WHAT IS ARBITRATION?
Arbitration is a way for people to obtain final, binding, enforceable settlements of disputes in divorce, separation or business without going to Court. The purpose of arbitration is to determine a final decision on all matters brought to the arbitration. The Arbitrator's role is to act as a private judge.
In arbitration a neutral third party - the Arbitrator - imposes a binding enforceable decision on the parties to the arbitration. The Arbitrator controls the process - which can be as formal as a trial or as informal as mediation - and the outcome which is a binding enforceable decision.
What are the benefits of arbitration?Arbitration provides parties to a dispute with a final solution to those disputes. Arbitration also provides a significant saving in time and money over going to trial.
Generally the best solution to a problem is one worked out by the parties themselves but when impasses occur there comes a time when further mediation or negotiations are no longer productive. Arbitration offers the parties a chance to finish their dispute with an enforceable binding decision. Many people find arbitration more comfortable and less stressful than a court trial because they play an active role - attending the hearing on their own and presenting their own case.
The arbitration process is completely confidential.
Where is the arbitration held?The arbitration Hearing may be held at any location that is convenient and acceptable to the parties and the Arbitrator including the Arbitrator's office, the office of one of the parties or the offices of one of the lawyers.
What is the Arbitration process?The parties, their lawyers, witnesses, expert witnesses and the Arbitrator are the only ones who have a right to be present at the Pre-hearing and the Hearing. No one else may attend without the parties' and the Arbitrator's consent. What is said in the Hearing and the Arbitrator's Decision remain private and confidential.
Agreement to Arbitrate
If the dispute is based on a written contract that has an Arbitration Clause this is sufficient to start Arbitration and to require the parties to arbitrate. If there is a contract with no Arbitration Clause or if there is no contract governing the dispute - division of matrimonial assets for example - then the parties to the dispute will sign an Agreement to Arbitrate with each other and with the Arbitrator. The Arbitrator will also sign an agreement with the parties to set out the Arbitrator's fees and expenses and who is responsible for paying the Arbitrator.
After the various agreements with the Arbitrator have been signed a pre-hearing meeting is attended by all parties and the Arbitrator. This is where the parties formally ask for exactly what they want. At this meeting the parties might bring their lawyers if they have retained counsel. The Arbitrator will explain what needs to be done prior to the Hearing, instruct the parties to exchange ALL evidence in their possession to the other side, issue interim directives if necessary and discuss how the Hearing will proceed. The parties and the Arbitrator decide together how formal the hearing will be with the Arbitrator having the final decision. Finally a date and the number of days required for the Hearing is decided.
This is the "Trial" portion of the arbitration. Just like Court, the parties must clearly ask for exactly what they want and support their claims with the law, facts and arguments. Witnesses may be called and examined under oath. All parties have a chance to present their side of the issues, to explain what is important to their case and to ask questions of witnesses and of the other party. Unlike mediation the Arbitrator does not meet separately with the parties at any time.
How long is the arbitration process?The length of an arbitration process and the number of hearing days required depend on a variety of factors, including the complexity of the matter, how well the parties have prepared for the arbitration and how far they have progressed in settlement discussions.
As a general guideline though, after the Arbitrator has been selected an initial meeting is held to discuss what will be required at the Pre-hearing meeting and the Pre-hearing meeting is usually scheduled two to four weeks later. After the Pre-hearing meeting the Hearing is usually scheduled four weeks later to allow the parties to gather and exchange information and documents. The Hearing itself usually takes one or two days to complete unless there are a number of witnesses to be called or there are complex reports to be examined from expert witnesses. After the Hearing is complete the Arbitrator will usually render a decision, with reasons for the decision, within four weeks. As one can see, the parties to arbitration can expect their dispute to have a final enforceable decision within approximately three months of the start of the arbitration process.
How can parties prepare for arbitration?To get the maximum benefit from arbitration it is important to understand that the Hearing is basically a mini-trial. Before the arbitration, parties who are represented should work with their lawyers to prepare as though they are going to court.
Parties must consider these questions in preparing for arbitration:
- exactly what are the issues that you want the Arbitrator to decide?
- exactly what do you want for compensation? - an Arbitrator can not give you something you don't ask for, they may reduce the amount claimed but can not increase it.
- have you provided the other side with ALL documents and materials you plan to use well in advance of the Hearing?
- have you received everything you expected from the other side with adequate time for review?
- have you made proper arrangements for your witnesses to attend?
What is the Arbitrator's responsibility after the Hearing?After the Hearing is concluded the Arbitrator will weigh all evidence submitted by the parties on the issues submitted to arbitration and will write a final enforceable decision which will be made available to the parties.
Who pays for arbitration?Costs of the Arbitration are either decided by the parties to the arbitration in the Agreement to Arbitrate or they agree that costs are to be determined and apportioned by the Arbitrator.
Can an Arbitrator's decision be appealed?Generally no. However there are certain exceptions that allow an Arbitrator's decision to be appealed to Court namely:
- the Arbitrator had an undisclosed bias toward one party that affected the decision
- the Arbitrator erred with respect to a point of law that affected the decision
- the Arbitrator made a mistake in fact that affected the decision
- the Arbitrator's decision was GROSSLY unfair
To date courts have been hesitant to interfere with an Arbitrator's decision unless one of the above exceptions has resulted in an unjust decision. Furthermore the court has the authority to send the matter back to the Arbitrator for further consideration as directed by the court which may or may not result in an amended decision.
What is a lawyer's role in arbitration?Generally lawyers are present only at commercial arbitrations and separation and divorce arbitrations involving matrimonial property. The lawyer's role may include:
- preparing and submitting the Statement of Issues and a Statement of Claims
- preparing the client for effective participation in the arbitration session
- providing legal and strategic advice during the arbitration process
- participating in the arbitration process as an advocate
- presenting the law and supporting cases
- examining and cross-examining witnesses
- helping their client to understand the Arbitrator's Decision
- deciding whether or not to appeal an Arbitrator's decision and on what grounds