What happens if a contract forces me to use arbitration instead of going to court in Ontario?

If a contract contains a mandatory arbitration clause, Ontario courts will generally give effect to it. Under the Arbitration Act, 1991 (for domestic disputes) and the International Commercial Arbitration Act, 2017 (for international matters), an Ontario court may stay (pause) your lawsuit and direct the parties to proceed through arbitration as agreed in the contract.

Arbitration is a private dispute resolution process where one or more arbitrators — often retired judges or experienced lawyers — hear both sides and issue a binding decision called an award. It can be faster and more confidential than court, but it also limits your ability to appeal decisions, and arbitration costs (arbitrator fees and hearing costs) can be significant.

Not all arbitration clauses are enforced. Ontario courts have declined to enforce arbitration clauses in certain consumer contracts where the clause is found to be unconscionable or where legislation protects a consumer's right to go to court. Ontario's Consumer Protection Act, 2002 and other consumer statutes may limit the use of mandatory arbitration clauses in consumer agreements.

If you are facing an arbitration clause in a dispute, review it carefully with a lawyer. The clause may limit your remedies, specify rules and timelines, or require arbitration in a particular location.