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Mediation & Arbitration

Mediation and Arbitration are two processes for resolving disputes which are increasingly used as an alternative to a court action. Legislatures countrywide are encouraging the use of alternative dispute resolution to reduce the caseload of our overburdened court system. They have the following advantages:

1. They are less expensive than a court hearing.
2. They are generally faster: the dispute can be resolved in weeks, rather than months or years.
3. The proceedings and outcome are confidential since they are not a matter of public court record.
4. There is a greater chance of maintaining goodwill between the parties since they are less adversarial than a court action. This is particularly important if the two parties are to continue to do business with each other, for example a landlord and a tenant.
5. The parties to the dispute can chose a mediator or arbitrator who has knowledge of their particular industry or problem.
6. There are two additional advantages in the case of Mediation. Since the mediator’s function is to find a solution acceptable to both parties the process encourages them to explore a range of options. If the parties cannot reach agreement they have the option of proceeding to arbitration or court: they thus have control of the mediation outcome.

Mediation

This process involves the two parties jointly appointing a mediator. The latter works with the parties to identify the issues in dispute, promotes communication and assists them find a solution. In essence the mediator’s role is to focus on the respective interests of the two parties and help them find a solution which best addresses those interests. The process is non-adversarial: the mediator is a facilitator not a judge and has no power to impose a solution. If the disputing parties cannot reach agreement the mediation terminates and they are free to seek another means of resolving their dispute, usually arbitration or court … occasionally a duel at dawn.

Arbitration

This process involves the two parties jointly appointing an arbitrator, or each appointing an arbitrator. In the latter event the two arbitrators jointly appoint a third arbitrator to act as the judge. The parties, or their arbitrators, present their cases to the judging arbitrator who then renders a decision.

It is important that both parties to the dispute meet at the outset to agree on the quantum and responsibility for the arbitrator’s fees and any other expenses, the witnesses to be called, the time scale and the process. Many leases provide for arbitration in the event of dispute and provide that the process, including the appointment of the arbitrators, is to be governed by the relevant provincial Arbitration Act.

The Process

In our experience, the appointment of a mediator or arbitrator(s) knowledgeable of real estate and industry norms, is critical to the satisfactory resolution of the problem. Personal characteristics such as objectivity, a clear head and a keen mind are obviously also essential. Strong negotiating skills are also key to the mediator’s role. Our Consulting and Brokerage personnel act as mediators and arbitrators for real estate related disputes.