Mediation and Arbitration

Welcome to another insightful episode of the FH&P Lawyers Law Talk Podcast! Join host Clay Williams as he delves into the fascinating world of mediation and arbitration with associate Wendy Cheung. With her extensive experience as a litigator and a neutral facilitator, Wendy demystifies the roles of mediators and arbitrators, explaining how these processes can offer quicker, more confidential resolutions compared to traditional court proceedings. Tune in to discover how ADR can transform your approach to conflict resolution!

Clay: Welcome to another edition of the FH&P Lawyers Law Talk Podcast! I'm Clay Williams, and I'm a partner here at FH&P lawyers and with me today is Wendy Cheung! Welcome Wendy! 

Wendy: Thank you, thanks for having me. 

Clay: And so Wendy, you are an associate here, you've been here for a while now. How long have you been here for? 

Wendy: February 2019. 

Clay: Oh well, okay so it's been a bit. I know we worked together quite a bit and done some pretty cool stuff together 

Wendy: We have! 

Clay: and today you are going to tell us about your role as a mediator and an arbitrator. 

Wendy: Yes 

Clay: Okay, well what the heck is a mediator and what is an arbitrator? 

Wendy: Well, I'm also a lawyer, so in addition to being a litigator here. Mediation and arbitration is really just moving into a role of what we call in the industry a “neutral”. And a “mediator” is a person who facilitates disputes by hopefully getting the parties to come together and crafting their own resolution without having to go to court. 

An “arbitrator” is someone who almost acts like a judge. Presumably, by the time we go to arbitration, if the parties are unable to settle, let's say at a mediation, they would go to an arbitration and have someone who is a decision maker render a binding decision. 

Clay: Okay, so like I've heard it said that mediation is a consensual resolution. 

Wendy: That's right!

Clay: And when you're acting as a mediator, you don't have the power to actually tell the people how to deal with their dispute? Do you have to get them to come together? 

Wendy: That's right. And the goal is to try to have them communicate and elicit what we call the best interests of the clients. And sometimes the best interest isn't even about what they are actually fighting about. It could be some kind of underlying need that both parties feel - sometimes just even to be heard, and try to get them to come together and craft a solution that maybe even a judge wouldn't be able to craft. 

Clay: Well, actually that's interesting. You say that sometimes people just want to be heard. Actually I found that as well, sometimes you'll find that people are fighting for reasons that aren't really properly articulated. 

Wendy: Or can't be articulated. I mean sometimes if there's, let's say a shareholder dispute and the parties are actually family members, well there's usually some kind of underlying history relating to the family relations that may not be relevant, if we do bring it up in a court proceeding. 

Clay: Okay and when you act as an arbitrator, you are saying this is the resolution and live with it. 

Wendy: Yes. I mean they, basically the parties pitch to you the case as if they would in a courtroom. Except they've chosen a more streamlined approach, a more informal approach and you can potentially get to resolution faster. The other thing about arbitration too is that the process and the decision is confidential whereas if you go to court, and if there is a decision rendered it is made public. 

Clay: Actually that was my next question. Why do you get to an arbitration? We have this thing called the court and court is a very effective way of resolving a dispute. I'm hearing confidentiality as a reason. Is there any other reason that you would want to do an arbitration? 

Wendy: Yes. I mean again it's more of a streamlined approach. I've heard someone say it's like a "Choose Your Own Adventure Novel" and so when you go to court, there's a specific set of rules that you have to abide by in getting from day one - filing the claim to day let's say 300 when you finally appear before a judge. There are many steps in between that you have to do, that could add to the the cost, the legal fees. 

Whereas in arbitration you can choose to skip some of those steps, obviously with the agreement of the other party and the arbitrator so there could be some cost savings there. The other thing too is that the arbitrator actually works with you from start to end of the entire dispute, whereas if you go to court, you won't know who your judge is until the day you step foot in the courtroom. 

Clay: You know, with respect to arbitration, it's my experience that my clients kind of end up in an arbitration because it involves an agreement where they previously already agreed to be in an arbitration. I'm not as big a fan of arbitration, as I guess you are, being an arbitrator, because you know one of the downside is that you do have to pay for the arbitrator, so while there may be some cost savings in these steps, you're effectively paying for your judge. 

