What Is Last Best Offer Arbitration in BC Family Law?

In British Columbia, there has been a major shift in family law toward mediation and arbitration.

Arbitration is largely successful, efficient, and makes a great deal of sense.

However, one challenge arbitration sometimes faces is perception. Because arbitration is not viewed by some parties as being as “official” or as powerful as a court order, parties who are unhappy with the outcome often try to appeal the result to the courts. They may believe that if arbitration does not go their way, court is the backup plan.

British Columbia courts have been very cautious about this. By way of policy, courts do not want parties using litigation as a second chance or an escape route after voluntarily choosing arbitration. If arbitration becomes nothing more than a trial run before court, the entire purpose of the process is lost.

This area of law continues to evolve. One of the most recent and important decisions on this issue is Kohut v. Yagelniski, 2026 BCSC 714. This case clarifies the principles courts apply when a party tries to appeal a family law arbitration award because they do not like the outcome. It also addresses the unique “last best offer” model – sometimes called baseball arbitration – which is becoming increasingly relevant in BC family law disputes.

In Part 1 of this two-part series, I want to break down exactly how last best offer arbitration works, what you are agreeing to when you choose this process, and what the real risks are before you sign on the dotted line.

What Is Arbitration in BC Family Law?

Before getting into the “last best offer” variation, here is a quick recap of what arbitration is in the family law context.

Under the Family Law Act, SBC 2011, c 25, parties to a family dispute can resolve their issues outside of court through arbitration. Rather than having a judge decide the outcome after a full trial, the parties select a private arbitrator – usually a senior family law lawyer – who hears the evidence and makes a legally binding decision called an arbitration award.

Arbitration can cover all the major issues in a separation:

• Division of property and debt
• Spousal support
• Child support
• Parenting arrangements

The arbitrator’s decision is enforceable like a court order. It is a legitimate, court-recognized process that many BC families use to avoid the cost, delay, and stress of litigation.

Not sure whether mediation, arbitration, or a settlement conference is right for you?  Read our guide on how to settle a family law case in BC.

What Makes “Last Best Offer” Arbitration Different?

Standard arbitration involves an arbitrator making their own independent findings and crafting their own decision based on the evidence. Last best offer arbitration is fundamentally different.

Here is how the process works:

1. Each party prepares one final, comprehensive settlement proposal
2. Everything they are asking for-property division, support, child-related expenses- gets packaged into a single document formatted as a final order
3. Both parties submit their last best offer to the arbitrator
4. The arbitrator picks one offer, in full
5. There is no blending, no middle ground, no adjustments

One offer wins entirely. The other loses entirely.

This is why it is sometimes called “baseball arbitration.” It mirrors the salary arbitration process used in Major League Baseball, where a player and a team each submit a number and the arbitrator picks one, with no ability to split the difference.

In Kohut v. Yagelniski, 2026 BCSC 714, the arbitrator confirmed this in writing: the parties had agreed he had no discretion to modify or adjust the terms of their proposals, nor to combine elements of one proposal with those of the other. It was all or nothing, and the parties knew it going in.

Why Would Anyone Choose This Process?

At first glance, last best offer arbitration sounds extreme. And honestly, it is a high-stakes process. So why do parties choose it?

The biggest driver is costs, control and finality. 

• the parties here had already spent a week in arbirtation and did not want to spend another 3 days on the arbitrator;
• they wanted to have control over the outcome or have the arbitrator come up with other scenerios aside from the ones they had picked themselves;
• the process was cheaper and speedier.

The process also encourages moderation. If you submit an unreasonable, lopsided offer, you risk losing to the other party’s more sensible one. Both parties tend to move toward what the law would actually provide, because that is the offer most likely to be selected as the “fairer” one.

 

The Critical Trade-Off: No right to substantive appeal

This is the part that people often do not fully appreciate until it is too late.

When you agree to last best offer arbitration, you are almost certainly also agreeing to give up written reasons for the decision. And when you give up reasons, you functionally give up the ability to appeal.

Under section 19.14 of the Family Law Act, parties can agree that no reasons will be provided for an arbitration award. In Kohut v. Yagelniski, the parties did exactly that.

What does waiving reasons actually mean?

