Arbitration becomes more like litigation
Gap between two models of dealing with disputes narrowing
Monday, October 10, 2011 | Written by Julius Melnitzer
When the parties have agreed on how to resolve a dispute, there tends to be far less procedural messing about,’ says Wendy Earle.
The gap between litigation and arbitration, it appears, is constantly narrowing.
[ use the Rules of Civil Procedure as their framework,” says Michael Schafler of Fraser Milner Casgrain LLP.
Then there’s the question of whether the arbitration process encourages settlement. Lawyers seem to be all over the map on this question with responses ranging from very low settlement rates to estimates that approximate litigation’s record on the issue.
Because arbitration is confidential, meaningful statistics are few and far between. But at least one arbitrator believes the settlement rate in litigation is much higher than in arbitration. His explanation is most interesting.
“An arbitrator who does virtually only domestic arbitration told me that 90 per cent of cases to go to hearing, whereas 90 per cent of litigation settles,” Richler says.
“He believes arbitrations don’t settle more frequently because the parties don’t get fed up with the process as often as litigants do.”
For his part, Laskin offers another explanation. “It’s not unusual for arbitration clauses to have provisions for pre-arbitration conciliation and mediation,” he says. “So in custom-built arbitration, parties may be reluctant to settle because most likely they have already tried to do so.”
Despite the convergence of litigation and arbitration, the greatest divide between the two may be psychological in nature.
Alternatively, it may just be that old habits die hard. “Once they get into the courtroom in a civil litigation context, counsel tend to put on their flak jackets and batten down the hatches,” says Lisa Constantine of McCarthy Tétrault LLP.
There’s also the argument that arbitrations tend to go more smoothly because they’re consensual in nature. “When the parties have agreed on how to resolve a dispute, there tends to be far less procedural messing about,” Earle says.
“The mere fact that they’ve decided to send something to arbitration means that they envisage an efficient process.”](“http://www.lawtimesnews.com/images/stories/2011/October/Oct10/wendy-earle.jpg”)