Comments on the Law Reform Commission working paper on arbitration

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You have asked me to consider Law Reform Commission working paper on arbitration from the point of view that is concerned with the protection of civil liberties.

I understand that in practice, your concern is to ensure that ordinary persons not possessed of great means or political influence may be dealt with, and be seen to be dealt with fairly, if for some reason they are involved in the arbitration process. It was from this point of view that I reviewed the proposals and the materials set forth in the Law Reform Commission’s working paper.

Perhaps it would be as well to start out with a look backwards at the history of arbitration.

Arbitration in English history has had a close relationship with the dealing of merchants both English and foreign, and the adjustments of their disputes.

The British Columbia Arbitration Act is, in fact, the English Act of 1893 with very few amendments. The English Act, in turn, was basically a codification of the existing case law concerning arbitration and the earlier statutes on the subject.

The balance of this letter is not concerned with the adjudication of disputes between businessmen, or more realistically, differences between corporate entities who have ongoing business relationships with each other. The writer feels that their concerns with the arbitration process are somewhat different and more narrow than the concerns of your Association.

The writer is however concerned with the expansion of the use of arbitration processes to deal with disputes between private citizens and large corporate entities and, more commonly, disputes between citizens and governmental agencies where arbitration is provided as a method of resolving differences.

The writer lacks the expertise that comes only with close and continuing involvement with labour relations problems to comment on whether or not arbitration procedures might be improved in that special area. His only remark is that from discussions with practitioners in the area, arbitration procedures as presently used are probably a “least worst” approach to the problem.

You might wish to consider, however, whether or not the present rules and case law providing for the duties of unions to carry out arbitrations for their members, and for resolution of disputes between unions and their members, provide adequate protection for the working persons concerned.

To continue with the main theme, arbitration as a method of settling disputes is often presented as quick, relatively informal, and allowing relief without the worries of the mine fields that law courts may hold for the unwary.

It is also thought in many circumstances to have certain advantages of economy.

As the Law Reform Commission points out, these advantages are often illusory.

Consider the case of an expropriation under the Municipal Act or the Highways Act, which require a reference if the expropriating authority and the landowner cannot agree to a three person arbitration. That is to say, each of the two parties appoints an arbitrator and the two arbitrators together appoint a third.

By the nature of proceedings, counsel are almost invariably retained, evidence presented, and evaluators or appraisers are cross-examined by counsel for the person’s adverse interest.

Due to the difficulty coordinating the schedules of counsel, the board members and the witnesses, the proceedings can quite literally take years,

The expense, delay and uncertainty of the result do not reflect well on the process.

The proposals put forth by the Law Reform Commission, taken in this context, do nothing to deal with crux of the problem. That is to say the arbitrator appointed by each side in fact acts as an advocate for the party who appoints him or her, and the chairperson or umpire is usually isolated with the ultimate decision making authority. To the extent the claimants are not adequately represented, this may go a great distance towards correcting what would otherwise be an injustice. To the extent, however, that representation is adequate, the three-person panel merely increases the costs and delays, and the time of obtaining a decision, without, as far as the writer is aware, any substantive improvement in the quality of the decisions rendered.

It is respectfully submitted that, as a point of general principal, three person panels ought to be severely limited in their application, and one person panels (i.e. a single arbitrator) should be the norm in all arbitrations.

It should be open, however, to a party to an arbitration to sit a three person panel on the grounds that the evidence is of such a technical nature that an arbitrator might well require the assistance of experts to assess the evidence. The analogy is to the existing Supreme Court Rules, where a Judge may have an assessor or assessors appointed to assist him or her.

If the parties cannot agree that a three person panel is appropriate, there should be provision made that the matter can be put before a Supreme Court Judge, in Chambers, for a decision as to the appropriateness of a three person panel under the circumstances of a particular case.

As a great number of arbitrations are between the government and citizens, with the government able to access ot only civil service lawyers, but lawyers in private practice of high standing and repute, it is respectfully submitted that any scheme of civil legal aid ought to include provision for the retention of counsels in arbitrations where a person’s livelihood, or the greater part of his or her personal assets, are involved.

In reviewing the Commission’s proposals, the writer is of the view that the recommendations that allow arbitrators to extend the time for the hearings, subject only to an appeal for the removal of an arbitrator for misconduct, are in a sense retrograde. Perhaps more reasonable time limits could be enforced, coupled with a provision that extending time limits for entering into the arbitration and rendering a decision, could be made on an application to a Supreme Court Judge for cause only, and that neither the parties, nor the arbitrators, could consent to the extension of time.

In the event that either of the parties to an arbitration is not satisfied with the arbitrator’s fees, it should be open to the aggrieved party to have the arbitrator’s fee reviewed by a Supreme Court judge. The judge ought to have the authority, in the event that he or she feels that there is a case for review, to refer the matter of the arbitrator’s fees to a taxation before the District Registrar in the Supreme Court, in the same manner as an account presented under the Barristers and Solicitors Act.

If three persons panels are to be continued, and the writer suggests that there are good reasons for discontinuing this practice for statutory arbitrations, then the provision whereby the majority of the board or panel can take all steps for and on behalf of the whole panel, are of assistance.

The Law Reform Commission working paper has dealt extensively with the interaction between the Courts and the arbitration process.

From the writer’s point of view, the Commission is on the right track in limiting the Scott v. Avery clauses and the Atlantic Shipping clauses. These clauses, in effect, sharply limit judicial supervision of the arbitral process. The Commission’s recommendations limiting the Courts’ right to intervene by reference, by way of a stated case, are reasonable and ought to be encouraged. In order to avoid ambiguity, the arbitrator’s award, however, ought to be in writing and signed to become effective.

The question of re-opening an award to correct a mistake, deal with fresh evidence, or deal with unanswered points, is a double-edged sword. On one hand, maximum flexibility and reasonableness ought to allow the arbitrators jurisdiction. On the other hand, as a practical matter most arbitrators are now senior counsel, the awards are of significance, and in order to ensure the economy of time and responsibility, the writer is of the view that the arbitrators should be allowed to re-open only if:

it is apparent that there has been a fraud upon the Tribunal; or

there has been a mistake in the issuance of the award that the arbitrators wish, on their own motion, to correct.

Otherwise, the grounds extending the arbitral functions should be limited to the same rights that a Supreme Court judge has to amend his or her own judgment after it has been given.

The writer is of the view that the appeal or judicial review process, per se, has become so encrusted with technical objections that it is now no longer just or convenient. The unfortunate decision to analog arbitral review with administrative law review has further compounded the problem.

The provision in the Labour Code that allows appeals directly to the Court of Appeal from an arbitral award on either an error of law or request for rehearing on unsustainable finding of fact ought to be followed in other arbitrations.

As most arbitrations involving private citizens are collisions with a governmental authority, the writer would respectfully submit that judicial supervision of arbitral tribunals ought to be increased, not decreased as was laid forth as an alternative by the Commission in its working paper.

It would be possible however, for business arbitrations to contract out of an extended scheme of judicial review as, in many commercial matters, speed and finality are, perhaps as a rule, more important than complete justice.

For a private citizen, who has only one house to be expropriated or one job to lose, rough justice is inadequate.

The writer trusts the foregoing comments may be of some assistance to you. If there is anything further that the writer may do to be of assistance, he would be pleased to hear from you at your convenience.