Without written reasons, the court on appeal cannot determine:

• What the arbitrator found as fact
• What law the arbitrator applied
• Whether the arbitrator made any errors at all

In Kohut v. Yagelniski, Justice Wilson was explicit: the court cannot conclude the arbitrator agreed with every aspect of the winning offer, nor that he disagreed with all aspects of the losing one. Without reasons, there is nothing to review.

The court upheld the arbitration award in full, even while acknowledging that:

• Assets could have been divided differently
• A spousal support order could have been made
• Support obligations could have been different if a decision-maker had heard all the evidence and made findings

The appeal was dismissed even though the judge accepted the outcome might have been very different at trial. That is the deal you make with last best offer arbitration when you waive reasons.

What Grounds Remain to Challenge a Last Best Offer Award?

Agreeing to this process does not mean signing away all recourse. Under section 19.18 of the Family Law Act, the BC Supreme Court can still change or set aside an arbitration award in these circumstances:

• There are justifiable doubts about the arbitrator’s independence or impartiality
• A party was not provided a reasonable opportunity to be heard
• The award was obtained by fraud or duress
• The award deals with a dispute outside the scope of the arbitration agreement
• The arbitrator acted outside their authority

Additionally, under section 19.20(2) of the Family Law Act, any provision in an arbitration award that is inconsistent with the Family Law Act or the Divorce Act is simply not enforceable – even if everything else in the award stands.

This came up in Kohut v. Yagelniski around child support provisions that tried to prevent any review until 2028. The respondent ultimately conceded those provisions were unenforceable, but the rest of the award remained fully intact.

5 Key Questions to Ask Before You Agree

If your family lawyer or the other party’s lawyer raises the possibility of last best offer arbitration, ask yourself these questions first.

1. Are you prepared to live with the other party’s offer if the arbitrator chooses it? This is not a negotiation where you meet in the You could walk away with nothing you asked for.
2. Do you fully understand what you are giving up by waiving reasons? Once you agree to no reasons, your appellate rights are essentially hollow.
3. Is the evidentiary record complete? In Kohut Yagelniski, three planned days of evidence were cancelled when the parties switched processes. That incomplete record mattered significantly on appeal.
4. Are the disputes about legal position, not unresolved facts? Last best offer arbitration rewards the party whose offer is closest to what the law would actually If significant factual disputes remain unresolved, this process may not be the right fit.
5. Have you received full independent legal advice before making your offer? Your last best offer is not a starting It is your final one.

Last Best Offer Arbitration at a Glance

 Feature                   Last Best Offer Arbitration

Who decides           Arbitrator selects one offer in full Written reasons        Usually none – parties agree to waive

Ability to appeal      Extremely limited without reasons Flexibility   None – all or nothing

Best suited for         Cases where the record is complete and positions are close to what the law provides Biggest risk      Losing your entire offer with no meaningful path for review

Talk to a YLaw Mediator or Arbitrator

At YLaw, we believe mediation and arbitration are the best and most cost-effective ways to resolve family law disputes.

We have certified mediators and arbitrators in-house who have lived and breathed family law for decades, including Lisa Newby and Trudy Hopman  who can help you understand whether last best offer arbitration is right for your situation – and how to protect your position before you agree to anything. Contact us for all your arbitration matters, your will be in good hands. 

Continue reading: Part 2 –   Kohut v. Yagelniski, 2026 BCSC 714: What This BC Supreme Court Case Means for Family Law Arbitration

Frequently Asked Questions About Last Best Offer Arbitration in BC

What is last best offer arbitration in BC family law?

It is a process where both parties each submit one final settlement offer and a family law arbitrator selects one offer in full. The arbitrator cannot combine or adjust the two offers. The process is also called baseball arbitration or final offer selection.

Can you appeal a last best offer arbitration decision in BC?

Your appeal rights are very limited, especially if you agreed to waive written reasons. Without reasons, the court has no basis to review the arbitrator’s decision on substantive grounds such as property division, spousal support, or child support.

Is last best offer arbitration the same as baseball arbitration?

Yes. The terms are used interchangeably. The name comes from the salary arbitration process used in Major League Baseball.

What happens if part of a BC family law arbitration award is unenforceable?

Under section 19.20(2) of the Family Law Act, any provision inconsistent with the Act or the Divorce Act is simply unenforceable. The rest of the award remains in force.

How do I find a family law arbitrator in BC?

YLaw has certified family law arbitrators including Trudy Hopman and Lisa Newby who have decades of experience in family law. Call 604-974-9529 to book a consultation, or contact us here.