Building just, speedy and cost effective resolution
In the commercial world lawsuits can take the focus away from the business, strain cash flow, and drain entrepreneurial energy. The longer that the dispute drags on, the more damage there is to the enterprise.
Arbitration offers a faster alternative to litigation. While some arbitrations can take an extended period of time, the ability of the parties to select what process applies to their arbitration means that they can select rules which fast track their arbitration.
ADR Canada (“ADRIC”) “Arbitration Rules” provides for fast track arbitration under the Simplified Arbitration Procedure. These arbitrations can generally be concluded within three months; the goal being a just, speedy, and cost effective resolution.
The following are the key features of the Simplified Arbitration Procedure under Rule 6.2 of the ADRIC Rules.
The goal of fast track arbitration is to balance the requirements of justice with the need for speedy resolution. A speedy resolution, which is unfair, is unjust. Unlike the court process, the arbitrator is actively involved in designing the process and ensuring fair treatment. The arbitration is made up of a single arbitrator (6.2.2. (a)).
The parties exchange statements within 10 days of the arbitrator being appointed (6.2.2. (b)). These requirements are described in Rule 4.10. The statements lay out the nature of the claim, the defences, and counterclaim, if appropriate. This also includes the exchange of digital copies of any documents to be relied upon in the arbitration.
Preliminary matters under Rule 2.3 must be completed within 90 days of appointment. However, the goal should be within 45 days in order to conclude proceedings within three months. These include procedural issues but also such relief as interlocutory injunctions and security against judgment.
There are no oral discoveries unless the parties agree, or at the arbitrator’s discretion (6.2.2. (d)). There are no transcripts of the proceeding (6.2.2. (e)).
The approach to oral evidence is also streamlined. Evidence is presented in affidavit form in lieu of evidence in chief, subject to oral cross examination, and reexamination (6.2.2. (f)). The parties can decide to forego oral evidence completely and proceed solely on affidavits and documents. This is similar to a Chamber’s Application in BCSC.
The arbitrator is responsible for maintaining the Record of Arbitration, which includes all documents relied upon in the arbitration: exhibits, affidavits and any other documents pertinent to the arbitration procedure (6.2.2. (g)).
Once the hearing is concluded, pursuant to Rule 4.26.1, the arbitrator must deliver the award and reasons within 14 days. Since arbitrators can withhold their award pending the payment of their fees, it is beneficial to ensure all deposits are paid in advance. In many cases, the arbitrator will offer a flat fee for service.
The fundamental benefit of arbitration is that the participants control the process. By selecting the appropriate rules, the parties can ensure speedy and just resolution. The goal of every arbitration is to let the parties get back to what they do best – building their business.
- Select an arbitrator who has experience in the area of business under dispute. Many arbitrators are not lawyers, but process significant expertise in any given area. In many commercial arbitrations, the cases turn on complicated or esoteric fact patterns. Having someone who understands the nuances of an industry is essential.
- Use the initial meeting to determine timelines and select appropriate rules of arbitration. For example, there are specific rules for certain industries like the “Rules for Mediation and Arbitration of Construction Disputes” produced by the Canadian Construction Document Committee.
Michael Butterfield is a Victoria, BC-based ADR professional and past Chair of the CBABC ADR-Victoria Section.