Regulation on the guarantee plan for new residential buildings ARBITRATION COSTS

For several years, access to justice has been at the heart of numerous debates: delays that are too long, processes that are too expensive. It is therefore no coincidence that led the legislator to provide for alternative dispute resolution methods, in the event of dissatisfaction of the beneficiary or the contractor, following the issuance of a decision by a guarantee plan administrator for new residential buildings, in particular arbitration (1). Reputed to be faster than traditional justice, is arbitration more expensive? What are the costs associated with an arbitration under the Regulation on the guarantee plan for new residential buildings.

At the outset, it is necessary to identify the various costs involved in conducting an arbitration, the most frequent of which are the costs of arbitration (arbitrator fees and administrative costs), expert fees and expenses.

Arbitration costs

It is the arbitration body that is authorized to draw up an account of the costs of arbitration in order to be paid (2). For this purpose, the Regulation states that in cases where the beneficiary is the claimant, the costs are borne by the administrator, unless the beneficiary is successful in any aspect of the claim. In such a case, it is up to the arbitrator to decide the costs between the beneficiary and the administrator (3).

In cases where the contractor is the applicant, the Regulation stipulates that the costs of the arbitration are shared equally between the arbitrator and the administrator (4). Also, taking into account the sharing of costs, the contractor will generally have to pay an advance for costs at the request of the arbitration body under penalty of seeing its request for arbitration.” Considered abandoned ” (5).

Expertise fees

As with civil court cases, parties often use an expert in arbitrations. The Regulation therefore provides that it is for the arbitrator to rule on the quantity of the reasonable costs of relevant expertise that the administrator must reimburse to the beneficiary if the beneficiary wins the claim in full or in part (6) and, since the recent amendments of 1 January 2015, the arbitrator must now rule on the quantity of the expert fees that the administrator and the contractor must jointly reimburse to the beneficiary in cases where the beneficiary is not the claimant.

For the entrepreneur, since the Regulation is silent about its expertise fees, these are not reimbursable by the administrator.

Expenses

As a general rule, conducting an arbitration involves expenses: extrajudicial fees, photocopying costs, photocopying costs, travel, parking, mailing costs, etc. Also, unlike the other costs that generally follow the outcome of the arbitration request, the expenses incurred by the parties, the beneficiary or the contractor are borne by each of them (7) and are not reimbursable.

Finally, knowing that the Regulation on the guarantee plan for new residential buildings was established in order to protect beneficiaries, it is understandable why the legislator has chosen to make recourse to arbitration at almost zero cost for them in cases where they are successful. Nevertheless, the beneficiaries must remain in good faith in the process otherwise their abuse will be sanctioned by the arbitrator and must assume all the costs (8). So it's a think about it!

DID YOU KNOW THAT?
According to sections 10 (6) and 27 (6) of the New Residential Buildings Guarantee Plan Regulation, which were added in the amendments that came into force on 1 January 2015, the contractor is now required to relocate the beneficiaries when he carries out corrective work that renders the building uninhabitable after it has been received.

(1) Sections 19 and 35 of the Regulation on the guarantee plan for new residential buildings
(2) Section 123 of Regulation on the guarantee plan for new residential buildings
(3) Sections 21 and 37 of the Regulation on the guarantee plan for new residential buildings
(4) Ibid
(5) Section 117.1 of Regulation on the guarantee plan for new residential buildings
(6) Sections 22, 38 and 124 of Regulation on the guarantee plan for new residential buildings
(7) Sections 23, 39 and 125 of Regulation on the guarantee plan for new residential buildings
(8) Domicil Real Estate Corporation Inc. and Amégah, Me Karine Poulin, arbitrator, Custom Arbitration and Mediation Group (GAMM), 2014-09-12

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