Breaking Log Jams in Commercial Litigation
Breaking Log Jams in Commercial Litigation
There are significant – arguably unacceptable – backlogs in processing and determining commercial disputes in Canadian courts. Businesses should not have to wait the lengths of time for which currently they must wait, to have their disputes adjudicated. They do not have to do so. Well-qualified and available arbitral tribunals, chosen by the parties, are readily available. Courts should provide an effective and efficient mechanism to encourage and assist parties to consider seriously moving to arbitration. Without proactive and thoughtful encouragement by judges, disputes will languish. Through court-facilitated arbitration, courts can get parties to consider arbitration, and if they agree, to assist them to implement the move.
Toronto’s Commercial List, which has less delay in dealing with commercial cases than do many courts in Canada, reports (in A Year in Review, July 2022) a one year wait for a trial date from when an application for one is granted (importantly, not from commencement of the case). Unlike arbitration, it is not the norm to set a merits hearing date at the beginning of a case on the Commercial List.
Further it reports that while emergencies are handled on a timely basis, the wait for a long motion or application is 16-20 weeks and 8-12 weeks for regular motions and short applications.
Does that coincide with the dispute resolution needs of Canadian businesses in 2022?
If arbitration can deliver dispute determination in less time, both for an entire dispute, or for parts of a dispute (motions) – and it can – then why are businesses with disputes stalled in courts not turning to arbitral tribunals with a greater frequency?
Now more than ever, Canadian courts should encourage and assist disputing commercial parties to move appropriate cases, or parts of them, to arbitration.
Even before the pandemic, there were significant – arguably unacceptable – backlogs in processing and determining commercial disputes in courts.
Businesses should not have to wait the lengths of time for which currently they must wait, to have their disputes adjudicated.
They do not have to do so. Well-qualified and available arbitral tribunals, chosen by the parties, are readily available.
Commercial arbitration has been growing across Canada. Litigators are increasingly familiar and comfortable with it.
Yet, even when parties in court litigation see lengthy delays ahead, not just in getting to trial but even in having procedural motions determined – and even when they should appreciate that those delays have significant monetary and other costs – they and their counsel appear to consider appointing an arbitral tribunal only rarely.
Is the Problem Defendants?
Are defendants the reason disputes are not being moved to arbitral tribunals?
Overall, I do not believe that is the case.
Of course, there are those disputes in which a defendant is working under a belief that “justice delayed is justice”. Delaying the process of getting to trial is perceived to have some advantage, usually simply by putting off the day of reckoning (whether by judgment or a settlement on the courthouse steps).
But not all defendants have that mindset.
Some defendants – and plaintiffs – realize that each time their lawyer must pick up the file again and ‘get back into it’, legal expenses increase.
Other defendants – and most plaintiffs – would prefer not to have their dispute hanging over their heads, distracting them from their businesses and even their lives, and being a constant nagging worry in the back of their minds.
Importantly, many defendants believe that they have a good defence.
So why not get the dispute tried and obtain a favourable result, and likely obtain at least a partial recovery of legal expenses from the other side?
It is common during any dispute that if one side suggests something – for example, discussing settlement, mediation, a procedural agreement, or moving all or part of the dispute to an arbitral tribunal – the other side immediately thinks that the suggesting party must have something “up its sleeve” to secure some advantage.
Hence, Court-Facilitated Arbitration
The critical challenge is to get parties to consider moving their dispute, or part of it, to an arbitral tribunal.
Courts should provide an effective and efficient mechanism to encourage and assist parties to consider seriously moving to arbitration.
Without proactive and thoughtful encouragement by judges, disputes will languish because one party worries a suggested move to arbitration is to secure a tactical or other advantage.
Often parties embroiled in litigation would benefit from independent encouragement and assistance to consider moving their dispute to arbitration. Through court-facilitated arbitration, courts can get parties to consider arbitration, and if they agree to move to arbitration, to assist them to implement the move.
How Court-Facilitated Arbitration Works
While the decision to arbitrate must be voluntary, the process to get parties to consider arbitration need not be entirely voluntary.
Court-facilitated arbitration does not offend party autonomy, one of the hallmarks of arbitration, nor any fundamental aspects of arbitration. Arbitration occurs only if parties agree.
Courts can identify potentially suitable cases and invite the parties and their counsel to a case conference to consider moving all or part of the dispute to an arbitral tribunal. The case conference would need to be conducted by an experienced judge who understands arbitration, has good facilitation skills, and is committed to make court-facilitated arbitration work.
When parties are receptive after initial discussions, the judge then assists counsel to develop a protocol for the move, the selection of the tribunal, the conduct of the arbitration, and various consequential matters.
If parties want certain – or even all – features of court litigation, those features can be preserved in arbitration.
Canadian courts should begin now to implement court-facilitated arbitration procedures, even if as pilot projects.
The main cost would be some judicial time devoted to cases that otherwise will have lengthy waits for trial and ultimately consume many days, if not weeks, of court time and resources.
To succeed, court-facilitated arbitration will need appropriate judicial awareness and commitment. The key will be proactive judicial involvement to encourage litigating parties to move their dispute to an arbitral tribunal.
Also, court-facilitated arbitration will need litigators to seriously consider the advantages that can accrue to their clients, and to explain those advantages to their clients.
The Honourable Barry Leon FCIArb is an independent arbitrator and mediator with Arbitration Place, 33 Bedford Row Chambers (London), and Caribbean Arbitrators. He was Presiding Judge of BVI’s Commercial Court (2015-2018) and is a former chair of ICC Canada’s Arbitration Committee, an International Mediation Institute (IMI) Certified Mediator, and a Fellow of the International Academy of Trial Lawyers.