On December 7, 2011 at its annual Meet N Greet, the ADR Institute of Ontario demonstrated two dispute resolution options for a franchise dispute in which a franchisee objected to an operational change initiated by the franchisor.
The dispute was first mediated and I served as mediator. Then it was arbitrated and three colleagues served as arbitrators.
Mediation differed materially from arbitration insofar as the business people were concerned.
In the mediation, the franchisee and franchisor participated directly in the discussions together with their lawyers. For instance, the franchisee explained the economic and personal impact of the operational change from her point of view. The franchisor heard the franchisee's comments first-hand and was able to immediately respond. The pivotal question in the mediation was whether the franchisor was prepared to acknowlege the legitimacy of the franchisee's concerns and respond to them in a meaningful way.
By contrast, in the arbitration the lawyers assumed a primary role and discussions covered collateral topics such as the prospect of expert witnesses, document exchanges, oral discoveries and how much time the hearing would take. The oral exchanges were in the nature of submissions to the arbitrators who ruled on contested issues one at a time. The franchisee and franchisor seemed relegated to the position of observers despite the fact that the dispute was theirs.
While both processes are valid choices, the demonstration evoked an interesting response from the audience composed of ADR practitioners. A majority of observers concluded that arbitration is a last resort and every effort should be made to achieve a negotiated or mediated resolution.
Genevieve Chornenki
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