Choosing a mediator/arbitrator with subject matter expertise requires extra care to avoid potential conflicts arising from existing professional relationships between the arbitrator, parties’ counsel and experts.
In MDG Computers Canada Inc. et al. v. MDG Kingston Inc. et al., 2013 ONSC 5436 (CanLII), the court removed an arbitrator because of a prior connection he had with an expert witness who was to testify in the arbitration. The case involved a dispute between a franchisee and franchisor over compliance with Ontario’s franchise disclosure legislation. The arbitrator was an experienced franchise lawyer and the parties were aware that he had acted for a franchisee in a case that involved similar issues. When the franchisee delivered an expert report, it emerged that, while acting as counsel in an unrelated case, the arbitrator used the same expert to support his then client. The franchisor asked the arbitrator to remove himself. When the arbitrator refused to do so, the franchisor brought a motion to have the arbitrator removed for bias. The franchisor argued that the arbitrator could not fairly determine the expert’s qualifications, expertise and credibility, or assess the expert evidence in the arbitration regarding similar issues. The franchisee argued that there was no evidence of any actual bias and that consideration must be given to the fact that the franchise law bar is small and specialized, with a small pool of arbitrators. The franchisee argued more generally that a finding of bias in these circumstances could open the floodgates to claims that any arbitrator who still represents clients as counsel could be conflicted out.
The court did not agree. The arbitrator was removed. The court held that the test is objective, and that no actual or intended bias need be shown. The court stated that the test for the removal of the arbitrator was whether an informed person, viewing the matter realistically and practically, would conclude the arbitrator is seized with an attitude or predilection for bias.
The court found that the professional relationship between the arbitrator and the expert in past franchise disputes did give rise to a reasonable apprehension of bias and directed the parties to appoint a new arbitrator. Costs were ordered in favour of the franchisor, plus the parties suffered costs thrown away for arbitration fees and also suffered time delays.
So what can parties and arbitrators do to avoid this problem?
Lawyers and parties who opt for Mediation/Arbitration or Arbitration should retain an arbitrator that no longer represents parties as counsel in similar disputes. The arbitrator should disclose all of their past relevant personal and professional relationships with counsel, parties and expert witnesses as soon as possible. Accept that not all conflicts – actual or perceived – can be predicted and when this occurs the best solution is to step down and allow the parties to retain a new arbitrator.
Choosing an arbitrator requires special care. Not only should the process be fair. It should be perceived to be fair. Some arbitrators will deny bias for self-serving reasons. Doing so hurts the parties, but moreover, hurts the reputation of Mediation/Arbitration as a fair process.
In one of my past Mediation/Arbitration cases, my client felt that the arbitrator was consistently siding with the other party. She felt that his past pronouncements demonstrated bias. She was worried that he could not provide a fair hearing. She asked him to step down. The arbitrator refused. She brought a motion for him to step down. He still refused. She ran out of money to return to court for an order to remove this arbitrator. In the end, the client was deprived of procedural fairness, but worse, the utility of Mediation/Arbitration was undermined by this arbitrator.
In another Mediation/Arbitration case of mine, after the parties and counsel signed the Mediation/Arbitration Agreement with the arbitrator, one party changed counsel. It was discovered that the new counsel had previously been a junior lawyer for the arbitrator. When the issue of potential conflict was raised, this arbitrator acted with the utmost of integrity. He declared that there was no actual conflict, but decided to step down to avoid even the appearance bias. This arbitrator guaranteed procedural fairness and elevated the reputation of Mediation/Arbitration through his self-less demonstration of ethics.
These experiences proved to me that arbitrators have a heightened ethical responsibility – to both the parties and to the administration of justice.
Mediation/Arbitration is an excellent dispute resolution process that provides speedy, fair and inexpensive access to the resolution of legal disputes by a legal expert in that subject matter. However, the arbitrator, counsel and parties must ensure that the process is fair and is perceived to be fair – from beginning to end.
This article was recently published at LexisNexis LAW360 at https://www.law360.ca/ca/pulse/articles/2363943/choosing-a-mediator-arbitrator-balancing-expertise-v-bias
Steve Benmor, B.Sc., LL.B., LL.M. (Family Law), C.S., Cert.F.Med., C.Arb., FDRP PC, is the founder and principal lawyer of Benmor Family Law Group, a boutique matrimonial law firm in downtown Toronto. He is a Certified Specialist in Family Law, a Certified Specialist in Parenting Coordination and was admitted as a Fellow to the prestigious International Academy of Family Lawyers. Steve is regularly retained as a Divorce Mediator/Arbitrator and Parenting Coordinator. Steve uses his 30 years of in-depth knowledge of family law, court-room experience and expert problem-solving skills in Divorce Mediation/Arbitration to help spouses reach fair, fast and cooperative divorce settlements without the financial losses, emotional costs and lengthy delays from divorce court.
Editorial note: This article was first published in July 2025 and is republished here for reference.
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