Services / Condominium Dispute Resolution
Benefits of mediation as a dispute resolution process include:
You choose the mediator
Mediation is informal
Mediation is confidential
Mediation aids communication
Mediation avoids a “win-lose” approach
Mediation often defuses hostilities, clarifies issues, and expands options even if the dispute is not completely resolved
Mediation preserves relationships and community values
Mediation is usually faster and less expensive than litigation
Mediation helps the parties reach their own settlement
Mediation is flexible and solutions can be tailored to the parties’ needs and interests
Although mediation is a far less expensive process than litigation, it does have significant costs. For the condominium corporation and the unit owner, there are the costs of legal advice and the mediator’s fees. These fees vary depending upon the experience of the mediator and the length of the mediation.
If you are a unit owner or a condominium corporation and receive notice asking you to mediate a dispute, you should seek legal advice as soon as possible. It is not a good idea to ignore a request to mediate or decide not to participate in mediation as doing so will trigger arbitration and far higher costs.
Given the unique nature of condominium disputes, it makes sense to choose a mediator with experience in the field.
What is Arbitration?
Arbitration is an alternative dispute resolution process required under the Condominium Act. It is a legal process governed in Ontario under the Arbitration Act, 1991, the Condominium Act and the Arbitration Act. Arbitration is different from mediation as it is an adjudicative dispute resolution procedure in which a decision-maker, or arbitrator, issues an award which is equivalent to a court judgment and is usually the final disposition of the case. Unlike participants in mediation who design their own settlement with the help of the mediator, participants in arbitration pass control of the outcome to the arbitrator.
Condominium arbitration is not significantly different than any other type of arbitration but all things being equal, the parties should choose an arbitrator who is familiar with condominium matters.
Arbitration is a formal structured dispute resolution process, but it is designed to be less formal and more flexible than litigation in court in a number of ways:
- The parties can choose the arbitrator who will hear the case;
- The parties can control the process by structuring the terms of the arbitration;
- The rules of evidence are far more relaxed than in court;
- There is less, and often in condominium arbitration, no pre-hearing discovery which is the process through which each side obtains case-related information from the other;
- The process is private;
- The parties decide what records will be kept of the proceedings; and
- The process is less formal than in court.
The Arbitration Process
Step 1: Arbitration begins with “A Notice of Submission to Arbitration” from the party initiating the arbitration to the other party. There may also be an ADR By-law for the Condominium Corporation.
Step 2: The Notice will nominate a specific arbitrator for the dispute. If the other party agrees to the appointment of the nominated arbitrator, then the process proceeds. If `one party objects to the arbitrator and cannot agree on the appointment of another mutually agreed upon arbitrator, then the Arbitration Act allows a party to apply to court to appoint the arbitrator. There is no appeal from the court’s appointment of the arbitrator.
Step 3: The condominium corporation’s lawyer and the unit owner’s lawyer will usually obtain resumes from potential arbitrators. They may also interview prospective arbitrators by telephone and will make recommendations of who to choose based on a variety of factors including knowledge, cost and experience of the arbitrator.
Cost of Arbitration – Who Pays?
The parties to the arbitration have significant legal costs in preparing and presenting their case in arbitration. The parties also pay for the arbitrator’s fees.
Because of this, the cost of arbitration will be much higher than that of mediation and can be extremely high if the dispute is lengthy and complex. This is another reason to try and resolve the dispute through mediation prior to arbitration.
The arbitrator can order that all or part of the costs incurred by one party be paid by another. In Ontario, the successful party is generally entitled to costs. In situations where the conduct of the losing party has contributed to significant delay or unnecessary proceedings, the arbitrator may award costs on a “full indemnity basis”, which means all of the party’s legal costs will be paid by the other party.