Law Times

Page 8 April 10, 2017 • lAw Times www.lawtimesnews.com Arbitration underused to resolve commercial disputes BY MARG. BRUINEMAN For Law Times W hile courts largely remain the default venue to resolve commercial dis- putes, arbitration serves as an effective although underused alternative. What's important, however, for those looking to use arbitra- tion as a more efficient process is implementing strategies and developing a framework to avoid the costs and time that litigation would consume. The primary task is consider- ing arbitration in the first place. Sometimes, says Mitchell Rose, a former civil litigator who now works as a negotiator and medi- ator of civil disputes as a partner with Stancer Gossin Rose LLP in North York, Ont., there's a knee-jerk reaction for lawyers to simply pursue a lawsuit without considering other options. "We frequently give a lot of thought, I think, to settlement and mediation, which is good, but as lawyers, we often give less thought to alternative ways of resolving the case if we can't settle it at or outside of the me- diation context. And, often, we as lawyers are falling back on ingrained patterns of litigating though the public court system," says Rose. As an example, he points to the complex commercial case that requires days of examina- tions for discovery, the possibil- ity of interlocutory motions and probably days or weeks of trial. But when the two sides agree to engage in arbitration, there's a likelihood of substantially de- creasing the amount of time it takes to have the case resolved as well as reducing the number of attendances and narrow the issues. Neighbour disputes, he adds, are prime for arbitration. Arbitration might be valu- able for its privacy alone. As a process separate from public courts, arbitration pro- ceedings and the results of the proceedings could be kept con- fidential when the parties agree not to disclose contents of the pleadings and arguments. That is of particular interest to companies that don't want to expose detailed financial state- ments and trademarks. Other advantages include picking your own decision-maker that has subject matter expertise, choosing the approach, including using more relaxed rules, the type of hearing that will be held and deciding whether or not to have a right of appeal. "You have the ability to cus- tomize your own dispute reso- lution mechanism so that you can actually save a great deal of money and time," says Rose. Not every commercial dis- pute warrants arbitration, he warns. Both parties need to agree and it has to be a right fit. And in cases where there's a serious pub- lic interest, it might be necessary to go to a public court where a precedent could be set. The key is to employ effective strategies to resolve disagree- ments in a positive framework and avoid the costs and time the litigation would consume. That begins with case man- agement before, during and at the conclusion of arbitration, says Marvin Huberman, a certi- fied specialist in civil litigation and a chartered arbitrator in To- ronto. A procedural meeting with the arbitrator will set out the procedures, time frames and cutoff dates with a goal of bal- ancing discipline with f lexibil- ity. It also explores expedited procedures on pleadings, docu- ment production, number of witnesses, comprehensive wit- ness statements, a structure for examining and questioning wit- nesses, venue and page-length limitations in briefs if possible. Huberman seeks "a clear and unambiguous procedural order" to achieve the objectives of wider enforceability and f lexibility. When planning for binding arbitration, there are variations to choose from. Huberman points to a hybrid final arbitration approach in which the parties each submit a proposed monetary award to the arbitrator before its conclusion and then the arbitrator chooses one award without modifica- tion. The parties can also agree, privately without advising the arbitrator, that the award will be in a certain range no matter what the arbitrator's decision. There is also a process that results in the sealing of the arbitrator's deci- sion while the parties try to ar- rive at a settlement. If they're un- successful, the award is unsealed and becomes binding. "Commercial arbitration is a terrific way of resolving dis- putes, providing that it's appro- priate," says Huberman. That means having regard for the parties, the problem and the process, he says. "In arbitration, the parties generally have wider power to se- lect and tailor the procedures. As well, they can slim down and re- strict document production and oral examination and discovery and even forgo it," he says. A regime to limit costs can also be adopted in terms of the hearing itself and its structure, as well as the arbitrator's final decision. The additional advantage from Huberman's perspective is that arbitrated decisions are virtually impossible to set aside outside of grounds of fraud. Parties seeking a neutral fo- rum often go to arbitration, says Bill Horton, a national and inter- national commercial arbitrator based in Toronto who teaches a course with the Toronto Com- mercial Arbitration Society. For example, parties from different countries may not want to litigate a dispute in the courts of one country or the other so arbitration becomes desirable. "Arbitration gives you the op- portunity to shape the process to meet whatever your goals are in terms of resolving that particu- lar kind of dispute. So the strat- egy has to start with why are you doing it in the first place," says Horton. LT FOCUS ON Alternative Dispute Resolution Mitchell Rose says sometimes there's a knee-jerk reaction for lawyers to simply pursue a lawsuit without considering other options. FOCUS 2017 Compensation Survey SALARIES CHANGE, PARTNERSHIPS EVOLVE, LAW DEPARTMENTS GROW. Share what's happening in your organization. Complete by May 8 for a chance to win a $500 gift card. Go to canadianlawyermag.com/surveys today. Untitled-1 1 2017-04-06 3:05 PM

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