Family law disputes reap many benefits from arbitration. Whether the dispute centres on property, support, custody or access, the most intimate and personal details of the parties’ lives are exposed. It is also difficult to move on with life if one’s case is tied up in court proceedings for years.
Arbitration offers a confidential and speedy dispute resolution that is increasingly used in Ontario. While family law arbitrations present opportunities, there are also pitfalls.
Different rules apply to family arbitrations. The Arbitration Act, 1991 sets out a general framework for the conduct, appeals and enforcement of arbitration awards. Under regular domestic arbitrations, the law takes a laissez-faire approach that allows parties to conduct their arbitration (mostly) as they see fit. Subject to certain exceptions, parties can contract out of most of the act’s requirements.
Family arbitrations, however, are much more regulated. They are governed by the Arbitration Act, the Family Arbitration Regulations 134/07, the Family Law Act and the Family Law Rules. Understanding how the various provisions of these acts and regulations work together is important because, as recent cases have shown, failure to abide by even technical requirements will render a resulting family arbitration award unenforceable.
The arbitration agreement itself
A family arbitration is defined as one that “deals with matters that could be dealt with in a marriage contract, separation agreement, cohabitation agreement or paternity agreement.” Family arbitration agreements must follow mandatory rules to be enforceable.
First, the Arbitration Act, 1991 allows for oral arbitration agreements. This is not the case for family arbitration agreements, which must be in writing and comply with the Family Arbitration Regulation 134/07. The regulations contain standard provisions that must be included in all family arbitration agreements. The agreement must identify the applicable law and the parties’ appeal rights. The parties must also confirm that they have received independent legal advice. The arbitrator must sign the agreement, confirm that they have received the mandated training and certify that the parties were separately screened for power imbalances. All of the requirements are mandatory. In Horowitz v. Nightingale, the court refused to stay court proceedings in favour of arbitration where the arbitration agreement did not comply with the mandatory formalities.
Unlike other domestic arbitrations, family arbitrations must be conducted exclusively in accordance with the law of Ontario or of another Canadian jurisdiction. If the family arbitration is conducted under any other law, the resulting award will be of no force and effect. Moreover, unlike regular arbitrations, parties cannot exclude the arbitrator’s jurisdiction to apply equity and order specific performance, injunctions and other equitable remedies.
Regular arbitration agreements can deal with disputes that have not yet arisen. Family arbitration agreements cannot. A family arbitration agreement is not enforceable unless it is entered into after the dispute has arisen.
The conduct of the arbitration
Under the Arbitration Act, parties must object to any non-compliance with a provision of that act or the agreement within a reasonable time. If there is no objection, a party is deemed to have waived the right to object. Because of the inherent potential for power imbalances and important rights at stake, such as children’s best interests, this rule does not apply to family arbitrations. Parties do not lose their right to object to non-compliance for having missed a deadline or failed to object within a reasonable time.
In addition, there are no specific record-keeping requirements under regular domestic arbitrations. In family arbitration, however, arbitrators must create a record containing the evidence presented and considered, as well as the notes taken at the hearing. The arbitrator must also keep a record of the certificates of independent legal advice and the report on the results of the screening for power imbalances. The arbitrator must retain these records for at least 10 years after the award is rendered.
Appeals and enforcement
The Arbitration Act is among the most permissive of arbitration legislation when it comes to appeal rights. The parties may agree that the award be subject to appeal or that the arbitrator’s decision is final and binding with no right of appeal.
Family arbitration agreements cannot exclude a right of appeal. The regulations require the arbitration agreement to specify whether the award may be appealed in accordance with the Arbitration Act’s default appeal provision (on a question of law with leave) or the parties may specify appeals as of right on questions of fact, law or mixed fact and law.
Family arbitration awards must be appealed to the Family Court in the areas where it has jurisdiction or the Superior Court of Justice in the rest of Ontario. The Family Law Rules apply to appeals of family arbitration awards. The procedure applicable to appeals is set out in Rule 38.46. If leave to appeal is required, it must be obtained by motion under Rule 14. Appeals of regular domestic arbitrations on the other hand are appealed by way of application under the Rules of Civil Procedure.
The procedure to enforce an award depends on whether or not there are ongoing family law court proceedings. If there are, the party seeking enforcement must bring a motion in that proceeding. If there are no ongoing family law proceedings, the party seeking enforcement must bring an application under Rule 32.1.
It is important to keep these differences in mind when selecting arbitration as a method of dispute resolution. Parties to a family law dispute wish their dispute to be dealt with as swiftly, cheaply and privately as possible. But having a dispute resolved by arbitration will not accomplish these goals if the resulting award is unenforceable.
Alexandre Kaufman is a senior counsel with the Department of Justice in Ottawa and has a civil litigation practice focused on administrative law and commercial disputes. He is the co-author of the Annotated Arbitration Act, 1991 and Annotated Ontario Arbitration Legislation and a part-time professor at the University of Ottawa’s faculty of law.