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<xTITLE>Canada – Court Acknowledges Commercial Interest in Arbitration as Alternative to Court Litigation</xTITLE>

Canada – Court Acknowledges Commercial Interest in Arbitration as Alternative to Court Litigation

by Daniel Urbas
October 2020 Daniel Urbas

This article was first published on Urbas Arbitral, here.

In Hannam v. Medicine Hat School District No. 76, 2020 ABCA 343, Alberta’s Court of Appeal assessed the practical significance of its earlier five (5) judge panel decision in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49 which considered the benefits of summary judgment set out in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87.  In doing so, the majority and dissent both commented on the promised benefits of arbitration in contrast to court litigation.  The present note highlights those passages to illustrate contemporary comments by the courts.

The appeal considered the new summary judgment rules in the Alberta Rules of Court, Alta Reg 124/2010].

This appeal gives the Court an opportunity to assess the practical significance of Weir-Jones, evaluate its place in historical evolution of summary judgment, and suggest other possible protocols that may allow courts to increase the likelihood that more disputes will be resolved as soon as possible at the least expense without sacrificing the quality of the adjudication and the fairness of the proceeding”.

As part of its analysis of the role for summary judgment, the Court, in its majority reasons and in dissent, included comments supportive of arbitration as an alternative to the courts.

For the majority, Mr. Justice Thomas W. Wakeling and Mr. Justice Keven Feehan provided the following observations when introducing, at para. 46, its analysis on summary judgment’s role as a “Valuable Option in Modern Civil Procedure System”:

[46] The value of summary judgment and summary trial as dispute resolution processes increases as the amount of time that separates the commencement of actions and their final trial resolutions and the costs associated with conventional trials escalates. Business dislikes uncertainty that litigation delay inevitably introduces. Uncertainty undermines the reliability of transactions and imperils investment returns. Most litigants crave predictability, finality and abhor delay. The financial and emotional costs of unresolved disputes may be debilitating. Prolonged delays also undermine public confidence in the administration of justice and encourage disputants to utilize private mechanisms to resolve their differences.An 1885 American Bar Association report laments that “[a]lready we see arbitration committees in large departments of business supplanting the courts”.

[47] This has been the case in England and the United States for a very long time.

[48] It is certainly true in Alberta today and it has been for many years. Currently the amount of time that separates the date an action is commenced in Alberta and the date it is resolved by trial is trending upwards. Until this trend is reversed, Alberta litigants will have a high interest in having access to a workable expedited dispute resolution procedure – summary judgment or summary trial. Or they will continue to take their commercial business elsewhere – private dispute resolution”.

In addition to footnotes 47-58 to the majority’s reasons, see in particular the following from footnote 56:

fn [56] See Hryniak v. Mauldin, 2014 SCC 7, ¶ 1; [2014] 1 S.C.R. 27, 92 (“without public adjudication of civil cases, the development of the common law is stunted”) & Royal Commission on the Dispatch of Business at Common Law 1934-36, Final Report 31 (1936) (“This preference of the commercial community for the settlement of their disputes by arbitration is due, no doubt, to its greater freedom from appeals; its informality, privacy and friendly atmosphere; the saving of the great expense of copying documents; and, above all, the fact that the issue is determined speedily and on a fixed date, arranged to suit the convenience of the maximum number of parties concerned in the dispute”)”.

In dissent, Mr. Justice Brian O’Ferrall had the following comments.

[180] Part 7 of the [Alberta Rules of Court, Alta Reg 124/2010] presents three separate protocols – trial of a question or issue, summary judgment, and summary trial – that are designed to reduce the amount of time and cost needed to resolve a proceeding commenced under the Alberta Rules of Court.

[181] The underlying premise of Part 7 is that the features a dispute displays may determine the parts of the litigation spectrum that must be accessed to fairly and accurately resolve it. The corollary of this is that some disputes may be fairly and accurately adjudicated without accessing all the discrete stages of the procedural spectrum or limiting the use a party may make of a discrete litigation stage. An example of the latter condition is a time limit on the questioning process.

[182] A large number of commercial disputes are resolved by private arbitrators in an abbreviated dispute resolution process. This dispute resolution process accords the parties little more than an opportunity to present witnesses and cross-examine their adversaries’ witnesses and make written or oral argument or both. And this system works. The disputants, as a rule, are satisfied that they are fairly heard and accept the outcome as the product of a rational process. The fact that they are willing to return to the private forum is the best proof that they are satisfied with the protocol.

[183] But some disputes are of such a nature that the parties must be allowed to access every procedural stage that the civil process offers and make unlimited use of it to ensure that justice is done. Disputes on complex material facts and those in which one or both of the parties do not abide by the rules or court orders are two obvious examples of this type of dispute”.

