Understanding Your Appeal Rights in Arbitration

When you enter into a mediation or arbitration process, you will be required to sign a mediation-arbitration agreement. Among other things, this agreement sets out what appeal rights you will or will not have after the arbitrator makes their decision.

Appeal rights describe when and how you can ask a higher court, usually the Court of King’s Bench, to review the arbitrator’s decision. Depending on the type of appeal rights you choose, your ability to appeal can be very broad or very limited, as explained below

Your options are:

• Appeal on an error in law (the arbitrator got the legal test wrong)
• Appeal on an error in fact (the arbitrator got the evidence wrong)
• Appeal on an error of mixed fact and law (the arbitrator applied the evidence to the law incorrectly)
• Appeal on all or some of the above
• Appeal in accordance with the Arbitration Act (a question of law, with permission of the court)

Each choice has its own advantages and risks. Understanding them will help you decide what level of oversight and finality you want in your arbitration process.

1. Appealing on an Error in Law

A question of law is about whether the arbitrator applied the correct legal test.

Example: If the arbitrator uses a “deliberate evasion” test for imputing income when the law in Alberta actually requires a “reasonableness” test, that is an error of law.

• How courts review it: Courts use a standard of correctness, meaning they will closely examine whether the arbitrator applied the law properly.
• Pros: Ensures the arbitrator cannot apply the wrong law without oversight.
• Cons: Limited to legal issues only, not the facts of your case.

2. Appealing on an Error in Fact

A question of fact relates to what actually happened. Arbitrators hear witnesses, review evidence, and are best placed to make these findings.

Example: In a family law case, determining the correct date of cohabitation or date of separation often requires a finding of fact as to when one party moved in, or moved out.

On appeal, courts usually give deference to the arbitrator’s view unless it is clearly wrong.

• Pros: Gives you the chance to challenge factual mistakes.
• Cons: Harder to win, since courts prefer not to interfere with findings the arbitrator made after hearing (or reading) evidence.

3. Appealing on an Error of Mixed Fact and Law

Sometimes facts and law are so intertwined that you cannot separate them. These are questions of mixed fact and law.

Example: Deciding whether two people lived together long enough to qualify as adult interdependent partners requires both factual findings (how much time they spent in the same residence) and legal interpretation (how the law defines “living with”).

• Pros: Covers cases where mistakes happen in applying legal rules to the facts.
• Cons: Courts still give deference to the arbitrator on the factual elements.

4. Appealing on All or Some of the Above

You can also agree to have the broadest appeal rights, meaning you may appeal on law, fact, or mixed fact and law. This gives you maximum opportunity to challenge the arbitrator’s decision if you believe an error was made.

• Pros: The broadest safety net if you want to preserve every possible right of appeal.
• Cons: This can reduce the efficiency and finality of arbitration, as it increases the likelihood that one or both parties will appeal. It can lead to a process that it more costly and time-consuming.

5. Appealing in Accordance with the Arbitration Act (Law Only, With Permission)

If your agreement does not provide for broader appeal rights, the Arbitration Act allows appeals on a question of law with permission of the court.

This leads to a two-step process where the appealing party is required to make an initial application for permission to appeal, before they can proceed with the appeal itself.

The court will only grant permission if:

• The issue is important enough to justify the time and cost of an appeal, and
• The legal error could significantly affect your rights.
• Pros: Provides a safeguard against strictly legal mistakes.
• Cons: Narrow grounds and an extra step of convincing the court to grant permission.

This is often referred to as the narrowest appeal right.

Finality vs Correctness

When deciding on appeal rights, you are really deciding between two competing values:

• Certainty: Waiving appeal rights or choosing narrower rights means your matter is more likely to end sooner, with fewer steps and less cost. The downside is that if you are unhappy with the decision, you are more likely stuck with it.
• Correctness: Choosing broader rights means you can challenge more types of errors, but at the risk of additional time, complexity, and expense involved in the higher likelihood of an appeal.

Deciding on your appeal rights in arbitration is about finding the balance between speed, cost, and protection from mistakes. There is no universal ‘best’ option. It depends on your priorities and your comfort with risk. If you are preparing to sign a mediation-arbitration agreement, take time to think about what matters most to you and seek advice before making your choice.