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     What is Arbitration ?      
   
Arbitration

Arbitration involves adjudication by a third-party neutral. Most arbitration is designed to be binding. Arbitration will in most instances arise from a pre-existing agreement to go to arbitration in case of a dispute, or it is based on the specific terms of an arbitration agreement entered into after the dispute has arisen. Unless otherwise agreed, the terms of the applicable Arbitration Act will govern.

Arbitration is a process where the parties to a dispute refer it to one or more persons (the "arbitrators", "arbiters" or “arbitration tribunal"), by whose decision everyone agrees to be bound. It is a resolution technique in which a third party reviews the evidence in the case and imposes a decision that is legally binding for both sides and enforceable.

Arbitration is often used for the resolution of commercial disputes, particularly in the context of commercial and international transactions. The use of arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts.

Arbitration has a number of advantages over litigation, court hearings, and trials. First, it is less adversarial than litigation. The parties in arbitration have the opportunity to fully participate in the proceeding and are more likely to collaborate instead of escalating hostilities, as often happens in litigation. It is also usually cheaper than going to court, simply because the process is faster and less complicated than full litigation. 

Arbitration is also more flexible. Parties need not have to wait weeks, or even months to be given a set court date, which cannot be changed for fear of waiting another extended period of time. Arbitration hearings are set around the schedules of the parties, which may even include evenings and weekends.

While the rules of evidence usually apply in arbitration cases, they are not as rigid or complicated. Processes can be negotiated between the arbitrator(s) and the parties to their mutual satisfaction. Arbitration eliminates most of the peripheral steps found in litigation, such as discoveries, interrogatories, requests for documents, and so on. This alone results in considerable savings and lessened hostilities.

Arbitration hearings are usually confidential, and parties can agree to keep the results of the hearing private. This is a considerable advantage over litigation if the matter in dispute is embarrassing or might reveal proprietary information if made public.

 

Arbitration FAQs

What is Arbitration?

Arbitration is a process where disputing parties agree to present their issue to a neutral arbitrator or panel of arbitrators rather than going to court.  The arbitrator, or panel of arbitrators, takes on the role of a private judge and has the authority to resolve the dispute by issuing a final and binding decision. 

What can arbitration resolve?

Most contracts for the provision of goods or services contain a clause to address what will happen in the case of disputes. The majority of these clauses specify that, in case of dispute, the parties to the contract will enter into mediation and/or arbitration. Arbitration is particularly effective in most types of contract dispute, disagreements between partners or shareholders, construction issues, insurance claims and wrongful dismissal to name just a few. In fact most civil cases slated to go to court can likely be better arbitrated.  

Where are arbitrations held?

Arbitrations can be held in meeting rooms, boardrooms or even in large offices. The exact location for an arbitration hearing can be negotiated by the arbitrator and the disputing parties.  

How long does arbitration take?

As you might expect, the obvious answer is that it depends upon the complexity and parameters of each case. As a rule of thumb, count on several months you will need to prepare your case and compile the evidence you wish to present. The actual hearing often ranges from a day to a week. After that, it may take the arbitrator or arbitration panel a month or two to review the facts that were presented and render an award.

How much does arbitration cost?

That, too, depends upon the complexity and length of the arbitration. Depending on their qualifications and expertise, some arbitrators charge $2,000 to $3,000 per day. Others charge considerably less. You might also consider whether you are using a lawyer or an accountant, as well as travel costs and other miscellaneous expenses.

What are my roles and responsibilities in Arbitration?

While arbitration is less confrontational and more informal than litigation, it is still an adversarial process, somewhat similar to going to court.  Your roles and responsibilities may vary personally, depending upon whether you engage a lawyer to represent you. Either way, you must to present your case by producing credible evidence and documents that support your argument, call witnesses and make a strong personal appeal to the arbitrator to rule in your favor.  

Is Arbitration legally binding?
Yes.  When you and the other party agree to arbitration you lose the right to go to court.   Arbitration awards are legally binding and generally not appealable.

Yes.  When you and the other party agree to arbitration you lose the right to go to court.   Arbitration awards are legally binding and generally not appealable.

Is there a maximum or minimum limit to arbitration awards?

No. There are no monetary restrictions on amounts sought or on general damages.

Should I hire a lawyer for arbitration?

Just as some individuals choose to represent themselves in court, you may also choose to represent yourself in arbitration. However, depending upon the complexity of your case and the value of the award being sought, it is often advisable to be properly represented. You will be responsible for the costs of your own lawyer.

If I lose in arbitration, will I be responsible for the other party’s costs?

Although it is possible the victorious party will seek costs, it is generally held that each side pays for its own lawyer and expenses while evenly sharing the cost of the arbitrator(s) and peripheral costs such as meals and the meeting room. All of these things are generally discussed and agreed to prior to the start of the arbitration.

If an arbitration begins, is it too late to negotiate a settlement?

Absolutely not. It is never too late to settle.  A negotiated settlement is almost always preferred. In fact many arbitrators are also trained mediators. If not, you may ask for an independent mediator, you may allow your arbitrator to facilitate settlement negotiations, or your respective lawyers may negotiate for you in confidence. If you and the other party are can reach a mediated agreement your Arbitrator will draft a “Consent Award”, outlining the exact terms of your agreement for everyone’s signature. If attempts at mediation or negotiation are not successful, the arbitration will recommence.

Is arbitration confidential?

Yes. Arbitration is private and not open to anyone except the parties involved. The arbitrator’s final award is also confidential, unless you or the other party have to enforce the award in court, or in rare cases of appeal. 

How do I choose an arbitrator?

Both parties must agree to an arbitrator. In the case of an arbitration panel, each side usually selects an arbitrator, and the two arbitrators then select a third. If you do not know any arbitrators, your lawyer likely will. Also, you can obtain a list of neutral, qualified arbitrators from the ADR Institute of Alberta or the ADR Institute of Canada. Alternatively, feel free to contact the AAMS office and someone will be glad to speak with you.  

 

If I do not agree with the arbitrator’s decision, can I appeal? 

Generally the arbitrator’s award is final, binding and upheld by the courts. In very rare cases where there was clear bias or negligence on the part of the arbitrator, where there was an error in fact, or where there is new evidence you may ask the arbitrator to reconsider the award, or you may appeal to a court. 

 

 

 
 
     
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