Friday May 14 2021

General publication

Are There Alternatives To Messy, Expensive Lawsuits?

The short answer to that question is “Yes.”  Since 2016, when it reformed the Code of Civil Procedure, the Quebec government has encouraged possible litigants to try other ways of solving their disputes before or instead of lawsuits.

This trend towards what is termed Alternative Dispute Resolution (ADR) mechanisms is part of what the law now mandates that parties at least consider other ways of solving their disputes before launching into lawsuits.

There can be a great number of different ADR methods, but we will look here at the most common methods.

  1. Negotiation:  The parties, either by themselves, or one or both with the aid of a lawyer or another professional, meet, either in person or virtually (as is now becoming more common during the COVID pandemic) and negotiate, with some give and take, to try to come to an agreement to settle their disputes.  It can go quickly or drag out, and it can take 1 meeting, or be spread out over several meetings, telephone calls and correspondence.  This is purely voluntary.  Nobody can be forced to come to an agreement and there is no guarantee of success.

  1.  Informal Conciliation:  A third person agrees to act as a conciliator, meeting with both parties, both separately and together, to see if he can help them find common ground and come to an agreement.  We use the term “informal” because it need not be an officially accredited mediator, nor does the person have to be remunerated.  Ideally, it should be someone familiar with the issues, that both parties trust and who will not be biased in favour of either party.  One or several meetings may be needed, it can drag out as well and it is also purely voluntary.  There is still no guarantee of success.

  1. Mediation: This is a more formal version of number 2, because the parties will jointly select, hire, and pay a professional mediator, who is usually a lawyer, a notary, a retired judge or another professional.  Such persons in Quebec can be accredited as both mediators and/or arbitrators.   They can be expensive, but there can be many advantages.  First the cost is shared equally between the parties and will usually be overall less expensive than a lawsuit.  Second, if successful it usually goes much quicker than a lawsuit, and the mediator can prepare a binding settlement agreement for the parties to sign.  Third, even if unsuccessful, the mediation process can define the issues and narrow the points in dispute, even though what is said in mediation remains confidential should it go to court.  There is the added cost of each party usually having a lawyer present as well.  A version of mediation exists which may not be quite as expensive, because all courts and most tribunals in Quebec offer mediation services.  This is offered where lawsuits are already underway. A judge or retired judge will spend a day with the parties in a Settlement Conference and try to get them to agree.  It is a service offered by the Court only if all parties agree, and at no charge.  The parties must pay their lawyers to be present, and the courts’ mediation services have a high rate of success in the settlement of lawsuits before a trial, but still there is no guarantee of success.

  1. Arbitration:  This is the most expensive mechanism because it essentially means the parties are hiring a private “judge” to decide their dispute.  The Arbitrators are usually experienced lawyers, possibly specialized, or retired judges. The parties have their own lawyers to argue the case and then must jointly select an arbitrator (or a panel of arbitrators) to decide the dispute.  While it will look much like a trial, not all the procedural formalities of a lawsuit will be observed.  The arbitrator or the parties can set up their own procedures, however.  While arbitration can be voluntary, in that the parties can sign a contract to solve a specific dispute by arbitration, in some cases it is mandatory.  For example, in Quebec unionized labour disputes, grievances must be submitted to arbitrators.  Contracts for long-term relationships can have mandatory arbitration clauses.  For example, many fast-food franchise agreements have clauses obliging the parties to go to arbitration. The parties will pay the Arbitrators equally during the arbitration, to ensure neutrality.  The award, the arbitration judgment, will often order the losing party to reimburse the cost of the arbitrator to winning party.  Arbitration can go faster than court procedures, because the parties are not waiting for the court’s availabilities along with hundreds of other litigants.  Arbitration is a private procedure, so the evidence, the testimony and the judgment are not supposed to become public.  Such may become public if the losing party refuses to pay, and to enforce the judgment, the winning party must go to court to ratify or “homologate” the judgment to force the losing party to comply.  If the losing party disagrees with the judgment, it cannot appeal the award to a court.  It is final.  He may, however, try for a judicial review by a Superior Court only if the award was not only wrong but completely unreasonable, or if the arbitrator somehow exceeded his jurisdiction, for example, by not respecting principles of procedural equity.  This, however, is a much more stringent burden than convincing an appeal court to reverse an incorrect judgment.  The arbitration process, like the court process, can itself encourage the parties to settle amicably, due especially to its cost, and possibly its length.  Unlike the other methods, there will be a result, as the arbitrator will decide if the parties do not first come to agreement.

For your disputes, carefully consider the possible methods other than a lawsuit, but do consult a lawyer to know your rights and obligations, to review the ADR mechanisms, and, if need to be, to help you select a mediator or an arbitrator.

This article contains legal information of a general nature.  For advice and counsel specific to your situation, consult your lawyer or notary.

Franco Tamburro, Attorney-at-Law

Alepin Gauthier Avocats Inc.