In addition to footnotes 252-256 to the dissent, see in particular footnote 255:

fn [255] J. Casey, Arbitration Law of Canada: Practice and Procedure 237 (3d ed. 2017) (“The strength of the arbitral process is the ability to tailor the procedure to the dispute at hand. A skilled arbitrator can … help the parties devise a process that cuts to the core of the dispute, but maintains the essential elements of fairness and due process”) & D. Sutton, J. Gill, Q.C., & M. Gearing, Q.C., Russell on Arbitration 242-43 (24th ed. 2015) (“The parties may prefer a quick and cheap resolution of their dispute to a slow, expensive solution, and may be prepared, up to a point, to bear any consequent cutting down of the opportunities to put their case across. At one extreme, the procedure in an arbitration may be very similar to that applicable to proceedings in the larger and more complex cases that come before the court, with full oral hearings, strict adherence to the rules of evidence, pleadings, extensive disclosure of documents, and factual and expert witnesses. At the other extreme, it may be agreed that the tribunal should decide the dispute on the basis of a limited range of documents, with no hearings, pleadings or submissions (oral or written). Between these extremes procedures may be modified or mixed as desired”)”.

urbitral note – First, the arguments for and against summary judgment can apply with modifications to commercial arbitration and the increased interest in arbitral jurisdiction to grant dispositive motions.

Second, the majority’s and dissent’s comments on the pros and cons of summary judgment can serve by analogy to the pros and cons of arbitration.  As mentioned by the dissent, some parties want “to access every procedural stage that the civil process offers” and, as mentioned by the majority when footnoting Hryniak v. Mauldin, “without public adjudication of civil cases, the development of the common law is stunted”. In recent years, robust procedural rules made available by institutional administered arbitration or adopted by investor-state dispute resolution, and post-publication of awards do serve in part to address those concerns.

The courts’ interest in summary judgment and mention of arbitration do not suggest that the latter provides the former. Rather, the courts only comment on litigant’s interest in getting to the merits as a reason to choose arbitration and not that the choice for downgrading the quality of the procedure accepted when opting for arbitration.

 

Biography


Daniel Urbas is an experienced litigator, arbitrator and mediator with over 25 years of dispute resolution experience. He has earned a variety of repeat, annual peer recognitions including “Leading Lawyer” in “Commercial Arbitration” in the 2019 edition of the Lexpert ® / American Lawyer Guide to the Leading 500 Lawyers in Canada, “Most Frequently Recommended” in the 2019 edition of The Canadian Legal Lexpert® Directory for Commercial Arbitration, “Thought Leader” in 2019 edition of Who’s Who Legal – Litigation and AV® Preeminent™ by Martindale-Hubbell®.
 

Daniel focuses exclusively on serving as an arbitrator and mediator.  As arbitrator, Daniel serves as a sole arbitrator, as chair or as party-nominated member of three (3) member arbitration tribunals. His appointments have been made by individual parties, by the parties jointly on consent, by court orders and by various administering institutions including ICC, CCAC and IATA.
 

A Fellow of the Chartered Institute of Arbitrators (“CIArb”) based in London, UK, as well as a founding Director of the CIArb’s Canada Branch, Daniel is listed on various rosters including general commercial rosters organized by the ICDR, CIETAC and BCICAC and on more specialized, industry/activity specific rosters such as the Canada Transport Agency’s roster.

 

Daniel’s dispute resolution experience spans a variety of commercial and civil matters, intellectual property (including anti-piracy and anti-counterfeiting litigation) and information technologies, energy (wind, bio), natural resources (mining, forestry, fishing), shareholder disputes, real estate and lease disputes, product liability, construction, distribution and franchise, Aboriginal law matters including treaty and land claims litigation and dispute resolution of agreements relating to governance and natural resource development on native peoples’ territories.

 

He handled trial and appellate advocacy, as well as urgent and extraordinary applications. He has appeared before the provincial and federal courts, including the Supreme Court of Canada, as well as before arbitration tribunals and various administrative tribunals. Fluently bilingual in both English and French with degrees in both Common Law and Civil Law, Daniel is an active member of the Barreau du Québec, the Law Society of Ontario and the Law Society of British Columbia.  At his former national law firm, up until June 2017, Daniel served as Regional Leader of the International Trade Litigation and Arbitration group and Regional Leader of the Intellectual Property Litigation group. Formerly, Daniel was also Regional Leader of the Commercial Litigation group and National Leader of the Intellectual Property Litigation group.



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