When a dispute arises between two spouses who have decided to separate and/or divorce and which needs to be resolved, rather than going to court, they may decide to arbitrate.
Arbitration is a method of alternative dispute resolution whereby trained arbitrators are empowered by law with the authority to make binding decisions on issues dealing with custody and access, division of property and spousal and child support.
Section 51 of the Family Law Act, R.S.O. 1990, c. F.3 defines “family arbitration” as:
An arbitration that,
- deals with matters that could be dealt with in a marriage contract, separation agreement, cohabitation agreement or paternity agreement under this Part, and
- is conducted exclusively in accordance with the law of Ontario or of another Canadian jurisdiction;
- you should be aware of the fact that s. 59.2(1) of the Family Law Act, R.S.O. 1990, c. F.3 and s. 2.2(1) of the Arbitration Act, 1991, S.O. 1991, c. 17 state that any decisions made by a third party that are not in accordance with the law of Ontario or another Canadian jurisdiction are unenforceable.
Before any arbitration proceeding may begin it is of paramount importance that both parties consent to participate. The parties (or their lawyers) are required to draft and sign an arbitration agreement. This agreement essentially outlines:
- that the parties waive their right to go to court and litigate, and
- the conditions surrounding the arbitration, such as:
- who will arbitrate,
- where and when the arbitration will be conducted, and
- what issues will be arbitrated.
You should be certain that any issue you would like to arbitrate, regardless of how trivial or insignificant it may seem, is incorporated into the agreement. An arbitrator is only authorized to make determinations on issues included in the agreement. Any decisions rendered on issues not included in the initial agreement will be unenforceable.
S. 58 of the Arbitration Act, 1991, S.O. 1991, c. 17 makes the screening of both parties for domestic violence or power imbalances prior to arbitration a mandatory requirement. They must be interviewed separately by an individual specially trained to recognize whether or not domestic violence is present or power imbalances exist between the parties. The following is a list of individuals that may screen for domestic violence:
- social workers
- psychologists, or
- other mental health professionals.
The screening is necessary to ensure that there is full and voluntary participation in the arbitration process or to determine whether or not certain safeguards needs to be put in place to protect the vulnerable party. (An example of a safeguard that may be imposed is that parties are not present in the same room at the same time.)
You should be aware that when screening is conducted it is to ensure that children are protected as well, not only spouses. Therefore, once instances of violence are discovered and children are implicated, there is a statutorily imposed duty on arbitrators to report it to the appropriate child protection agency and it is an offence to fail to do so.
Arbitration is the method of alternative dispute resolution that most closely resembles an actual trial but which provides parties with a cheaper, quicker and informal process. The impartial arbitrator is required to apply the relevant law to resolve the issues stemming from the separation or divorce of the parties.
For example, any issues dealing with the children of the marriage, whether it be custody, access or support matters, must be decided in accordance with their best interests. As a result, the arbitrator must take into consideration s. 24 of the Children’s Law Reform Act, R.S.O. 1990, c. C. 12 which lists specific factors that, if satisfied, evince the best interests the child. Both parties are also given the opportunity to present their side to the arbitrator and produce evidence supporting it. Any determinations made are incorporated into an award which binds both parties and is also enforceable by the court. Enforceability of the award is contingent on the satisfaction of certain factors listed in s. 59.6(1) of the Family Law Act, R.S.O. 1990, c. F.3:
Conditions for enforceability
59.6 (1) A family arbitration award is enforceable only if,
- the family arbitration agreement under which the award is made is made in writing and complies with any regulations made under the Arbitration Act, 1991;
- each of the parties to the agreement receives independent legal advice before making the agreement;
- the requirements of section 38 of the Arbitration Act, 1991 are met (formal requirements, writing, reasons, delivery to parties); and
- the arbitrator complies with any regulations made under the Arbitration Act, 1991.
With regards to subsection (b) there is a further requirement that the lawyer who provides the individual with independent legal advice must complete a certificate, provided by the Ministry of the Attorney General, deliver it to his or her client and attach it to the arbitration agreement. If this requirement is not complied with, then the entire arbitration award becomes unenforceable. When a party seeks independent legal advice, the lawyer is required to inform him or her of the nature and consequences of arbitration (i.e., are that the parties are effectively waiving their right to attend court to litigate the issues affecting them and empowering the arbitrator with the ability to make final and binding determinations) so that the choice to partake in the arbitration proceeding is both voluntary and fully informed.
The actual procedure used during the arbitration proceedings is not specified in the Arbitration Act, 1991, S.O. 1991, c. 17, the Family Law Act, R.S.O. 1990, c. F.3 or any of the regulations. As a result the parties or the arbitrator may decide which procedure is to be used, allowing for great flexibility and the ability to accommodate both sides. All that is required, however, is that the procedure be compliant with the Arbitration Act, 1991, S.O. 1991, c. 17 and the Family Law Act, R.S.O. 1990, c. F.3 and that it be fair to both sides engaging in the arbitration. Lawyers are not required to be present at this stage, their presence is only required at the signing of the arbitration agreement.