Wendy: That is true, so that is the one con - if you will, of arbitration. Typically you don't have to pay a judge, but you do pay an arbitrator hourly. Right now the going rates are pretty high. I think there is a component when let's say the parties have agreed to arbitration in a contract and then when they do dispute they are bound to this process, if either one of them so choose. I think there is almost a psychological component that if they have to pay for an arbitrator from day one maybe there's more of a desire to have it resolved earlier on to cap those fees. 

Clay: Well, that's the other thing I was going to say, you know one thing about our court system is it's pretty overloaded and counsel is overloaded and just getting a trial date getting this thing resolved can take years, and that doesn't necessarily have to be the case with arbitration. 

Wendy: Absolutely! You can get a dispute resolved in arbitration depending on the scope and the complexity of the case for as short as six months. Within six to maybe 18 months, whereas I think if you let's say run a similar type of dispute in court you can be looking at anywhere between two to maybe even six to seven years. 

Clay: Yeah it can take a long time depending on the dispute. So some of the arbitrations that I've been involved with, you know landlord intended in the commercial sphere - for our listeners, usually in a commercial lease, and when there's a renewal you could exercise your renewal, and if you can't agree on a new rent, then it goes to arbitration. There's an example oftentimes in acquisitions, there's working capital adjustments and those types of things. But then there's also all-encompassing things like with a share purchase all matters involved in the share purchases you have to go to sort of dispute. That's where I'm iffy sometimes because when you get a lot of different issues you know, I wonder if arbitration is the way to go but hey I'm just being, telling you what I think. I know you'd have a different perspective than that. 

Wendy: Absolutely! The thing too with arbitrations is sometimes even though the decision is binding and the process can still be lengthy to get there, there's still a review process for arbitrators so parties who don't necessarily like the decision of binding arbitration can still go through a process too. Typically it's called a judicial review and then that gets heard by a judge to decide whether or not the arbitrator made some sort of error 

Clay: Okay and so, I guess I should have asked you this right off the bat how do you get to be a mediator and an arbitrator? 

Wendy: Interestingly enough the mediation and arbitration industry, in British Columbia at least is not a regulated profession. Anyone can actually go out and hang their hat and call themselves a mediator or an arbitrator. that being said, you would probably market yourself a little bit better. If you do have some experience in disputes, whether as a legal counsel or in employment situations, union reps that of positions. The path that I went through was I took my education, I did my academics so for meditation there are courses you can take, I took mine through the continuing legal education of BC and I also went to Boston one summer and went to Harvard Law School and did a 40-hour training there and I also recently just did my arbitration training through Royal Roads University in Victoria. 

Clay: Okay, Harvard! That's pretty impressive! And is it the same process to become a mediator as it is to become an arbitrator or are they different paths? 

Wendy: Again, you can choose to not take any courses at all, you can just again choose to call yourself a mediator/arbitrator. The nature of the courses is different. the mediation courses, a lot of it is based on teaching you good listening skills, effective communication skills and you know language like a feedback loop. As mediators, we want to always feedback on what the other person says to us to make sure we understand and to make sure the person who's telling the neutral, the mediator what they feel, are their interests, they want to feel like they're hurt whereas in arbitration a lot of the academics basically is about how to render a fair and sound decision. 

Clay: Okay, you're right. There is a review process. You have to make sure you get your law right and deal with evidence properly. Maybe I'm wrong, but I would think that our listeners are probably going to be more familiar with or will end up in mediation more than in arbitration. And so I guess can you tell us what might our listeners expect if they were involved in a mediation? 

Wendy: Yes absolutely! First of all, for mediation, primarily you have to enter into it. Both parties have to enter into it voluntarily. Now there is a regulation in British Columbia, where you can force the other side to go to mediation. 

Clay: Well there's a bunch of regulations one in the construction one in personal injury... in some of the different fields and then there's a general one as well. 

Wendy: Exactly. So you could force someone to go to mediation, but for the most part, ideally, you would like the parties to go into the mediation because they want to because and that's step one. That's always step one right is getting that foot in the door because now the mediator knows okay you are here because you may want to avoid the uncertainty of trial and that you are both here because you hopefully want a resolution sooner rather than later. 

