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CASELAW UPDATE: How enforceable is my Arbitration Agreement?

Posted on February 9, 2018

Are you wondering how your arbitration agreement will hold up in Court?

In Horowitz v Nightingale 2017 ONSC 2168, after ending their 16 year marriage, Mr. and Ms. Horowitz entered into negotiations which resulted in a written agreement between them called a “consent” or “minutes of settlement”. In their written agreement, the Horowitzs agreed and decided upon issues of custody, access and division of property. The Horowitzs, with the help of their lawyers, included standard written terms to agree to Arbitrate the outstanding issues of child and spousal support later.

The standard terms became an issue when Ms. Horowitz fired her lawyer and refused to proceed to arbitration, contrary to their agreement. Interestingly, the court in Horowitz found that the parties’ agreement to arbitrate was unenforceable. This was explained by the fact that while the arbitration wording was on its face an “arbitration agreement” under the Arbitration Act, it did not satisfy the formal requirements of the Act.

It is not uncommon for dispute resolution clauses such as the one in Horowitz to be included in separation agreements. However, since Horowitz, it has been suggested that standard arbitration wording in family law agreements may be found to be unenforceable, regardless the fact that the parties may have agreed to them. The potential impact since Horowitz is that parties may no longer sit comfortably in relying on the standard form clauses for alternate dispute resolution. The result is more work for lawyers to ensure that the technical requirements of the Act are followed.

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