Arbitration – Legally Binding Decisions Without Court

Over the last few weeks, we’ve discussed various ways to resolve family law disputes without resorting to court litigation. We’ve looked at negotiation and mediation, the two most customizable methods falling under alternative dispute resolution (ADR). This week, we provide a crash course on the least flexible of ADR methods: arbitration.

How Does It Work?

Arbitration falls somewhere between mediation and court litigation. As in mediation, arbitration calls for a neutral third party to resolve the dispute, but a key difference lies in the powers available to this individual.

Whereas a mediator simply facilitates the discussion, an arbitrator has actual decision-making authority. However, the arbitrator may decide only on matters that the parties agreed to arbitrate — nothing beyond and never on matters that fall under a court’s jurisdiction, such as granting a divorce order. Unlike in a court case, the parties entering into arbitration have the freedom to select the arbitrator of their choice.

An arbitration session functions somewhat similarly to a court proceeding. Both sides have the chance to explain their case, call on witnesses, present evidence and ask for a specific outcome. After weighing the facts, the arbitrator makes a decision that’s legally enforceable – but under certain conditions.

Caveats And Conditions

The law imposes a number of stipulations that, if followed, make an arbitrated decision binding on the involved parties. Once started, the disputing parties may not withdraw, but must continue through to the end of arbitration and accept the arbitrated decision. Participants may be able to appeal this decision, but the conditions and process must be set out before the arbitration process begins.

Both sides must prove that they received independent legal advice about arbitration and the consequences of entering it. Additional, each party must also separately undergo screening for evidence of domestic violence or significant power imbalances that could skewer the fairness of the process.

Of note, arbitrators in Ontario are not regulated. Some are lawyers, but depending on the nature of the dispute, an arbitrator could be a business valuator, a parenting coordinator or another professional outside of the legal profession. Since courts will only enforce arbitration awards that were made based on provincial or territorial law, it’s therefore crucial for participants to choose a competent and knowledgeable arbitrator.

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