CAA Conference – October 20, 2014
The 2014 Canadian Arbitration Association’s Annual Conference was held at the CAA Head Office in Toronto on Monday, October 20, 2014. The conference featured a discussion of seven hypothetical situations that raise practical and ethical issues arbitrators may encounter. Attendees were entitled to 1.0 professionalism hour and up to 2.5 substantive hours for Law Society of Upper Canada (“LSUC”) Continuing Professional Development purposes. The situations and discussions are outlined below.
1. You have been appointed as the arbitrator in a proceeding under the CAA Rules involving the plaintiff’s alleged wrongful termination from employment by the defendant. Counsel for both sides are intent to move the matter forward, but they have yet to send you either executed Terms of Appointment or the requested deposit. You have already spent several hours on this file and counsel ask you for an emergency motion to hear and determine a preliminary issue of an urgent nature (on an injunction to prevent disclosure of confidential information).
What do you do?
Suppose counsel have told you that they will submit signed copies of the Terms of Appointment as well as the appropriate deposits in advance of the hearing of the emergency motion, which you have agreed to hear the following day. Counsel fail to deliver.
What do you do?
This type of scenario is not uncommon. One conference participant, having been burned before, said he would not hear the motion without the deposit and the signed Terms of Appointment.
What if the party seeking the injunction has paid and returned signed Terms, and the other party has not? One participant would tell the parties that he would hear the matter and hold back the Award until payment is received. The party requesting the motion would have the option of paying both sides’ fee to have the decision released. One concern is that if the party against whom the injunction is sought does not pay and that prevents the arbitrator from releasing his or her Award, isn’t that a win for that party? Failing to act could then pre-determine the outcome.
Is a lack of signed Terms an issue? Do arbitrators still have jurisdiction? Rule 10.4 of the Canadian Arbitration Association Arbitration Rules provides that, in the event that the CAA does not receive a response from a party within 10 business days of sending the Terms, the CAA may assume that that party has accepted the content of the Terms and the arbitration will proceed.
One participant suggested going ahead with the hearing and dealing with the issue of fees as part of the costs decision. Another attendee would go ahead with the motion if the party seeking the injunction pays the deposit and the other party does not. Arbitrators are providing a service. Another participant agreed that, as a matter of customer relations, he would go ahead and hear the motion.
Another attendee would be concerned about proceeding without signed Terms. The money issue is separate and can be dealt with in the Award. He would be comfortable if both parties had agreed verbally to the Terms but if he were met with silence, that would be a concern. Another participant agreed that he wouldn’t hold the matter up because one side hadn’t signed the Terms, while a different participant indicated that his course of action would depend on whether the motion was dispositive of the arbitration.
What about asking for a lawyer’s undertaking to pay the fee (and/or return the Terms)? It’s an issue for arbitrators to balance making sure they get paid vs. acting as a judge.
The good news is that not getting paid is the exception and not the rule. To what extent should the arbitrator’s position differ if the person not paying is self-represented? When dealing with an unrepresented party, it’s taking a bigger risk. An arbitrator wouldn’t want it to look like money is a bigger issue for him or her than the decision. Does the arbitrator make the decision that is wrong in law because he or she doesn’t have the deposits?
2. You are the arbitrator in a dispute over unpaid invoices. A hearing date was set early in the process. It is scheduled for one day. One month from the date when the hearing is supposed to begin, the lawyers advise you that they are in settlement discussions. Shortly thereafter, you receive a request to arbitrate a two-week arbitration, but you must be available for the entire two weeks and one of the days is the day scheduled for this arbitration. The lawyers say that you must be available for the entire two weeks and that day is your only conflict.
You ask the lawyers in the first dispute if they anticipate proceeding as scheduled or if you may book another matter during the time initially reserved for their arbitration to help them avoid potential cancellation or adjournment fees. They ask you to keep the original date free in case they need you for the hearing. They are 99% certain that this dispute will settle but they need to keep the day booked to keep the pressure on. In the event that the case does not settle, you suspect that counsel will not be ready to proceed with the arbitration on the originally scheduled date because they have been spending their time in settlement discussions and not preparing for the arbitration, but, of course, you can never be 100% certain.
What do you do?
