Trials and Arbitrations: Similarities and Differences

Written by: Daime Vezzosi, Student-at-Law

If a civil lawsuit in Alberta cannot be resolved, either a trial or an arbitration can be utilized to obtain a legally binding decision.

This article explores the similarities and differences between trials and arbitrations and is of interest to anyone involved in an active civil lawsuit in Alberta.

Definition and Purpose

Arbitration is a form of alternative dispute resolution as it does not involve going to court.

In an arbitration, a decision-maker known as the arbitrator is appointed by the parties to hear the dispute and render a legally binding decision just like a Judge would if the matter were being heard in court.

Arbitrators are typically either lawyers with expertise in the area of law being argued, and in some cases can include retired Judges or Justices.

Arbitration is a voluntary process unless the parties have otherwise agreed to use arbitration to resolve any disputes as specified in a contract.

Arbitration clauses are often found in commercial, labor, and consumer contracts, providing a quicker alternative to the formal court system.

A trial, on the other hand, is a formal judicial proceeding in which a case is presented before a Judge or Justice in a court of law. The trial process follows strict procedural rules, and the Judge or Justice renders a verdict based on the facts and law presented during the trial.

Process and Procedure

One of the key distinctions between arbitration and trial is the difference in process and formality.

In Alberta, trial procedures are strictly governed by the Alberta Rules of Court (Alta Reg 124/2010) and the Alberta Evidence Act (RSA 2000, c A-18), which dictate admissible evidence, procedural requirements, and the presentation of arguments.

While arbitrators are also bound by legal rules, arbitration allows for greater procedural flexibility compared to trials.

For instance, in a trial, parties must conduct an examination-in-chief, where a witness is initially questioned by the party that called them to testify. In arbitration, however, an arbitrator may waive this requirement and instead request affidavits in chief, allowing witnesses to provide written testimony, which can then be subject to cross-examination.

This flexibility can streamline the arbitration process, reducing its duration. However, it may also increase the parties' workload, as they must prepare detailed affidavits in advance.

This example illustrates how arbitration can be more adaptable than a trial. Parties can agree to waive certain procedural requirements or leave such decisions to the arbitrator’s discretion.

In Alberta, arbitrators operate under the Arbitration Act (RSA 2000, c A-43), which grants them significant discretion in shaping procedural aspects of arbitration. Within legal limits, arbitrators can adopt a more pragmatic and efficient approach to hearing and admitting evidence—an option unavailable in a formal trial setting.

Cost and Time

Arbitration is often a faster alternative to booking a trial in court, but arbitration is not less expensive.

In arbitration, the parties are responsible for paying for the arbitrator or arbitration panel’s time whereas with a trial you do not pay for a Judge's or Justice's time absent trial fees which are much less than paying for an arbitrator.

Due to the arbitration process moving much faster than a traditional court trial, there is less opportunity to spread out the cost of legal fees over a number of years as with a trial. As a result, parties may need to pay a significant portion of the costs upfront rather than amortizing them over a longer period.

In arbitration, there is rarely any form of discovery (questioning) done in advance of the hearing whereas discovery is required to proceed to trial unless a waiver is granted. Discovery is a costly and time-consuming process and the common exclusion of discovery from arbitration is one reason the arbitration process is typically much faster than going to trial.

Booking a trial in Alberta is a multi-year process and can only be done once certain steps in the litigation process have been completed. Further, booking trial dates is subject to judicial availability.

Finality and Enforcement

The decision in an Arbitration, known as an Award, is both final and legally binding. Once an Arbitral Award is granted it can be converted into a court judgment under the Arbitration Act to allow for the Award to be enforced the same as if it was a judgment from a trial of the court.

Similar to a decision of a judge/justice at trial, an Arbitration Award can be appealed to court. Appealing a decision, whether an Award or Judgment, is a complicated matter and we recommend speaking to a lawyer for legal advice on an appeal.

Conclusion

Arbitration offers a quicker and more flexible approach to obtaining a final decision in a lawsuit than a trial. Absent a term in a contract requiring the parties to attend arbitration, arbitration is a voluntary process that requires the consent of the parties involved.

If the parties are willing to attend arbitration and pay for the costs involved, arbitration offers a faster path to a final decision than the traditional court trial.

There are advantages and disadvantages to both arbitration and the court trial. If you are party to a lawsuit and do not have a lawyer of your own, we encourage you to contact a member of our litigation team for advice on next steps and whether or not your case may be a candidate for arbitration.

*Disclaimer: This article provides legal information and is not intended nor to be construed to provide legal advice.