Clay: You know I'm not sure I agree with that statement I mean, there's a lot of times where we're you know in a litigation file where we will force a mediation. What's the problem? Why aren't we settling? What evidence do you have? Am I missing something in the case? So you know even if there isn't a settlement that's very useful to have that mediation, get a feel for what is going on, is it the client that has dug themselves in, or is the lawyer you know where is the point that we can that we need to know about here? 

Wendy: Absolutely. And often times if I'm putting my lawyer head on, I tell the clients that mediation is a process where it's almost like a bit of an investigation process for us to find out what the other side could rely on and may want to say if it doesn't settle, If it goes to trial. Now obviously the caveat there is everything that is exchanged in the course of mediation is what we called without prejudice so you can't use anything that is said, offered, conditionally accepted in a mediation and use it at trial as evidence. But certainly mediation, the process is good for more than just settlement. 

Clay: You know, I think of a case that we did recently and I think of the mediation and what we learned from that is these people aren't going to settle. There's no point in spending any more time on this, so let's just get this thing going to trial. Yeah so really a useful process 

Wendy: it is a very useful tool and sometimes you just need you know, let's say I'm acting for a client and the other the opposing counsel is acting for their client for a very long time. Sometimes, you almost need a different perspective to come in and if you don't want that different perspective to be a judge who's going to render a decision. You just might want to rely on the neutral - the mediator to maybe knock some sense into one or both even both of the parties. 

Clay: Yeah that's a good point I've done that many times with, you know oftentimes your mediator is a very experienced trial lawyer for instance and so if that person comes in and has the respect of both lawyers. You know I've had that speech you know “have you considered this or this or this” and that can certainly help as well.

Wendy: Yeah. The two primary styles of mediation are facilitative and evaluative. You can ask your mediator, “If you were a judge, what would you lean towards?” And they can give their opinion if you so ask, and that could very well influence the course of the resolution or the negotiations. And the thing about mediation is if it doesn't settle in that day that you have set aside for the mediation the momentum that was created in that one day could carry over until let's say the day before trial and parties can realize, well there's been something happening there since the mediation that has kind of led us to decide to resolve just shy of trial.

Clay: Do you have any comments upon about when parties should engage in mediation? Early? Later? I mean obviously you're going to take the advice of your counsel but do you have any personal thoughts about when that should happen? 

Wendy: You know I do. A lot of it depends on the nature of the dispute. I find for me that in a lot of contractual disputes, I actually like to encourage mediation. I've done this on some occasions and it's actually worked! I like to encourage mediation before the parties file their pleadings. And it's happened and it's been successful and I think for both parties it was the threat of filing of pleadings and then going down that path even though you can mediate the day after you file pleadings, but it was almost a threat of having that public document, in this case, both members, one was a more prominent member, it was a member who was in office who likely didn't prefer to have documents filed that could be public and so we had encouraged both parties to mediate prior to filing pleadings. Now we had actually exchanged pleadings but unfelt. so that so that the mediator had at least something to work off. And it settled!

Clay: Well that's a good story. I guess personally, you know my experience has been in the lawsuit document discovery usually, at least some oral discovery and then you kind of know the case you, know what that person's going to say, you know what the defences are and then it's just really you know, assessing risk and how much. 

Wendy: Yeah I would say 85% of the time we engage mediation in some with some seriousness after examination for discovery. 

Clay: Do you have anything else to say about mediation or arbitration that I haven't asked you about? 

Wendy: It's a great tool. ADR is a great tool for today, again we have a short and ADR just for our listeners, stands for Alternative Dispute Resolution, and it includes mediation, includes arbitration and it even includes negotiations. So you know the pre-mediation,  pre-arbitration stage where counsel is just exchanging without prejudice letters right? They are all useful tools in light of the fact that right now we are dealing with with a shortage of Judges. We're dealing with long waiting times for court times, and you know one of the things right now is that we are all just such busy professionals and individuals, even with individuals dealing with disputes we just want some certainty. And if time is precious to you, then I would strongly encourage that your counsel talk you through ADR options mediation or arbitration to help facilitate a faster resolution whether it's binding or whether it's one you craft with the other part of yourself 

Clay: Fantastic! I hope you learned something about mediation and arbitration, till next time! 

Questions? We're ready to help. Please contact Clay Williams or Wendy Cheung, or any of the team at FH&P Lawyers.

Disclaimer: This material is provided for informational purposes only and should not be construed as legal advice on any subject matter. Consult with a qualified lawyer for advice on specific legal issues.