Commercial Arbitration

Written by Kent Burnham, Partner
Many Contracts have a clause that says that disputes shall be resolved by arbitration and then make reference to the British Columbia Commercial Arbitration Act.  If this clause exists, or if the parties agree, the parties are able to have their dispute resolved by way of arbitration without the necessity of going through the entire Court process.
Arbitration is, essentially, a private judicial process whereby disputes are resolved by an appointed Arbitrator instead of a Judge.  The Arbitrator’s decision is in accordance with established law.
In its simplest description, arbitration is effectively hiring a private judge to hear the dispute and make a binding decision.  It can be much more complex than that as the parties can agree on the extent to which the Rules of Court apply, how much or how little evidence will be given by way of written statements, oral evidence, the extent of cross-examination, or even how rigidly the Rules of Evidence will apply.  The parties can incorporate other rules or values upon which they agree or by which their business, trade, or profession is governed.  The Arbitrator assists the parties in agreeing to the parameters by which they will resolve their dispute.  Once they are agreed upon, the process is very similar to the usual Court process with the parties presenting their cases, being submitted to cross-examination or some other test of the evidence, each party having an opportunity to present their argument, and then the decision being rendered by the Arbitrator.
Arbitral awards can be subject to appeal, or the parties can agree to have the one decision be final.
If there is improper conduct on the part of the Arbitrator, it is always reviewable by the Courts and, as a general rule the Courts have the jurisdiction to review decisions where there has been an error in law.
Arbitration is not inexpensive.  It is, however, more accessible to the parties and can be structured in such a manner as to proceed more quickly than matters would through the Courts.  It allows for the parties to select a decision maker (the “Arbitrator”) or a panel of decision makers (the “Tribunal”) in whom they have confidence and who have special knowledge of the kind of claim being arbitrated.
With the increasing costs of litigation and the inaccessibility of the Courts due to overbooking and too few judges, arbitration is an option that should be considered to resolve commercial disputes.  It permits a flexibility unknown to the Court and allows  resolutions to be fashioned in a matter that best serves the parties’ interests.  Properly prepared and organized, the Rules of Court and Rules of Evidence can be utilized to their best advantage and a decision maker selected that provides consistency and predictability.
If you are involved in a legal dispute, consider and discuss the possibility of resolving it through arbitration with your lawyer.