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ALTERNATIVES TO COURTS
Mediation
Mediation is typically a non-binding, confidential, and
"without prejudice" (meaning the discussions that take place
may not subsequently be used in court) process where the
parties to a dispute attempt to negotiate a resolution with
the assistance of a neutral third party. The parties can
enter into such a process voluntarily at any time, prior
to or during the conduct of a lawsuit. In the province of
Ontario, a mediation can also be required to take place
by the court. In Toronto, in civil matters, the court typically
requires that mediation take place prior to allowing a trial
to proceed.
Mediation can be an extremely cost-effective way to resolve
a dispute as compared to a trial process. It takes much
less preparation and the neutrality of the forum allows
for direct discussion between the parties which otherwise
typically does not take place. Even in situations where
the mediation is involuntary, that is, ordered to take place
by the court, a resolution can often be achieved in this
forum.
An additional advantage is that in most contexts, the parties
can choose their mediator, and the style of mediation. For
example, a mediator may be asked to neutrally evaluate the
strength of the parties' respective positions as an aid
to determining an appropriate settlement. In other cases,
the mediator's role can be much more directed toward assisting
the parties to communicate effectively to find common ground
where they may be unable to do so directly.
In Toronto, there are many well qualified mediators available,
including retired judges and senior lawyers, as well as
others who may be experienced mediators but not lawyers.
The biggest disadvantage to mediation
is that, in the event it is unsuccessful, the expense and
time involved often can't be recovered. As well, there may
be a risk associated with disclosure of information in the
course of a mediation that might otherwise not be disclosed,
or disclosed at that time, even though the information cannot
be used in that form at trial. In other words, even though
your opponent may not be able to use information disclosed
in a mediation in court, your opponent may still gain an
advantage from simply knowing that information.
Arbitration
Arbitration also involves a neutral third party, however,
unlike in a mediation, the third party has the power to
impose a binding decision upon the parties to resolve their
dispute. In this respect it is much more similar to an actual
court proceeding than a mediation. Where it differs from
court is that, within limits, the parties to the dispute
have a great deal of flexibility in defining amongst themselves
the process by which the arbitration will take place, as
well as the subject matter of what will be disputed. Therefore,
and for example, the parties can agree on streamlined processes
for exchanging documents and information, and upon a timeline
that may be much more expeditious and much less expensive
than the same process would require in court.
As in a mediation, the parties can choose their arbitrator,
and one significant advantage is that even though the arbitrator
imposes a binding result (unlike a mediator) the process
and resolution can still be kept confidential. This is not
usually the case in court proceedings, which are typically
public. So an arbitration allows parties to a dispute to
get a binding resolution, while at the same time keeping
their dispute from the outside world, which may be of benefit
to both.
Arbitrations typically arise in one of two ways. In the
commercial context, parties to a contract may agree that
disputes relating to the contract will be resolved by arbitration,
so that what is to be arbitrated and the procedure governing
the arbitration is agreed to in advance. In any context,
however, the parties to a dispute can agree to arbitrate
whenever they have a dispute they prefer to resolve in that
fashion.
Arbitrations have the disadvantage that
their effectiveness is only as good as the agreement under
which the arbitrations take place. New issues that may arise
in mid course cannot necessarily be included if the arbitration
agreement does not provide for them in advance, for example.
As well, sometimes the interpretation of an arbitration
agreement can raise issues that ultimately have to be addressed
by the court. So in some cases you can wind up in court
anyway at the end of the day.
In Toronto, as with mediators, there are many well qualified
arbitrators available, including many of the same judges
and senior lawyers who are available for mediation purposes.
In addition, some arbitration services have existing rules
and regulations that may be adapted and adopted for any
given case - lending a degree of predictability and credibility
to the process that might not otherwise be available.
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Lloyd's view: As always, the specifics of
any particular dispute determine whether it lends
itself to mediation or arbitration, and when. The
first point is to be aware that these options exist.
Personally, I prefer mediations to arbitrations. They
are simpler to do and lead to negotiated results more
frequently than one would normally expect, even where
they are imposed by the court rather than entered
into voluntarily.
It is, however, important that a mediation be undertaken
at the right time. Typically, both the parties and
the mediator can be more effective in the negotiation
after sufficient information has been exchanged in
a law suit to permit a proper evaluation of the strengths
each side has in its case. In some kinds of disputes
this can happen relatively easily and quickly (an
example is an insurance case where the issues are
largely contingent on the interpretation of medical
records) and in others (commercial disputes may fall
into this category) more extensive disclosure and
discovery is required first.
As well, it is important to get the right mediator
(or arbitrator) in any given case. Considerations
include the mediator's style as well as background
and experience. Ideally, the mediator is someone who
is known to and respected by all of the lawyers involved,
if not the parties themselves. The mediator has to
have credibility with everyone at the table in order
to function well and facilitate a settlement.
Choosing when to mediate or arbitrate, and choosing
with whom to mediate or arbitrate, are both parts
of intelligent litigating.
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