Med-Arb: What employment lawyers need to know

By Mitchell Rose, Mediator & Arbitrator

Mediation-Arbitration (“Med-Arb”) of civil disputes, including wrongful dismissal, is growing in popularity. In my view, this due to the following:

1) An increased number of employment contracts containing arbitration clauses.

2) The popularity of mediation within the employment bar.

3) Backlogged courts and the expense of litigation.

Med-arb is also becoming popular even when arbitration is not contractually required.

Labour lawyers are familiar with med-arb because of s. 50 of the Labour Relations Act, 1995, (“LRA”). Employment lawyers are less familiar with med-arb because court actions, not arbitrations, are the norm in their client’s disputes. So, here’s a med-arb primer designed especially for employment lawyers:

What is Med-Arb anyway?

“A dispute resolution process in which the parties commit that they will:

§  attempt to settle their dispute through mediation (the mediation phase)

§  use binding arbitration to resolve any issues remaining after mediation (the arbitration phase)”*

*Source: ADRIC Med-Arb Rules.

As well, Med-arb is a “submission to arbitration”. In other words, it is arbitration with mediation added on.

What law applies to civil med arbs?

Most – but not all - med-arbs of civil disputes in Ontario are governed by the Arbitration Act, 1991. They are not governed by the LRA (and labour arbitrations differ in many ways from civil arbitrations). The parties can adopt procedural rules such as the ADRIC Med-Arb Rules, which I prefer to use. However, the Rules of Civil Procedure do not apply unless the parties specifically agree to adopt them (which I don’t recommend since this is not litigation).

Who is the mediator and who is the arbitrator?

The mediator and arbitrator are usually one and the same neutral. However, the parties could agree in advance that, at the beginning of the arbitration phase (assuming all issues have not been resolved at mediation), any party could opt-out of the mediator acting as the arbitrator. If one party exercises the opt-out then the matter proceeds with a new arbitrator, and without the need of another mediation.

A neutral who conducts civil med-arbs should have training and experience as both a mediator and an arbitrator of civil disputes. In addition, they should have additional training and experience regarding the conduct of civil med-arbs.

When do parties typically agree to med-arb?

Most med-arbs are agreed upon prior to the commencement of an action, or before a defence is filed. This is ideal. However, occasionally an action - following mediation - is converted to a med-arb on agreement of the parties.

If the med-arb proceeds to the arbitration phase, what does the hearing look like?

Counsel and parties have input into the design of the arbitration phase. There are many possibilities for a hearing format, including, but not limited to:

§  A fully or partially in-writing hearing.

§  Virtual attendances to the extent that the presentation of evidence and/or submissions are not in writing.   

§  Summary trial-style hearing.

§  Summary judgment-style hearing

§  Final-offer selection (“baseball arbitration”)

§  Bifurcation of issues.

The arbitration phase should not begin on the same day as the mediation.  There should be a buffer between mediation and arbitration. Under the ADRIC Rules, this is known as the “transition phase”. It is common for the arbitration phase to begin days or weeks after the mediation, and for the hearing to take place in the months following that.

Lastly, communications and materials exchanged during the mediation phase do not constitute evidence and submissions for the arbitration phase.

What are some of the advantages of med-arb?

§  Speed, since you are not on the court’s schedule and there are fewer procedural steps.

§  Cost savings.

§  Privacy and finality if the parties agree to no appeals (which is the norm, in my experience, and leads to greater efficiencies).

§  “One stop shopping” if the mediator and arbitrator are the same.

§  The parties may be willing to make concessions at the mediation in a med-arb that they otherwise would not be prepared to make in a regular mediation.

§  You choose your decision maker, like all arbitrations.

What are the costs of med-arb?

Mediator fees for the mediation phase are similar to the fees for regular mediation.

Arbitrator fees for the arbitration phase vary depending on the case and the arbitrator. For the least costly form of hearing (i.e., one to three issues plus costs, and fully in writing), fees will likely start at $5,000.00 + HST per side including award writing time. Arbitrator fees are paid “as you go” through a series of deposits.

Unless the parties agree otherwise, the arbitrator has the power to award costs following the hearing, including counsel fees and arbitrator fees.

How do I obtain more information?

Feel free to contact me at adr@mitchellrose.ca.