Family Law Arbitration 


Arbitration is very similar to going to court, in that both sides present their case to a third person and then allow him or her to decide the matters in dispute. The process is often more formal than collaborative practice and mediation, with rules for evidence and a more rigid structure. The main difference between it and the regular court system is that it is private and that you choose the arbitrator.

Before beginning arbitration, you and your partner will discuss possible forms of appeal if arbitration does not work. You will also choose whether the arbitration will be binding or nonbinding. If it is binding, the arbitrator's decision is enforceable.



At MacDonald & Partners LLP, we encourage the use of arbitration if it's the right process for your separation. Our Toronto family law arbitration lawyers will discuss the many advantages and disadvantages of divorce arbitration services, including:

  • When you choose your arbitrator, you may be able to choose someone who is particularly familiar with an area of importance to your case such as family-owned businesses or pensions.
  • You must pay the arbitrator's fees as well as your lawyer's fees, which may make the process more expensive than litigation in some circumstances.
  • The process may be considerably faster than regular litigation.
  • If you choose to engage in mediation/arbitration, in which the mediator can become the arbitrator if you are unable to reach resolution on any of your issues, the arbitrator will be familiar with your situation, which may save a great deal of time.
  • If you are not satisfied with your mediator in mediation/arbitration, you may not be pleased that he or she has the power to decide your remaining issues as arbitrator.

Frequently Asked Questions (FAQs):

The best interests of the children is the governing principle for determining all questions relating to their parenting. Many parents are able to put aside their differences on the adult level and by concentrating on the children’s needs, work out the most suitable parenting plan in the circumstances. Sometimes they will need help from a family professional with a background in social work to better understand what their children are going through and to help them manage any emotional conflict that interferes with the discussion staying on track. Your lawyer can make a referral for this purpose. A prime consideration in the planning will be to determine how you and the other parent can continue to be involved with the children and remain a significant part of their lives. In circumstances where the relationship between the parents is too damaged to co-operate on the planning, some variation of sole custody to one parent subject to access by the other parent is usually negotiated or ordered.
Married spouses (but not unmarried spouses or common law spouses), upon their separation, are entitled to a division of the property acquired by them during cohabitation under the marriage. However, it is not the property, itself, which is divided; it is the value of the property. The process involves an accounting of the value in a procedure that creates a debt owed by one spouse to the other, not a right to a physical partition and transfer of actual property. Subject to certain exclusionary rules, property of every kind acquired during the marriage comes into the accounting -- the value of land and buildings, bank accounts, pensions, accounts receivable, and everything else the value of which can be expressed in dollars. The property acquired during the marriage can be the increases (gains) in value of property that was owned at the time of the wedding, as well as the value of the several items of property purchased after the wedding. The values used in the division process are net of debts and liabilities; that is, the debts and liabilities are deducted from the positive value of the property. To calculate the payment owing by one spouse to the other, an accounting is made of the "net family property for each spouse". Generally speaking, net family property is a spouse's net worth (assets less liabilities) at time of separation less the spouse's net worth at the time of the wedding (except for a matrimonial home that is owned at the time of the wedding). In the ordinary case, the debt created or the payment that is owing is one-half the difference between the greater net family property and the lesser net family property. The spouse with the greater net family property owes this amount to the other spouse. Because this payment balances the values of the property holdings of the spouses, the payment is called an "equalization payment." Where an equalization payment would be "unconscionable" the division of the difference between the net family properties is adjusted to be more or less than one-half. An example of a calculation of an equalization payment is:

Husband Wife
Value of property, date of separation $200,000 $350,000
Value of property, date of marriage 15,000 50,000
Net family property $185,000 $300,000
Difference between nfp's $115,000
($300,000 - $185,000 = $115,000
One-half the difference is $57,500
($115,000 / 2 = $57,500
Wife pays this amount to Husband 57,500 (57,500)
Value of holdings after equalization payment $242,500 $242,500
There are five methods available to resolve these issues, and some of them can be used in combination with others. The five methods are:

Collaborative Practice;
Arbitration; and,

Each of these five methods will be discussed in turn.

Negotiation: In traditional negotiations, the lawyers for the parties explore each other’s positions on the issues involved and attempt to reach a mutually acceptable solution that avoids a trial. The process generally involves identifying the issues, exchanging all information relevant to the issues, submitting positions on the issues and the reasons for taking those positions, and exchanging offers and counter-offers.

