Thursday 13 October 2011

How Arbitration Can Save Time and Money and Why it Might Not

I recently attended the Legal Education Society of Alberta's seminar on arbitration. Here are a few key things I took from it that all civil litigators and parties to arbitrations should be aware of:
  1. Arbitration is not a panacea. Arbitration agreements and arbitration clauses need to be carefully drafted to ensure that they are appropriate to the circumstances. Adding boiler plate to your contracts is not enough.
  2. The effiency of arbitration depends largely on the procedures that the parties adopt. Arbitration counsel should be careful to select appropriate rules and should not select specifc procedures until the issues being disputed are somewhat clear. When in doubt, the arbitrator should be given discretion to make reasonable choices about procedure.
  3. Sometimes three heads are better than one. Having one arbitrator costs less but having a larger panel often leads to better-reasoned decisions. Allowing appeals to a three-person panel is a possible compromise.
  4. Arbitrator appointments can be contentious. If you have to apply to court to have one appointed, provide a list of options to assist the court.
  5. Be sure to follow your adopted arbitration rules precisely when initiating a claim. Otherwise the arbitration may be a nullity and limitations periods may elapse. This is particularly a concern when parties adopt administered arbitration rules that contain provisions for initiating arbitration that they are not aware of.
  6. Arbitration often narrows the procedural options available to litigants but also provides options that would not be allowed under the rules of court. This is especially true when dealing with expert evidence.
  7. Arbitration awards are more readily enforceable than judgements in foreign jurisdictions.
It was a great seminar over all and I recommend attending it next time it is offered if you are involved in civil claim arbitration.

Further info:
Uncitral Arbitration Rules: http://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-revised/arb-rules-revised-2010-e.pdf
ICC Arbitration Rules: http://www.iccwbo.org/uploadedFiles/Court/Arbitration/other/rules_arb_english.pdf
ADR Institute of Canada Rules: http://www.adrcanada.ca/resources/documents/ADRIC_National_Arbitration_RulesWithTaxNote.pdf

The views expressed in this blog may not be consistent with those of McCarthy Tetrault LLP or its clients. The information provided here is for educational purposes only. Every legal issue is unique, please contact an expert if you think you might need legal advice.

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