Arbitration was supposed to be a simpler and hence less costly alternative to the court system. Unfortunately, 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. Obviously, 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.
In one case involving a Toronto tavern, by the time it came to me the landlord and tenant had been disputing the rental rate and options to renew for three 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 five 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.
Yonge Street, downtown core of Toronto. Fast food franchise. 18 months of negotiation between landlord and tenant and tenant was in a precarious 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 three 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 that business continues to thrive in its prime location.
What I do is somewhat different. I do not sit and just passively listen and write notes. Of course 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 solid comparable data, not rhetoric; bare bones appraisal. If a party is going off track, my job is not to let it run but to make the discussions relevant and to guide the parties 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. I do rule, if the parties cannot come to terms and in most cases, the parties do want a ruling from a neutral party.
Costs – we agree on one day of a hearing. Add in my time to write a decision and review of all documents. There is of course independent appraisal evidence, lawyers, sometimes an interpreter but no matter what, all in one day.
I acknowledge that there are many complex situations and although the one day hearing works for most matters, it does not apply to all. The one day, when agreed to by the parties offers the most efficient method and with the lowest costs possible.
One strong rule when discussing your case with any arbitrator, do not get into details as to what rent you want to pay or receive. Discuss the reasons for the arbitration, why the parties cannot agree and general terms. At all times the arbitrator must remain neutral and therefore can listen to you but will not render any comments about the particulars of the dispute. The arbitrator will discuss the procedure, advice about retaining possible experts or a lawyer and the costs involved. That is the role when first contacted.
As an arbitrator and mediator, I received my certificate from the Arbitrators Institute of Canada Incorporated in 1988 and have conducted numerous hearings over the decades. My speciality relates to real estate and most of my hearing involve commercial landlord-tenant disputes although I have dealt with construction and commission disputes as well.