Mediation: This method involves the use of a third party to help the parties set the agenda for the discussion of the issues and to facilitate this discussion toward agreement. The parties, not the mediator, make the decisions on the issues and the final decision on whether or not they are resolved in a way acceptable for recording in a formal agreement. The mediator has no power to force the parties to agree, or to decided the issues if they cannot. The mediation may be conducted with or without lawyers for the parties being present during the sessions to assist with the mediation. There are two types of mediation; open and closed. Open mediation is “withprejudice”. This means that if the mediation is unsuccessful, whatever is said in the sessions can be used in subsequent litigation or other proceedings. Sometimes at the request of the parties, the mediator will prepare a report containing an assessment of the issues presented in the mediation and the recommendations of the mediator. The benefit of open mediation is that the work done is not lost if the parties fail to settle. The disadvantage is that the parties, knowing what they say may be used against them in some other proceeding, become more guarded in the information exchanged and more polarized in their claims. Closed Mediation means that whatever is said is “without prejudice”. All communication in the mediation and any position taken is confidential and cannot be raised again in any other context. The advantage is that the clients are more open in the exchange of information, are less positional and negotiate more freely. What may be seen as a disadvantage is that if they do not settle their differences, no report can be obtained from the mediator for use in court either by way of a written report or by calling the mediator to give evidence as a witness. If the mediation is successful, the mediator will prepare a summary of the issues and their resolution which the parties then take to their lawyers for independent legal advice and the preparation of an agreement.

Collaborative Practice: In a sense, collaborative practice is mediation without a mediator. Each party is represented by a lawyer specially trained in the process and the parties and the lawyers enter into a commitment not to litigate. Instead of a confrontation in a “me against you” approach the lawyers and the clients work together to attack the problem and not each other. It’s a problem-solving exercise, not a fight, with the lawyers each protecting the interests of his or her client while advancing toward a “win-win” outcome. During the process, the clients retain control over the agenda and the outcome with the lawyers providing legal protection, negotiation coaching, and conflict mediation. Modern methods of dispute resolution are used in place of traditional positional bargaining. The process builds on the parties’ willingness to settle and appeals to the individual’s higher self -- looking to the future and refusing to become embroiled in the faults of the past. Depending on the needs of the parties and their family, other professionals with training in the collaborative process may be involved. These include financial planners with a background in accounting, or family professionals acting as child specialists or divorce coaches, who come from the fields of social work psychology.

Arbitration: This method involves appointing a third party to decide certain issues in much the same way that a judge would. The arbitration process can range from a full hearing similar to a trial with the arbitrator making an award (like a judgment) at the end of the hearing, down to a process resembling mediation with the distinction that the arbitrator acting as a mediator is empowered to decide certain issues, if the parties do not agree (mediation/arbitration). The advantage is that the clients can select the individual they want as an arbitrator (as opposed to the court system where a judge is assigned without consultation with the parties). And generally, arbitration is more expedient than the court process and less expensive. The disadvantage of arbitration is that the decision-making powers are taken away from the parties and given to a third person.

Litigation: Litigation is the court process that ends in a trial, if the matter is not settled along the way. The parties have much less control over the process than they do in the other methods of dispute resolution. Unless agreement is reached, decisions are made by a judge based on the evidence presented. Resort to this method may be necessary where there is no trust between the parties and co-operation is not possible; or the parties are entrenched in extreme positions and unwilling to compromise; or there is a pathological relationship. Sometimes, even in less dramatic situations, it is necessary to take steps in a legal proceeding for temporary orders to obtain, say, a stable arrangement for the parenting of children or financial support, or simply to bring the other party to the negotiating table. Whatever the reason for starting a legal proceeding, the chances of it going all the way to trial are remote. With the encouragement of the court, at some stage the parties and their lawyers usually find enough common ground to resolve the matter on mutually acceptable terms without further court involvement.
After spouses separate, they may live together for the purposes of reconciliation for up to ninety days at a single stretch or for several shorter periods totalling ninety days without interrupting the running of the time for divorce. For instance, if the spouses separate on May 1st, get back together for the month of June, and again for a number of days here and there for a total of ninety days or less, but are unsuccessful at reconciling their differences, the running time of the year that started May 1st is not interrupted for divorce purposes.

We can help you find a resolution that will help your family move on.

if you are going through family issues or a relationship breakdown in the Greater Toronto Area, contact the laywers at MacDonald & Partners LLP and come into our office, in downtown Toronto, Etobicoke, Oakville and North York.