Family Law and Private Arbitration

Over the last 20 years, legislation has been introduced across Canada to allow spouses to resolve family law disputes using private arbitration as an alternative to the court process.

Arbitration is a voluntary agreement between spouses to appoint a private arbitrator to settle issues related to division of property, spousal support and child support. The arbitrator will then make a final decision that is binding on both parties.

One of the advantages of arbitration is that the parties have more control over the process of the arbitration in terms of how the issues are presented, which evidence will be included, and how long the hearing will last. This often means that the legal costs involved are greatly reduced.

In 2003, as a means to promote private arbitration in family law matters, Ontario passed the Ontario Arbitration Act, which gave spouses the right to use private arbitration to resolve family disputes. The Act also gave spouses the right to choose the type of law (Canadian or non-Canadian) upon which their issues would be decided.

In 2006, amidst concerns that arbitration using non-Canadian laws would violate the gender equality provisions of the Canadian Charter of Rights and Freedoms, the Ontario government reversed its decision by requiring that all private arbitration be in accordance with Ontario law. One of the main concerns that led to this reversal was that a women’s right to consent to private arbitration would be violated in cases where they are compelled by the commandments of the religion to submit to these laws.

However, the application of Canadian laws based on the principle of freedom of contract has also raised issues related to fairness and gender equality.

In the decision of Hartshorne v. Hartshorne in 2004, a couple signed a marriage agreement on the day of their wedding. Both spouses obtained independent legal advice and the wife’s lawyer advised her that the agreement was “grossly unfair,” but she signed it anyway. The majority of the judges on the Supreme Court upheld the marriage agreement because of the wife’s decision to sign, however 3 of the 9 Judges issued a dissenting opinion stating that her signature should not have been sufficient to alleviate the substantive unfairness of the agreement.

More recent court decisions in Ontario and B.C., have upheld Maher agreements in cases where they were fair, and where they did not conflict with Canadian law. This suggests that the values of freedom religion and gender equality are not necessarily incompatible, and that a more flexible approach the choice of law used in private arbitrations could help reduce the costs of resolving family disputes so that all Canadians have access to justice.

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