The use of arbitration is on the rise. More and more employers require workers to sign mandatory arbitration agreements, keeping conflicts like employment discrimination and wrongful termination out of the courts. We're also seeing a major uptick in intellectual property and technology disputes handled through arbitration.
Arbitration clauses are finding their way into a growing number of consumer contracts, spanning everything from cell phone agreements and home purchases to car rentals and cable service providers. There is also a widespread movement to use arbitration as an alternative to litigation for international commercial disputes.
Virtual arbitration, the use of artificial intelligence (AI) in arbitration, and the emergence of arbitration analytics all point toward the expansion and rapid evolution of the practice.
Yet, despite its growing importance in the world of alternative dispute resolution (ADR), a number of myths persist about the nature and process of arbitration.
We rounded up some of the most common of these, based on questions we hear from students in arbitration training and general misconceptions we know are out there.
Read on for an overview of arbitration myths and facts, and some helpful information on training and professional designations.
Myth: Arbitrators are totally unregulated in Canada
It is true that arbitrators in Canada are not legally required to complete any specific training or licensing process. However, it would be incorrect to say the profession is totally unregulated.
The ADR Institute of Canada (ADRIC) provides two highly regarded designations for arbitrators. ADRIC sets high standards for training and professional practice, which provide a clear framework for self-regulation.
New arbitrators begin by earning the Qualified Arbitrator (Q.Arb) designation. After gaining practical experience, they can pursue the Chartered Arbitrator (C.Arb) designation.
To qualify as a C.Arb, you must prove that you have chaired at least 10 paid arbitrations, and submit 2 written awards for review.
Learn more about both ADRIC designations here: Arbitration Designations
Myth: Arbitration procedure is formal and Rigid
In fact, arbitration is a very flexible form of alternative dispute resolution. Parties can choose the arbitrator, as well as the location, parameters, and rules of procedure.
In part, flexibility is what makes arbitration often less time-consuming and costly than litigation.
Myth: Arbitration awards cannot be appealed
It is true that arbitration awards are legally binding and difficult to appeal. In most cases, appeals are only permitted on limited grounds, such as the incapacity of a party, an invalid agreement, or a violation of law or public policy.
However, there are provisions for appeal, such as an appellate arbitration procedure. Parties can agree to include an appeal clause in their arbitration agreement, which allows awards to be challenged and lays out the rules for doing so.
Myth: Arbitration limits the scope of discovery
Discovery is a key part of the litigation process, in which parties exchange and disclose information and evidence pertaining to the case. Discovery includes depositions, requests for documents, interrogatories, medical examinations, inspections of property, etc.
Many people believe arbitration limits the scope of discovery, restricting the exchange of key information and leaving parties vulnerable to unpleasant surprises.
But the truth is in arbitration, the participating parties make the rules. They decide on the scope and duration of discovery. Like other aspects of arbitration, the process is flexible.
Myth: Arbitrators are limited to only a few practice areas
In fact, arbitrators can deal with a wide variety of disputes. From family disputes to international commercial conflicts, arbitrators enjoy a range of practice areas and specializations.
Experienced arbitrator and instructor, David Merrigan, says arbitrators often find a niche—an area of practice in which they have extensive experience and are considered subject matter experts.
According to Merrigan, the options are virtually limitless.
“Arbitrators can deal with a wide variety of disputes. For instance, arbitration is widely used in labour relations, business and consumer disputes, intellectual property, sports, construction, international trade deals, and torts.
Theoretically, any dispute can be resolved through arbitration, upon consent of the parties involved in the dispute. Arbitrators often specialize in an area in which they have academic credentials or work experience.”
Myth: It’s Arbitrator or Mediator—you can’t do both
Many arbitrators are also skilled mediators, and vice-versa. You do not have to pick just one path. In fact, many arbitrations begin with mediation.
Kat Bellamano is an experienced ADR professional who practices both mediation and arbitration. She holds both the Chartered Arbitrator and Chartered Mediator designations from ADRIC. Kat says it’s very useful to have skills (and be prepared to offer services) in both areas.
“I don’t think a practitioner has to decide between the two. Many, including myself, do both. Mediation and Arbitration are part of the range of dispute resolution options available to people and groups who are managing disputes. Many practitioners like to have a number of different tools in their toolbox to meet those needs.”
Myths: All Arbitrators are Lawyers
It is true that many arbitrators are lawyers or retired judges. However, one does not need a law degree to qualify for designations through ADRIC and become a successful arbitrator.
Non-lawyers can choose a niche where they have specialized knowledge and experience, and arbitrate disputes in that field.
For example, someone with extensive experience in labour relations, who has been an employment or union representative, can transfer those skills to the area of labour arbitration.
Merrigan recommends looking objectively at your training and background and choosing an area of practice where you could be considered a subject matter expert.
“The first step is to take an inventory of your own interests, aptitudes, and education. Although many arbitrators have a legal background, there is room in this profession for those who do not, if they can bring value in other areas.
For instance, engineers and other specialists within trades can often find a niche in arbitrating disputes that deal with that type of complex subject matter. The same would apply to labour arbitration or sports arbitration.”
Learn more about becoming an arbitrator
Whether you have a legal background or not, your first step in becoming an arbitrator is to complete an Arbitration course that is approved by ADRIC.
Approved arbitration training is required to obtain the entry-level Q.Arb designation. Among other requirements, applicants must complete an approved 40-hour training course that includes a written exam.
See full application requirements here: Criteria to become a Qualified Arbitrator (Q.Arb)
Kompass Professional Development offers Canada’s only ADRIC-approved online Arbitration training.
This 10-week course is taught by experts, delivered totally online, and includes 14 hours of mandatory role play and mock hearings.
Meet the instructor and learn more about the course: Meet Kat Bellamano: Your Guide to Our Accredited Arbitration Training
Or, click below to explore the Arbitration for Professional Certificate and see details on costs, curriculum, and instructors. An Advisor is available via online chat to answer your questions.