Mediation/Arbitration of Commercial Disputes - What You Need To Know
The court system, particularly in York Region, Ontario is backlogged with cases moving through the system at a snail's pace. As a result of a number of factors, you might easily draw a pre-trial or trial judge who has little, if any, experience in commercial matters. Also, the present move toward mandatory and complete disclosure of documents, including electronic messages, makes for openness that should be a cause for concern to you and your business.
The advantages of mediation/arbitration (med/arb) to you in a commercial dispute are many.
- Private mediation can be commenced within days of the selection of the mediator, unlike the court system, which has built in delays.
- You can include as a term of the med/arb agreement a date as to when the mediation ends and the arbitration begins, which will ensure a speedy resolution, often within a month.
- Choosing a mediator, who has experience in commercial matters, avoids the problem of facing a judge who has minimal experience in a particular area of law.
- Mediating a dispute rather than litigating it may save an important relationship with an employee, a supplier or a customer, by working out the issue in a cooperative, non-confrontational way. Litigating seldom does that by reason of its "winner take all" nature.
- Med/arb is completely confidential. None of your confidential documents become part of a court file. The public (including possibly your competitors) will have no access to them. Sensitive corporate documents containing information such as: customer and supplier lists; cost and sources of product; intellectual property; etc. remain private between the parties, and the med/arb agreement itself can be drafted to protect the documents exchanged between the parties.
- Mediation has proven to be very successful in resolving commercial disputes. 40% of all cases in the court system are resolved by mandatory mediation before trial. The success rate in private mediation, although statistics aren't readily available because of privacy issues, is likely higher than that.
- Even if the mediation fails, the arbitration will be made significantly less costly by narrowing the issues in the mediation process, and completing all required disclosure ahead of time.
- The cost of mediation is shared, so each party only pays one-half of the cost of the mediator, subject to agreement otherwise.
The med/arb process is faster. It protects the confidentiality of both you and your company. It's less costly.