Question: What is the difference between
arbitration and mediation?
Wendy: Arbitration is a method of finally
determining a dispute. The end result is an award which is
similar to a Court Order in that it is final and binding upon the
parties and can be enforced against the parties in the same way as
a judgment of the Court. In an arbitration, a neutral third
party – the arbitrator – hears the evidence and makes a
decision as to who is right and who is wrong.
In a mediation, on the other hand, the neutral third
party – the mediator – makes no
such determination, but rather focuses on trying to assist the
parties to come to a negotiated mutually satisfactory settlement or
compromise of the matters in dispute. Sometimes, the mediator
is successful, in which case, the dispute is over. Sometimes
the mediator is not successful, in which case the dispute continues
Question: When would an organization want to
choose mediation over arbitration and litigation?
Wendy: There is little doubt that a negotiated
resolution which takes into account the interests and goals (both
business and otherwise) of the parties and avoids the continued
expense and risk of a negative decision imposed upon the parties is
more efficient, less expensive, less public and less time-consuming
than litigation or arbitration.
Question:What are some of the
main things that organizations need to keep in mind in determining
whether to choose arbitration over litigation? Wendy: Arbitration does offer some
significant benefits: the parties get to choose a person
knowledgeable in the field and in law to act as their
arbitrator. The parties can customize the process to suit
their particular dispute so that it can be resolved in a more cost
effective and efficient way. Arbitration is also a private
process which allows disputes to be determined outside of the media
and the public eye.
Question: Are arbitration and mediation less
costly than litigation? Wendy: It is hard to say. Arbitration
in one sense is more costly because the parties have to pay for the
cost of the arbitrator, as well as legal counsel. On the
other hand, it can be a rather quicker process than litigation,
which does reduce the cost. A negotiated result arising from
a mediation is typically much less costly than litigation, but not
every mediation leads to a negotiated settlement, in which case,
the cost of the mediation, which can be quite high, might well seem
like a waste. But even in these circumstances, mediation
actually is not a waste because, typically, the parties learn a
great deal of information about each other's case, which can
subsequently lead to a mutually satisfactory settlement.
Question: Can organizations simply state that the
parties will go to arbitration in the event of an unresolved
dispute? Wendy: Parties can do that but it is not
recommended. It is very important that the arbitration clause
be drafted carefully so that it is clear to the parties how the
arbitration clause is going to work and what disputes the
arbitrator has jurisdiction over, how the arbitrator is to be
selected, what laws govern the arbitration and govern how the
dispute is to be resolved, etc. A poorly drafted arbitration
clause can lead to multiple disputes about whether it is
enforceable and how it applies, any of which can lead to complex
and difficult litigation in the courts, further increasing the
expense for all involved. It is well worth the effort for
both parties to spend some time thinking through what disputes
might arise and how they want their disputes arbitrated so that the
expectations of the parties are clear and unhappy surprises are
Question: Any last words for organizations to
consider in their commercial agreements in this area?
Wendy: It is worthwhile for organizations
contemplating a significant project to spend some time thinking
about how best they can go about identifying and resolving disputes
quickly at the earliest stage, preferably before the parties embark
upon the arbitration or litigation process. There are various
mechanisms which can be built into the dispute design in the
agreements, which will enable the parties to identify areas of
possible dispute at an early stage and escalate such issues to
higher levels within the respective organizations for guidance and
direction as to how such disputes can be avoided on a go-forward
basis. Such mechanisms do not always have to depend upon a
dispute being identified. For example, one can build in
periodic meetings between various levels of people involved in the
project, the purpose of which is to work together on areas of
difficulty and iron out problems before they become potential
sources of litigation.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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