Arbitration vs. Mediation

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To start, we thought it would appropriate to remind everybody about the basics of arbitration, its purpose and general characteristics. At its core, arbitration is the private, judicial determination of a dispute, by an independent third party. An arbitration hearing may involve the use of an individual arbitrator or a tribunal. A tribunal may consist of any number of arbitrators though some legal systems insist on an odd number for obvious reasons of wishing to avoid a tie. One and three are the most common numbers of arbitrators. The disputing parties hand over their power to decide the dispute to the arbitrator(s). Arbitration is an alternative to court action (litigation), and generally, just as final and binding (unlike mediation, negotiation and conciliation which are non-binding). As we already know, the object of arbitration is to obtain a fair resolution of disputes by an impartial third party without unnecessary expense or delay. Parties should be free to agree how their disputes are resolved; subject only to such safeguards as are necessary in the public interest, free from the interference of judicial courts. Arbitrators, or Tribunal members, are commonly appointed by one of three means: 1. Directly by the disputing parties (by mutual agreement, or by each party appointing one arbitrator) 2. By existing tribunal members (For example, each side appoints one arbitrator and then the arbitrators appoint a third) 3. By an external party (For example, the court or an individual or institution nominated by the parties) Classifications Of Arbitration.

1. Commercial Arbitration is the most common of disputes. Just as it sounds, it is a dispute between two commercial enterprises. 2. Consumer Arbitration surrounds disputes between a consumer and a supplier of goods or services. 3. Labor Arbitration involves the settlement of employment related disputes. Such as classification is important as we will later see that, depending on the area of law in which it is used, arbitration may be the subject of varying perceptions and opposite public opinions. For the first part of this presentation, the focus will rather be on the traditional view on arbitration, by which it is generally perceived as a positive alternative to litigation. Indeed, the many benefits of arbitration have led to its extensive use as the process of choice for dispute resolution in commercial disputes. It is useful to consider the relative merits of arbitration against the Ontario court procedures as they currently exist and as we generally understand them. A. Selecting the Adjudicator

Perhaps the most important advantage of arbitration over litigation for domestic commercial parties is the ability to choose your own judge in a way which is not usually possible in court proceedings. There is a growing number of well-qualified and specialized arbitrators within Ontario and internationally. Arbitrators can be selected for their special skill and expertise in specific types of commercial law, civil engineering, or some other relevant discipline. This should be a significant consideration for commercial parties, since few judges in Ontario will have spent a significant part of their legal or judicial careers engaged in resolving commercial law issues. This may be less of a consideration for those parties in the Toronto Region whose disputes are eligible to be adjudicated under the Commercial List, as the judges who routinely hear these matters frequently have a high degree of familiarity with commercial law issues. B. Continuity

Aside from allowing the parties to select an appropriate adjudicator, arbitration provides greater continuity than litigation. The arbitrator or arbitration panel follows the case from beginning to end, whereas parties may be required to educate several different judges or masters as a matter proceeds through the courts. This can be a particularly frustrating experience for parties dealing with complex matters requiring...
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