Alternative dispute resolution takes centre stage in commercial disputes

There has been an uptick in the use of alternative dispute resolution (ADR) methods like arbitration and mediation in commercial disputes over the last few years, a trend catalyzed by COVID-19. Senior associate Rachael Saab sat down with Lexpert to discuss this trend.

In her experience, parties on both sides of a dispute like being able to resolve disputes within a set timeline that corresponds better to commercial reality.

“The use of ADR generally produces a resolution more quickly than using a court system that can be backlogged,” Rachael said.

Rachael told Lexpert that she’s seeing more mandatory arbitration clauses built into contracts as an agreed-upon way of settling any potential disputes before they happen, even though the arbitrator’s decision is generally final, with few avenues of appeal or review.

She has noticed there is often a more “robust” discovery phase in arbitration that puts the evidence of both sides in front of an arbitrator.

Read: Class action stayed in favour of arbitration

Using ADR can help ensure that the process responds to the realities of the parties and the issues involved, including enlisting a mediator or arbitrator who is familiar with the dispute in question.

“Judges on the commercial list in Ontario are great generalists and can get up to speed on very complicated issues,” Rachael said.

“However, if you’re dealing with a particularly specialized industry, there might be some advantages to having a decision maker who already understands the issues and sector.”

Rachael continued, suggesting that parties can use a hybrid of mediation and arbitration when they both agree to try to resolve their dispute consensually.

“The idea is you can design a process to try to mediate, but if we can’t agree on a solution, we’ll let the mediator become an arbitrator,” she said.

When asked about her thoughts on incorporating models of international arbitration into domestic spaces, Rachel acknowledged that it has been positive.

“There are many different ways to design an arbitration framework, agreeing to the methods of a particular arbitral body, but some default rules are also set out depending on the jurisdiction,” she said.

You can read more about our Disputes and Investigations work on our practice page.

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