17 Dec

 

Transitioning from Civil Litigation to Arbitration

By Hon. Clifton D. O’Brien, Q.C.

 

When civil litigation is agreed by the parties to be transitioned to arbitration, counsel have both an opportunity and an obligation to carefully canvass the procedural rules to be selected to govern the arbitral proceedings. Working together with the tribunal, the parties and their counsel are in a position to tailor the procedural rules to best achieve a fair and efficient determination of the issues.

In Alberta, there is an increasing trend to transition proceedings that have been commenced as civil litigation into arbitral proceedings. This is especially true of cases with the prospect of long trials, as the wait-time for a trial may be a number of years. Likewise, the length of time it often takes to deal with interlocutory applications adds to the time it takes to reach trial, and serves as a further inducement to transition to arbitration.

While delay often suits the purposes of one of the parties, in situations where all parties desire a much quicker adjudication of their claims before the court, they agree to make arbitration the dispute resolution process. While the pros and cons of such transfer can be debated and involve many considerations, this paper focuses only on the practical issue of what procedural rules should be adopted at the time of the transition to arbitration.

One of the hallmarks of arbitration, and indeed one of its attractions, is the flexibility it provides in the choice of procedural rules and the ability of counsel and the tribunal to tailor rules to the nature and circumstances of the dispute. It is fundamental, of course, that each of the parties must be dealt with fairly and be given an opportunity to present and defend the claims before the tribunal, but the domestic Acts grant wide latitude to fashion procedural rules appropriate to the dispute.

Since we are dealing with situations where an action has already been commenced, it is common simply to adopt the existing pleadings for the purpose of the arbitration. With that said, the parties should be encouraged to consider whether there is benefit in the circumstances of the dispute for the parties to deliver position papers which can be used to more fully set out the issues and the positions of the parties than traditional barebones pleadings. If speed is a predominant consideration, such position papers can be supplemented to include witness statements, expert reports and pre-hearing briefs.

The important point that I wish to make is that the move to arbitration brings with it both an opportunity and an obligation to consider adopting procedural rules relating to production of documents, oral discovery, expert evidence, and other procedural aspects which best achieve a quicker and fair resolution of the subject dispute.

There is a temptation on the part of counsel in such situations simply to adopt the civil litigation Rules of Court and to proceed essentially using the arbitrator as the trial judge. It is understandable why this is so as the counsel conducting the case are familiar with the civil litigation rules and are wary of employing procedures with which they may not be familiar. While understandable, it deprives their clients of arbitral advantages that are available and which reduce the time and expense of the process.

As the person appointed arbitrator in such situations, I arrange for an early preliminary meeting with counsel, and their representatives if available, to canvass the procedural rules best suited to achieve a fair and efficient disposition of the dispute. Many litigation counsel are not familiar with the institutional rules and I refer them to the ADRIC Arbitration Rules and the ICDR Canada Canadian Arbitration Rules for their review, and to consider rules appropriate to their case. I should add that the presence of client representatives is to be encouraged at the preliminary meeting as they can be expected to be interested in, and to encourage, the adoption of an efficient and less expensive process.

The greater part of the discussion with counsel usually relates to documentary and oral discovery (questioning as it is now often referred to) as well as the means of adducing evidence at the hearings, such as by providing the evidence-in-chief by way of written witness statements. Electronic communications and record keeping often result in massive, unproductive and expensive document production under civil litigation rules. Most experienced litigators acknowledge that in the majority of cases, only a relatively small handful of documents prove to be material to the outcome of a case.

In short, such massive production of documents is disproportionate to their role in determining a fair result in accordance with law. The Reliance and Request Standard typically adopted in arbitral proceedings is usually to be encouraged and results in shorter yet fair proceedings.

Likewise, prehearing oral examinations can often be dispensed with, limited to a single representative, time limited or otherwise narrowed without resulting in any unfairness or otherwise impeding the ability of counsel to make either full and complete claim or defence, as the case may be. It is necessary also to determine what use may be made of the transcripts of the deposed persons, i.e. can the transcripts be read in as evidence at the hearing?

My point is that the rules to govern the ongoing proceedings after their transition to arbitration should be carefully considered by counsel and discussed with their clients in order to achieve not only a speedier proceeding but one that is more efficient and less expensive. In my experience, most arbitral tribunals request that counsel draft the procedural rules intended to govern the arbitral proceedings. The tribunal then reviews the draft and makes suggestions. Generally speaking, a tribunal will approve the rules agreed to by counsel as it is understood that counsel know their cases at that stage far better than the arbitrators. I would encourage counsel in such instances, however, to fully involve the arbitrator in the formation of the rules for the purpose of gaining the benefit of their experience in such matters.


Hon. Clifton D. O’Brien, Q.C. is a commercial arbitrator. He is a member of Calgary Energy and Commercial Arbitrators (CECA), an association of independent arbitrators. He was formerly a judge of the Alberta Court of Appeal and prior thereto conducted civil litigation with extensive experience both as an arbitrator and as a counsel in arbitrations.

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