What is arbitration for contractor disputes?

Arbitration is a private dispute resolution process where an independent arbitrator makes a binding decision on contractor disputes in Ottawa, offering a faster and less expensive alternative to court litigation.

In Ontario, arbitration for construction disputes typically involves hiring a neutral third party (the arbitrator) who reviews evidence from both the homeowner and contractor, then makes a legally binding decision that both parties must follow. This process is particularly valuable for Ottawa homeowners dealing with contract disputes, defective work, or payment disagreements.

How Arbitration Works in Ontario

The arbitration process begins when both parties agree to submit their dispute to arbitration, either through a clause in their original contract or by mutual agreement after the dispute arises. The Ontario Arbitration Act governs this process, ensuring it follows established legal procedures while remaining more flexible than court proceedings.

You'll typically select an arbitrator with construction industry expertise - many are retired judges, lawyers, or experienced construction professionals. In the Ottawa area, organizations like ADR Chambers and the Ontario General Contractors Association maintain lists of qualified construction arbitrators.

The process involves each side presenting their case, including contracts, photos, expert reports, and witness testimony. The arbitrator reviews all evidence and makes a binding decision, usually within 30-90 days depending on complexity. This timeline is significantly faster than Ottawa's civil court system, where construction disputes can take 18-24 months to resolve.

Costs and Considerations

Arbitration costs in Ontario typically range from $5,000 to $25,000 depending on the dispute value and complexity. While this seems expensive, it's often less than litigation costs when you factor in court fees, extended legal representation, and lost time. The arbitrator's fees are usually split between both parties, though the losing party may be ordered to pay additional costs.

When to Consider Arbitration

Arbitration works best for disputes involving $25,000 or more, defective work claims, contract interpretation issues, or payment disputes where both parties want a definitive resolution. It's particularly effective when technical construction issues require expert analysis that judges might not possess.

However, arbitration isn't always the right choice. For smaller disputes under $25,000, Ontario's Small Claims Court (maximum $35,000) might be more cost-effective. For disputes involving fraud, criminal activity, or where you need emergency court orders to stop work, traditional litigation may be necessary.

Protection and Alternatives

Before considering arbitration, Ottawa homeowners should first attempt direct negotiation, then mediation through services like the Ontario Consumer Protection office or local Better Business Bureau. Many contractor disputes can be resolved through these less expensive methods.

Always ensure any arbitration clause in your contract is fair and doesn't prevent you from accessing other legal remedies. Some contractors include one-sided arbitration clauses that favor them - have a lawyer review these before signing.

Key Ottawa Resources:

• Ontario Consumer Protection: 1-800-889-9768


• ADR Chambers (arbitration services): adrchambers.com


• Law Society of Ontario referral service: 1-800-268-8326


• Small Claims Court (Ottawa): 161 Elgin Street, 613-239-1243

Remember, the best protection is hiring properly licensed contractors with good references and clear contracts upfront, reducing the likelihood of disputes requiring arbitration.