Private Arbitration FAQ’s

MVC Private Law

Private Arbitration FAQs

 What is Private Arbitration?

Private arbitration is an agreement between parties to a dispute to have that dispute settled by a neutral arbitrator instead of going to court.

What kind of disputes can be resolved by private arbitration?

Most civil (non-criminal) disputes that might otherwise go to court can be resolved cheaply, efficiently and privately through arbitration. Examples include contract disputes, wrongful dismissal or other employment-related claims, personal disagreements among family members, property disputes, disputes between companies, shareholder and partnership disputes, agricultural disputes, disputes concerning non-profit organizations, insurance claims, personal injuries or other tort claims, farm generational transition disputes, harassment claims, construction disputes, and the like.

In fact, most modern commercial contracts, including contracts with public agencies, contain a clause that specifically requires the parties to resolve their disputes by mediation and/or arbitration instead of going to court.

There are a few exceptions, for example, labour disputes or certain international law disputes are excluded from commercial arbitration because there are special arbitral forums for those kinds of cases. Divorces cannot be granted by an Arbitrator, but the parties can resolve the property, custody, access and maintenance issues by mediation and then proceed with an uncontested divorce.

And, of course, the main difference between private arbitration and a lawsuit is that the parties must agree to have their differences settled by arbitration. As mentioned, many commercial contracts these days specifically provide that disputes must be settled by mediation and/or arbitration.

Is the Arbitrator’s decision legally binding?

Yes it is. An Arbitrator’s decision (called an “award”) can be registered with the Supreme Court of Nova Scotia and is enforceable as an Order of the Court.

Is there a limit on the dollar amount that can be involved in a private arbitration, as there is in Small Claims Court?

No. There are no monetary limitations under the Commercial Arbitration Act on either the amount involved or on general damages claims.

How does an Arbitrator decide a case?

Arbitrators are governed by the arbitration rules chosen by the parties and they are required to adhere to a set of legal standards known as the “rules of natural justice”, which provide for fairness to all parties. Arbitrators hear evidence under oath from the people involved and their witnesses. Hearing are generally less formal than those used in court. Arbitrators apply the law to the facts before them as it is found in statutes and judicial rulings in similar cases, just like a judge would if the case went to court.

What are the rules and how long does it take?

The rules are straight forward and efficient. Parties can chose between the Expedited Arbitration Rules and the standard Arbitration Rules, or some combination of the two. The Expedited Arbitration Rules are very speedy and less costly. Hearings are required within 15 days and decisions are usually rendered within 30 days of the appointment of the Arbitrator. In more complex cases, the standard Arbitration Rules are generally used. In either case, arbitration is much more efficient and much less expensive and less complex than trials in a court and there is no doubt that arbitrations are much, much quicker. The Arbitration Rules are prescribed by the Commercial Arbitration Act and you can view them on this website.

Do I need to hire a lawyer for an arbitration?

The Arbitration Rules say that a party can be “represented or assisted by any person during an arbitration”. I strongly encourage each party to have the arbitration agreement reviewed by their own lawyer before it is signed and many lawyers do, of course, handle arbitration cases, but it is not a requirement that parties have lawyers in arbitration cases.

Can the Arbitrator use mediation techniques during an arbitration?

Yes. In fact is it quite common and the Commercial Arbitration Act specifically provides for that. Mediation can take place at any time before or even during an arbitration hearing. Mediation provides an opportunity for the parties to discuss and reach a mutually-agreed settlement. If the parties are able to reach a mediated settlement during arbitration, the Arbitrator writes it up in the form of a “Consent Award” for the parties signatures. If the mediation is unsuccessful, the arbitration hearing resumes and the Arbitrator will make a binding decision.

Are the media or other spectators entitled to attend arbitration hearings as they are with Court proceedings?

No. Private arbitrations are exactly that – private. The Arbitration rules specifically provide for confidentiality. The media and the public are excluded. Unlike Court decisions, the Arbitrator’s decision is not released by the Arbitrator to the public, to the media or to anyone who is not a party.

How do I know that the private Arbitrator is going to be fair?

Professional arbitrators earn their reputations by being fair. Arbitrators must be independent and impartial between the parties. While the Arbitrator can explain the arbitration procedure to the parties, the Arbitrator cannot provide legal advice to either party about the matter. Arbitrators must disclose any reasonable apprehension of bias to the parties, before and during the arbitration process.

How is arbitration different from mediation?

In a mediation the mediator assists the parties themselves to reach their own settlement, if that is possible. In an arbitration the arbitrator decides the dispute for the parties after hearing testimony from both sides. There is a combined approach, called a Mediation-Arbitration, or Med-Arb for short, where the parties try to reach a settlement with the arbitrator acting as mediator and, if that is not successful, the arbitrator will decide the case. Med-Arbs are becoming quite common for private, commercial and labour disputes.

 

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