Equality and fairness
19. (1) In an arbitration, the parties shall be treated equally and fairly.
20. (1) The arbitral tribunal may determine the procedure to be followed in the arbitration, in accordance with this Act.
(2) An arbitral tribunal that is composed of more than one arbitrator may delegate the determination of questions of procedure to the chair.
Lastly, as was previously mentioned the result of arbitration is an arbitration award which may be registered with the court and enforced by it. An arbitrator may make more than one award if there is more than one issue being arbitrated. However, in order for an award to be enforceable it must comply with s. 59.6 of the Family Law Act, R.S.O. 1990, c. F.3 (see above) as well as with s. 38 of the Arbitration Act, 1991, S.O. 1991, c. 17, which states the following:
Form of award
38. (1) An award shall be made in writing and, except in the case of an award made on consent, shall state the reasons on which it is based.
(2) The award shall indicate the place where and the date on which it is made.
Formalities of execution
(3) The award shall be dated and shall be signed by all the members of the arbitral tribunal, or by a majority of them if an explanation of the omission of the other signatures is included.
(4) A copy of the award shall be delivered to each party.
Generally, the making of a final arbitration award terminates arbitration. However, the parties are endowed with the ability to appeal the final award pursuant to s. 45 of the Arbitration Act, 1991, S.O. 1991, c. 17. Moreover, s. 47 of the Arbitration Act, 1991, S.O. 1991, c. 17 imposes a time limit on parties who wish to bring appeals forward and requires that they be brought within 30 days of the making of the initial award.
Appeal on question of law
45. (1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it is satisfied that,
- the importance to the parties of the matters at stake in the arbitration justifies an appeal; and
- determination of the question of law at issue will significantly affect the rights of the parties.
(2) If the arbitration agreement so provides, a party may appeal an award to the court on a question of law.
Appeal on question of fact or mixed fact and law
(3) If the arbitration agreement so provides, a party may appeal an award to the court on a question of fact or on a question of mixed fact and law.
Powers of court
(4) The court may require the arbitral tribunal to explain any matter.
(5) The court may confirm, vary or set aside the award or may remit the award to the arbitral tribunal with the court’s opinion on the question of law, in the case of an appeal on a question of law, and give directions about the conduct of the arbitration.
Family arbitration award
(6) Any appeal of a family arbitration award lies to,
- the Family Court, in the areas where it has jurisdiction under subsection 21.1 (4) of the Courts of Justice Act;
- the Superior Court of Justice, in the rest of Ontario.
The parties may also decide to incorporate the appeal process in their arbitration agreement.
Section 46(1) sets out the circumstances under which an award may be set aside by the court:
- A party entered into the arbitration agreement while under a legal incapacity.
- The arbitration agreement is invalid or has ceased to exist.
- The award deals with a dispute that the arbitration agreement does not cover or contains a decision on a matter that is beyond the scope of the agreement.
- The composition of the tribunal was not in accordance with the arbitration agreement or, if the agreement did not deal with that matter, was not in accordance with this Act.
- The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.
- The applicant was not treated equally and fairly, was not given an opportunity to present a case or to respond to another party’s case, or was not given proper notice of the arbitration or of the appointment of an arbitrator.
- The procedures followed in the arbitration did not comply with this Act.
- An arbitrator has committed a corrupt or fraudulent act or there is a reasonable apprehension of bias.
- The award was obtained by fraud.
- The award is a family arbitration award that is not enforceable under the Family Law Act.
Secondary arbitration is also contemplated in theFamily Law Act, R.S.O. 1990, c. F.3 under s. 59.7(1) and (2) and defined as:
“Secondary arbitration” means a family arbitration that is conducted in accordance with a separation agreement, a court order or a family arbitration award that provides for the arbitration of possible future disputes relating to the ongoing management or implementation of the agreement, order or award.
Typically, secondary arbitration is used to clarify or adapt arrangements previously made to account for changes in circumstances. When issues arise relating to education, access, vacations, etc. they are resolved through secondary arbitration. There is much more leniency in terms of the requirements that need to be met for secondary arbitration as it is assumed that the parties were already afforded certain protections in the context of the initial arbitration. Therefore, the only requirements that are to be met are:
- that the secondary arbitration must be conducted according to the law of Ontario, and
- the parties must be screened for domestic violence by the arbitrator conducting the proceeding.
59.7 (1) The following special rules apply to a secondary arbitration and to an award made as the result of a secondary arbitration:
- Despite section 59.4, the award is not unenforceable for the sole reason that the separation agreement was entered into or the court order or earlier award was made before the dispute to be arbitrated in the secondary arbitration had arisen.
- Despite clause 59.6 (1) (b), it is not necessary for the parties to receive independent legal advice before participating in the secondary arbitration.
- Despite clause 59.6 (1) (c), the requirements of section 38 of the Arbitration Act, 1991 need not be met.