitration clauses in many modern contracts. These clauses address how the parties to the contract will resolve future disputes relating to the contract. In the case of an arbitration agreement, typically, the parties will be required to resolve their dispute through arbitration rather than one party suing the other in court.
If you’ve signed a contract that includes an arbitration agreement, then you’ll likely be required to use the arbitration process to resolve disputes. However, as we outlined in a past blog post regarding the court’s enforcement of arbitration clauses, recent case law has questioned the enforceability of arbitration clauses in certain circumstances. If you have questions or concerns regarding an arbitration clause, speak with an experienced lawyer to determine your options.
What Does the Arbitration Process in Ontario Look Like?
The arbitration process in Ontario will look different depending on the legal issue. For example, as noted above, parties appearing before a specialized administrative tribunal may be required to have their issue decided by an arbitrator by default.
In other cases where the parties want an arbitrator to help them resolve their dispute, Ontario’s Arbitration Act, 1991, S.O. 1991, c. 17 applies. This legislation outlines how arbitration ought to be conducted in Ontario.
Below, we’ll provide a bird’s eye view of what the arbitration process typically looks like in Ontario. Remember, as noted above, that the relevant rules and processes applicable to an arbitration can vary depending on the circumstances.
Agreeing to Arbitration
Naturally, the parties must agree to arbitration before beginning the arbitration process. If the parties do not already have an arbitration agreement, they may sign an agreement outlining how they intend to resolve the dispute through arbitration. Relevant details might include the location of the arbitration, who the arbitrator will be, and what issues the arbitrator will address.
Selecting an Arbitrator
Unless outlined in an arbitration clause, agreement, or otherwise determined, the parties must select an arbitrator. Depending on the terms of the agreement, a third party is sometimes appointed to select the arbitrator rather than the parties themselves.
Ontario maintains a database of arbitrators. Depending on the type of issue, you may need to confirm that the selected arbitrator has the proper skills and experience to help determine the issue (in some cases, this is a legal requirement, as in the case of family law arbitrators).
Preparing for Arbitration
With the assistance of the arbitrator, the parties will prepare for an arbitration hearing. During this time, the arbitrator may require the parties to meet to discuss the issues, how the arbitration process will proceed and to exchange documents or evidence before the hearing.
Arbitration Hearings
An arbitration hearing can look similar to a courtroom hearing in that the arbitrator is an impartial “judge” and allows each party to present evidence regarding their case.
Unlike court hearings, however, arbitrations tend to be more flexible and less formal, meaning that the arbitrator can amend or streamline processes better to suit the parties’ needs (where appropriate).
Arbitration Decisions
After hearing the parties’ cases, the arbitrator will decide the case. The arbitrator’s decision is legally binding, and the parties are required to follow the decision.
Enforcing an Arbitrator’s Decision
Once an arbitrator has decided, it’s up to the parties to follow the decision. However, if, for example, one party is ordered to pay another party money but doesn’t follow through with the decision, the party who is owed money can apply to the court for an order enforcing the decision (Arbitration Act, 1991, S.O. 1991, c. 17, s. 50).
What if I Disagree with the Arbitrator’s Decision?
You may appeal an arbitration decision to the court under s. 45 of the Arbitration Act, 1991, S.O. 1991, c. 17, provided that the arbitration agreement allows for appeals. Remember that the court will only hear an appeal if the determination significantly affects the parties’ rights or if the importance of the matters to the parties justifies an appeal.
In limited circumstances, arbitration decisions can also be “set aside,” including where the arbitration agreement was invalid or where the arbitrator’s decision dealt with a matter outside the scope of the arbitration agreement (Arbitration Act, 1991, S.O. 1991, c. 17, s. 46).
The Arbitration Process in Ontario: Final Thoughts
Though the arbitration process in Ontario can look similar to traditional courtroom processes, the flexibility afforded by this method of alternative dispute resolution can be an excellent option for parties who need a more flexible approach to dispute resolution.
One of the most important aspects of arbitration is understanding the scope of an existing arbitration agreement. This document or clause will be critical in informing whether and how the parties will use arbitration regarding any disputes that arise (including the parties’ right to appeal an arbitration decision).
If you’ve entered into a contract containing an arbitration agreement and need to understand how it impacts your rights or require assistance navigating the arbitration process in Ontario, be sure to speak with a skilled alternative dispute resolution lawyer for guidance.
Skilled Ontario Alternative Dispute Resolution Lawyers
Tierney Stauffer LLP’s team of experienced alternative dispute resolution lawyers, mediators, and arbitrators has vast experience representing clients in alternative dispute resolution and providing professional mediation and arbitration services. If you want to explore alternative options for resolving a dispute or are required to attend a negotiation, mediation, or arbitration, our team has the knowledge and experience to support you. Call us at 1-888-799-8057 or contact us online to set up a consultation with an experienced lawyer.