What is arbitration for contractor disputes?

Arbitration is a private dispute resolution process where a neutral third party makes a binding decision on your contractor dispute, often faster and less expensive than going to court in Ottawa.

In Ontario, arbitration for construction disputes typically involves hiring a qualified arbitrator (often a lawyer or construction expert) who reviews evidence from both you and your contractor, then issues a legally binding decision that both parties must follow.

How Arbitration Works in Ottawa Construction Disputes

Most construction contracts in Ontario include an arbitration clause requiring disputes to go through this process before court. The arbitrator acts like a private judge, reviewing contracts, photos, expert reports, and testimony from both sides. Unlike mediation where the mediator just facilitates discussion, the arbitrator's decision is final and enforceable through Ontario courts.

The process typically takes 3-6 months compared to 1-2 years for court litigation. Costs usually range from $5,000-$15,000 total (split between parties) versus $20,000+ for court cases. You'll need to pay for the arbitrator's time (usually $300-$500/hour), hearing room rental, and any expert witnesses.

When Arbitration Makes Sense

Arbitration works well for disputes over contract interpretation, quality of work, change orders, or payment issues where the amount in dispute is substantial (typically $10,000+). It's particularly effective when you have clear documentation - contracts, photos, correspondence, and expert opinions about defective work.

For smaller disputes under $5,000, consider the City of Ottawa's mediation services first, or Small Claims Court which caps at $35,000 in Ontario. For disputes involving licensing violations, contact ESA (electrical issues) at 1-877-372-7233 or TSSA (gas/HVAC) before pursuing arbitration.

What to Watch For

Be careful of arbitration clauses that heavily favor the contractor - some specify arbitrators from other provinces or require you to pay all costs upfront. Ontario's Consumer Protection Act provides some protection, but commercial arbitration clauses can be binding even if seemingly unfair.

Always try direct negotiation first, then mediation through services like the Better Business Bureau or Ontario's consumer mediation services. Document everything throughout your project to strengthen your position if arbitration becomes necessary.

Official Resources

Contact the Arbitration and Mediation Institute of Ontario at amiontario.ca for qualified arbitrators, or consult with a construction lawyer who can review your contract's arbitration clause. The Ontario Consumer Protection Office (ontario.ca/consumer or 1-800-889-9768) can advise on your rights before entering arbitration.