Law Times

lAw Times • April 19, 2010 FOCUS PAGE 13 Evaluating new expedited arbitration process BY JUDY VAN RHIJN For Law Times alded at the time as "the future of arbitration," the results so far show the project has promise. It was a request from a frus- trated client that gave Allan Stitt, president of ADR Chambers, the impetus to come up with the ex- pedited model. "A business person came to me with a contractual dis- pute with a supplier worth about $100,000," he says. "He said there would be many similar disputes in the future and he didn't want to just give in but he needed a quick and easy process to deal with it." His suggestion that Stitt flip a coin was in all seriousness. "He said that on the flip of a coin, the result would be the same as if it went to arbitration 50 per cent of the time, so his only worry was the other 50 per cent. Of that 50 per cent, there would be a fantastic result for him — better than the outcome he would have got from arbitration — 50 per cent of the time. So only in 25 per cent of the total cases would he get a worse result than a long drawn-out arbitration would have given him, and that was a risk he was willing to take." Stitt argued with him about the principles of justice and the like, but the more he argued, the more he had to concede that the client had a point. He wanted a re- sult that was fast, inexpensive, and didn't tear apart his relationship with an important supplier. Eventually, Stitt told him he I could reduce the 25-per-cent risk to about five per cent or less with an expedited model. "I'm not say- ing the process will get the same result as a long drawn-out arbi- tration every time, but in a lot of cases, when you reduce it to the bare bones, it will," Stitt says. "And the benefits so outweigh the small chance of a different result that it's worth it." The standard model, outlined on the ADR Chambers web site, starts with the parties opting in and quickly choosing an arbitra- tor or having one appointed for them. From that point on, there are strict limits on everything, in- cluding the length of the plead- ings, the number of documents, and the page length of those doc- uments. There are no preliminary motions. The parties, who have a maximum of two witnesses, sub- mit direct evidence by affidavit. The hearing is to take no lon- ger than a day. It starts with a half-hour opening followed by one hour of cross-examination of the witnesses. There is a one-hour closing. At the end of the hearing, the arbitrator delivers a decision with reasons. The whole process, from the selection of the arbitra- tor to getting a decision, takes less than three months. The cost is less than $6,000, which includes the arbitrator's fee, the charge for the room, and taxes. David Bleiwas, a partner at Morrison Brown Sosnovitch LLP, stumbled across the guidelines on the ADR Chambers web site. At the time, he had a matter he knew was definitely headed for arbitration. "It was a fairly simple one-issue matter where time was t's been a year since ADR Chambers introduced its expe- dited arbitration process. Her- of $100,000 to $200,000 where it looks complex, so the cost of court proceedings compared to the amount of the dispute is just ridiculous. This way, they can re- solve it at a fraction of the cost by presenting it in a concise way." Stitt believes the strictness of the rules is key to the model's effectiveness. "The parties can change the limits by consent or agree to be subject to an ar- bitration appeal process, but why would they? The whole point is to get a quick and fi- nal result. The key is that after they buy in, there is no discre- tion for the arbitrator to change the limits except by consent or under a provision for absolutely extraordinary circumstances, such as family circumstances." Now, after one year of opera- tion, Stitt is able to review the idea. "While we've certainly had our challenges keeping people to the time frame, there is no question that the buzz has been positive. I feel like we are where we were 15 to 20 years ago with mediation." LT 'The whole point is to get a quick and final result,' says Allan Stitt. of the essence," he says. "We had to determine the fair-market rent payable under a commercial lease for the renewal period. The lease provided that if the parties couldn't agree, it would go to arbitration." Bleiwas didn't find any difficul- ty in meeting the limits imposed. "Our case leant itself to the limits because of the facts. We didn't have to leave a lot of things out because of the page limits or the time limits on the cross-examination," he says, adding his client was happy with the fixed fee. "It wasn't the main consideration but it was one ele- ment that made it very attractive." Bleiwas' client was fairly so- phisticated, having been through litigation before and well aware of how time can drag on and costs can mount. "He said, 'Win or lose, we need to know,' as do other businesses who are planning for the future and need to know what their expenses are going to be for budgeting purposes." Stitt emphasizes the model can be flexible to suit a particular case. An in-writing arbitration or final- offer selection with no reasons are available as well. "Or we can make it even more refined and cheaper by working with the lawyers to adapt the process before they buy in," he notes. That's exactly what happened in Bleiwas' case. "The rules are a great guideline for resolving the matter quickly [and] cost- effectively with a limited amount of evidence," he says. "We stuck to most of that, but our process wasn't quite as fast because the Christmas holidays intervened, so we built in some extra time." The guidelines also didn't al- low for expert evidence. "Ours was a case where the only evi- dence that mattered was expert evidence," Bleiwas points out. "There were not many disputed facts. The parties agreed that it would serve our purpose to at- tach an expert's report to a short affidavit explaining who the expert was and have the expert available for cross-examination." Bleiwas believes the process could also be effective when there are more issues and complexities. "I would certainly recommend it again, but you are always at the mercy of the other side agreeing. Until lawyers are drafting arbitra- tion clauses with this specifically in mind, you need both parties to share a desire to get a quick answer and a fair answer." Stitt emphasizes the pro- cess isn't ideal for cases with lots of details and millions of dollars at stake. "It's for disputes Why pay extra for your legal news? Cutting-edge legal affairs, news and commentary for just 44¢ a day! 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• Cover
• Restricted Mobility
• Paying The Piper
• Focus On ADR/Mediation