What is Litigation?
Litigation refers to any court proceeding that is commenced by one or more "plaintiffs" against one or more "defendants" that is to be heard and decided by a government-appointed judge and/or a jury that is composed of members of the local community.
What is Arbitration?
Arbitration is a method of resolving disputes outside of the courts. A dispute is heard and decided by one or more independent people who are called "arbitrators". Arbitrators' decisions are legally binding.
Who May Commence an Arbitration Proceeding?
There are a few situations where an arbitration proceeding may be commenced, including the following:
Before a dispute arose, the plaintiff and defendant entered into a contract which states that future disputes between them are to be resolved by arbitration.
After a dispute arises, the plaintiff and defendant agree to submit their dispute to arbitration.
The plaintiff wishes to commence an arbitration proceeding against any defendant who is required either by law or regulations to submit a dispute to arbitration. A good example of this is that investment dealers that are regulated by the Investment Industry Regulatory Organization of Canada are generally required to participate in arbitration if an investment dealer's client chooses to commence an arbitration proceeding against them.