Who pays for a mediation or arbitration?

Unlike a judge or a tribunal where the cost of the court or the tribunal is typically covered under applicable legislation (sometimes subject to nominal application fees), the parties to a mediation or arbitration usually cover the cost of a mediator or arbitrator directly. The parties can agree to split the mediator’s or arbitrator’s fees equally, or in some other proportion, or agree that some or all of the fees and disbursements of the arbitrator will be paid by the losing party. Often the fees of the mediator or arbitrator are fronted equally by all parties, subject to a possible apportionment at the end of the procedure.

 

Cost of a mediation or arbitration?

The cost depends on how many ADR decision makers are involved. Typically a mediation only involves one mediator. An arbitration is usually decided by one arbitrator, but often more complicated disputes have three arbitrators with one arbitrator chosen by each of the two parties and the third arbitrator jointly decided upon by the two previously selected arbitrators or by a Court if no consensus can be reached. The cost of the mediation or arbitration is usually determined by the length of the procedure which in turn is significantly affected by the procedures to be followed. Typically professional mediators or arbitrators charge an hourly rate or a flat fee per day. Per diem rates typically range from $1,500.00 to $4,000.00 per day depending upon the experience and training of the mediator or arbitrator selected. Additional charges may also be incurred for legal counsel separately if Court intervention is required either to choose an arbitrator or if appeal or judicial review is sought after an award is rendered in an arbitration. Additional disbursements may also apply for the rental of meeting rooms, food and beverages, etc.

 

What are the ADR procedures?

A mediator or arbitrator will usually initially meet with all parties to determine the scope of the issues to be decided, procedures to be employed, and expected cost.

A mediation tends to be significantly less formal than an arbitration and usually without detailed rules for the provision of documents or evidence which are usually provided when applicable.

At the end of the initial or follow-up meeting, a mediation or arbitration agreement is drawn up and signed by the parties and usually a deposit is paid to the mediator or arbitrator at that time. A mediation or arbitration agreement may or may not be reviewed by a party’s lawyer or agent. In the case of mediation, a decision is made as to whether or not the mediation will be an open mediation or closed mediation and whether or not the submissions made during the course of the mediation may be used in a Court of law if no agreement is reached.

During the course of the mediation, a mediator will of course meet with the parties jointly but may also caucus separately with each of the parties in order to canvass possibilities of settlement from their unique point of view. This separate caucusing or meeting with the parties typically does not take place in arbitration in order to avoid a reasonable apprehension of bias.

Depending on the complexity of the issues at hand, and in particular in commercial arbitrations, or international commercial arbitrations, lengthy rules developed by arbitration institutes are often adopted and which govern the timing and submission of evidence, any procedures for discoveries or cross examinations etc.

A mediator will wish to obtain a written agreement with respect to all issues agreed upon, separate from the ones that cannot be agreed upon in order to narrow the issues. Typically an arbitrator will retire at the end of the arbitration and prepare a written award which is released within an agreed period of time. A mediator’s agreement may be drawn in the form of a separation agreement for example in the family law area, or simply an agreement in a commercial setting, and which may or may not include releases. An arbitrator’s award when filed with a Court becomes enforceable as an Order of that court.

 

How long does a mediation or arbitration take?

This will depend on the complexity and/or contentiousness of the issues involved and/or the number of issues involved and the availability of the parties. Many times a mediation or arbitration may be completed within a day but this can often be extended to additional days to allow the parties’ time to think about their positions or obtain information. In an arbitration setting, the parties may agree to limit the length of the arbitration, and often schedule additional time in order to meet timing guidelines, such as in ongoing construction projects.

 

What are the benefits of ADR?

The benefits include:

1. A mediation or an arbitration is a private procedure and the details of the proceedings is typically not open to the public;
2. You can choose your own mediator or arbitrator based on skill set, time availability and cost;
3. You can tailor your own procedures;
4. A mediation or arbitration can often be decided quickly, but this is not always the case;
5. Mediation or arbitration can be significantly less expensive than litigation, but this is not always the case, especially if an arbitration award is appealed or subject to judicial review.

 

Do I need a lawyer for a mediation or arbitration?

No legislation requires a party to be represented by a lawyer or agent, although it is often a good idea unless the parties have all agreed to dispense with legal counsel or if it is provided in the agreement that lawyers will not be present. A party’s lawyer may counsel that party in advance of the mediation or arbitration, but such preparation cannot contemplate every contingency taking place during a proceeding.

 

Are there any things I cannot do in mediation or arbitration?

As a mediation merely results in an agreement of some kind, with varying degrees of enforceability, steps may have be taken to enforce that agreement directly or through a Court. For example, a separation agreement may be filed with the court and which in certain circumstances becomes the equivalent of a court order. Conversely certain things will require a Judge’s decision, for example a decree of divorce which the parties cannot grant by contract.

With respect to an arbitration, although an arbitrator’s award is generally enforceable as an Order of the court upon filing the award with the Court, certain things can only be done by a Judge’s Order. These would include such things as an injunction, a declaration binding non-parties to the arbitration, and specific decrees such as a divorce decree.

 

How do I start a mediation or arbitration?

Where a mediation agreement or arbitration agreement does not previously exist, mediation or arbitration may be commenced by meeting with a mediator or arbitrator and entering into a mediation agreement or arbitration agreement.

Where an agreement is already in existence which provides for mediation, and especially arbitration, the agreement will often provide the procedures necessary to commence the arbitration and pre-conditions to commencing arbitration, such as attempting mediation. An agreement may often provide time limits within which arbitration may be invoked, and the manner thereof.