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Mediation and arbitration in co-ownership issues

by Mᵉ Yves Papineau, PAPINEAU AVOCATS inc.

 After several years of gestation, the new Code of Civil Procedure was adopted by the Quebec legislature, and its entry into force is planned for January 2016. The changes to the Quebec civil procedure are numerous and significant, and beyond the nomenclature or purely procedural aspects, the new Code is promoting a whole new judicial culture.

 Indeed, among other innovations, the new code differs from its predecessor by the strong emphasis it puts on alternative means of conflict resolution. The two major alternative means of dispute resolution are mediation and arbitration, to which we will now devote a few lines.

Here is how the new Code defines "mediation" :

605.  A mediator is chosen, directly or through a third person, by mutual agreement of the parties.      

The mediator helps the parties to engage in dialogue, clarify their views, define the issues in dispute, identify their needs and interests, explore solutions and reach, if possible, a mutually satisfactory agreement.  The parties may ask the mediator to develop with them a proposal to prevent or resolve the dispute.

The mediator is required to draw the parties' attention to any conflict of interesr or any situation that may be seen to create a conflict of interest or that may cast doubt on the mediator's impartiality.

As for arbitration, the new Code provides for the following definition:

620. Arbitration is the submission of a dispute to an arbitrator for a decision in accordance with the rules of law, and, if appropriate, for a determination  of damages. The arbitrator may act as amiable compositeur if the parties have so agreed.  In all instances, the arbitrator decides the dispute in accordance with the stipulations of the contract between the parties and takes into account any applicable usages.

The arbitrator's mission also includes attempting to reconcile the parties, if they so request and circumstances permit, and continuing the arbitration process, with the parties' express consent, if the conciliation attempt fails.

 It is clear, given the two above definitions, that mediation is a more conciliatory process that aimaing at reaching an agreement between the parties, while arbitration is more like a form of "private" justice  where power of decision, reminding that of a judge, has contractually been given to a third party.

 But beyond knowing what the legislator meant by mediation and arbitration, an important question arises : why does he put so much legislative emphasis on them ? Some may say that this is a way to relieve the Quebec courts in " privatizing " dispute resolution. They are not wrong about the first point : if justice heals legal ailments, mediation and arbitration certainly help prevent them or heal them faster.

The legislator's enthusiasm for alternative methods of dispute settlement is justified: the legal adage that a bad settlement is better than a good judgment is truthful. Indeed, mediation or arbitration in many ways are more interesting than going to trial.

Their main advantage is time saving. It is well known in the legal community and the general public that the Quebec courts are often congested, and it can take several months - if not years from the initiation of procedures to obtain a judgment. However, as private and alternative dispute resolution processes, mediation and arbitration do not generally suffer such delays, thereby finding a solution much quicker than by going to court. In some cases, litigation can even be set within one month, depending on the complexity of the case, the availability of the parties and of the selected mediator or arbitrator.

However, mediation and arbitration should not be praised too fast as being less expensive solutions than the usual court process. At this point, one must not generalize: it is not all of the disputes that may be settled at lower cost. Mediation and arbitration both involve inherent costs, including those incurred for the services of a mediator or arbitrator. However, given the speed of these processes, there is still a real opportunity to settle disputes at a lower cost than would be required by obtaining a court decision..

It should also be noted that despite their name of alternative dispute prevention and resolution processes, the parties may turn to mediation and arbitration after usual court proceedings have begun. Indeed, Article 19 para. 3 of the new Code of Civil Procedure expressly allows parties to refer their dispute to mediation or arbitration during the proceedings. The door remains always open to parties who may wish to opt along the way for a negotiated settlement (mediation) or a faster decision than a court judgment (arbitration).

In conclusion, the innovations introduced by the new Code of Civil Procedure as to the alternative means of conflict resolution are intended first and foremost for the benefit of the defendant, who will now have a better frame to resolve the issues that he is facing faster and potentially at a lower cost.

In my opinion, co-ownership will be healthier when the conflicts arising from time to time will no longer need to be judicialized and will be resolved in a much shorter time.  This will prevent disputes from escalating and create bitterness between the residents of a building.

Declarations of co-ownership foresaw a long time ago the benefits of those alternatives. The amendment to the Code of Civil Procedure only confirms the usefulness and relevance of such dispute resolution processes.

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