Our court system is broken. Delays are monumental, a “day in court” is often just a few hours, and Judges are overwhelmed and often lack subject matter expertise. The result is that litigation is costly, lengthy, and unpredictable. Employment lawyers have been complaining about this for years, and the issues have only been exacerbated by the pandemic. Even the Human Rights Tribunal, which used to be a “quicker” option, is now facing a backlog that means that getting to a hearing will take three to five years.
There is a better way: arbitration. That may sound self-serving as I am actively working to expand my ADR practice, but it is true. With arbitration, counsel can:
- Choose the best “judge” for the case;
- Design a process that fits the specific case (for example, you may need limited examinations for discovery, or you may be able to have evidence at trial given by way of affidavit and limited cross-examination); and
- Determine a timeline and expect the arbitrator to stick to it.
Better yet, you can use Med-Arb for one-stop ADR: mediation and arbitration in one package, to ensure finality either by agreement or judgment.
Mediation-Arbitration is common in the Labour Law world, but still underused in the Employment Law world. It is a two-stage process in which the parties 1) attempt to settle their dispute through mediation and, if that fails, 2) use binding arbitration to resolve any issues remaining after mediation.
How can your arbitrator also be your mediator?
Med-arb usually proceeds with the mediator and arbitrator being one and the same neutral, which provides for greater efficiency. That being said, I will address the most common concern upfront: is it unrealistic to expect the neutral to remain impartial during the arbitration phase when, during the mediation phase, they will almost undoubtedly be privy to information, including settlement proposals, that a division-maker would not normally be aware of?
I note that many Judges in civil court conduct “mid-trial” settlement conferences when they deem it advisable, and that is generally accepted. More importantly, since the parties to med-arb counsel can select the arbitrator, they can choose one that they are comfortable with and confident in their ability to only consider appropriate evidence when rendering their verdict. However, they can also build in a safeguard: the right to opt-out of arbitrating with the neutral who conducted the mediation.
Opting-out
This right to opt-out allows any party who is concerned about the impartiality of the arbitrator to decide not to proceed with them; the parties can designate a backup arbitrator at the outset, or simply put a process in place to select one if needed. The arbitrator should also have the right to opt-out if they feel that it would not be appropriate for them to continue past mediation.
The decision to opt-out or continue is made after mediation, so any party can assess how the mediation proceeded, what was said and done, and whether or not they are comfortable proceeding with the same neutral. If they are not, they can opt-out with no need to justify their decision.
Arb-Med?
Another way to prevent the arbitrator from considering information gathered during the mediation phase is to conduct the arbitration first. I have spoken to some people who have used this approach and found it to be quite effective. Essentially, the parties conduct an arbitration all the way through to its conclusion. The neutral must reach his or her decision as to the outcome, though they don’t have to write their full reasons yet. They then conduct a mediation, with the parties knowing that if they do not reach an agreement, the neutral will announce his or her verdict. That can be very powerful; far more than knowing that the litigation process will continue and they will get to trial one day. In this case, they know that a judgment will be imposed upon them within hours or even minutes, so if they want to settle, they must do so now.
Final offer arbitration
As I said earlier, the parties can design a process that is right for the case rather than using our civil court’s one-size-fits-all approach. One process could be final offer arbitration, where, instead of a full arbitration hearing, if a settlement is not reached via mediation, each party must put in their final offer. The arbitration must then choose one or the other. This process, used in baseball salary arbitrations for decades now, forces both parties to put forward a reasonable offer, since if they propose something unreasonable, the arbitrator is going to choose the other party’s proposal. Arbitration can be as simple as that, or it can involve a complex hearing with hundreds of witnesses and multitudes of documents (though that scope is unusual for employment disputes).
Questions?
I invite you to reach out if you have comments or questions about the use of Med-Arb to resolve employment disputes. As a Bar, I hope to encourage more discussion of this tool which will lead to more widespread use.
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