Arbitration

Arbitration was supposed to be a simpler and hence less costly alternative to the court system. Unfortunately, as more and more lawyers have been retained for clients and as more retired judges became arbitrators the process has become complicated and expensive – more of an alternative court rather than an alternative to the courts.

There has to be a better way, a way to save a lot of time and a lot of money. Of course saving time in a legal process automatically saves you more money.

There is a better way. It requires determination and agreement from both sides to do one thing – agree to want a result and in a timely manner. That is the first step, mutual agreement to get it done.

Fountain PenIn one case, a tavern in Toronto, in my role as the arbitrator by the time it came to me the landlord and tenant had been disputing the rental rate and options to renew for 3 years and the tenant was in for legal costs of $70,000. In one day, working under a court order I was able to settle this matter. The tenant ended up paying a higher rent, almost what the landlord wanted but the tenant received two renewal periods of 5 years each. These options were not part of the ongoing deal. This made the business saleable, which was the tenant's desire. A win-win but only after hard negotiation, head banging, bringing common sense to the parties and me acting as a combination of arbitrator, negotiator, mediator and tough guy.

Next case. Yonge Street, downtown core of Toronto. Fast food franchise. 18 months of negotiation between landlord and tenant and tenant ended up on month-to-month instead of having a secured lease. Lawyers had failed to push the parties to be reasonable. I met with the landlord and tenant and after 3 solid hours of  negotiation, we reached a compromise. I retained a third party, a commercial Realtor of my choice (with approval from both sides) to do a rental study and made a decision on the final rent. Tenant received a 15 year (3 x 5 year) lease and business is excellent in this prime location.

What I do is somewhat different. I do not sit and just listen. Yes, I listen but I get past the small stuff, make the parties focus on the primary factors which is usually price and renewals and go from there. I advise the appraisers, if retained to eliminate the full appraisal reports and focus on the comparable data, not the rhetoric. Bare bones. If a party is going off track, my job is not to let it run but to make the discussions relevent and to work to settle. Many disputes are based on bad blood that has developed over the years and personalities come into conflict. My years of selling and working with people have trained me to smooth things out, to get past it and yes, sometimes people have to just vent.

My ideal arbitration – we agree that no matter the time we finish in one day. Evidence is presented to support a rental position and it has to be true comparable evidence. The parties make their positions known and then we start to work to make things happen. The formal part of the arbitration should ease into general discussion and then more into mediation and negotiation. If I have to rule I will and have done so but in an ideal situation the parties come to terms and to their mutual benefit.

Costs – one day of a hearing. My time to right a decision if I have to rule. Appraisal evidence, lawyers but again – all in one day. Quick, efficient and with the lowest costs possible.

The end will always come in a dispute, so why not start with the premise that all of us have to work to make that end happen as quickly as possible?