One participant suggested referring the one-day hearing to a colleague. Another participant suggested that this is akin to confirming your attendance at a party and then receiving an invitation to a better party – you’ve already committed. One attendee suggested offering counsel for the one-day hearing their choice of another date, perhaps one or two weeks later, while another attendee suggested playing around with hours to see if you might accommodate both matters by doing a half-day hearing on the date in question and/or starting one proceeding early that day and finishing the other proceeding late. If the two-week hearing must be completed within the given two-week period, you can suggest to counsel on that matter to perhaps hold one hearing day on a Saturday or Sunday.
3. You are the arbitrator in a contractual dispute between two companies, appointed through the CAA Rules (not chosen by the parties). The lawyers for each company are partners at large firms. You arrange a preliminary hearing with counsel to take place via conference call. On the call, the lawyer for the defendant advises that she is an associate filling in for the partner, who is away on vacation. The plaintiff lawyer is a junior partner. You start talking about scheduling and the plaintiff lawyer asks for a very short timeframe, saying his client needs the matter dealt with urgently. He suggests a process where the hearing is in two months. The associate lawyer for the defendant says that her instructions are that the partner isn’t available on the days suggested and that she thinks the schedule is too ambitious. The lawyer for the plaintiff says, “Listen sweetie, I can’t do your work for you and organize your calendar. Find someone else if the partner can’t do it. Don’t play games with me.” The defendant lawyer says, “I’m sorry sir. I didn’t mean to play games. Can we adjourn this motion and reconvene in a week?” The plaintiff lawyer says, “Adjourn this ‘motion’? Were you born yesterday? Did you learn how to be a lawyer from TV? There is no motion. And no, I can’t wait a week for you to figure out your life.”
How should you handle this? Does it matter whether you think the issue is urgent? Should you ask why the plaintiff lawyer thinks it is urgent?
To what extent do we as arbitrators get involved? One participant would say early on, as soon as the “Listen sweetie” comment is made, that this is not appropriate language.
As for the scheduling difficulties, one participant suggested adjourning the call until the next day in order to have the partner for the defendant on the call. Another participant suggested asking counsel for the plaintiff what prejudice his client will suffer if the call is adjourned until the partner for the defendant is on the call. If scheduling is the only issue, is it possible to work around it? Perhaps proceed with the two-month timetable tentatively and still postpone the call by a week?
As far as scheduling difficulties are concerned, should we be treating sole practitioners and big firms differently? One attendee suggested that there can be a difference. In a large firm, it may be possible to have another lawyer as a stand-in, whereas sole practitioners, or even small firms, don’t have the same resources available to them.
4. You are the arbitrator in a construction dispute between a plaintiff construction worker and the general contractor for whom he worked. The plaintiff is self-represented and the defendant is represented by counsel. Two weeks before the hearing, you receive a voice message from the plaintiff. His message indicates that he is concerned about how to conduct the hearing (since he is not a lawyer) and asks you to get back to him with any tips or suggestions.
What should you do?
The matter continues and, during the hearing, the plaintiff becomes visibly upset. You ask if he needs a moment, and he tells you that his ability to carry on his work and to keep his house depends on the outcome of this arbitration.
What should you do?
What if the plaintiff returns and asks you for help in conducting his cross-examinations?
One attendee suggested writing a letter to the self-represented party advising that he cannot have unilateral communication with the arbitrator. Assuming a call is set up with this party and the lawyer, that attendee was of the view that he is the referee and not the coach. He can tell the party the rules but that’s it. One participant suggested giving the self-represented party a few tips but no specifics; another participant suggested referring the party to a book.
Several participants would recommend to the self-represented party that he retain counsel. You might refer self-represented parties with questions to the tips for self-represented claimants available in the Ontario Small Claims Court. Another attendee suggested referring the party to the Law Society’s Lawyer Referral Service.
How does an arbitrator deal with the situation if the self-represented party is getting lost in direct examination or cross-examination? One participant was concerned that the other side might say the arbitrator is helping the self-represented party too much. The arbitrator has an obligation to help the self-represented party through the process but the arbitrator doesn’t want to go too far. One participant suggested that the process doesn’t have to be a court process, and that there can be a modified process, perhaps of a more inquisitorial nature, as in civil law. One attendee suggested that there is nothing wrong with the arbitrator asking questions to clarify. With consent from the other party, if the self-represented party seems really intent on getting his story out, perhaps you can give him 30 minutes to do that and then move on with the hearing.
To what extent do we offer help? One participant pointed out that this is sometimes a problem for the represented side as well. It may unnecessarily extend hearings.
One participant stated that if the arbitrator’s role is to bring out the facts, an unrepresented party is not dissimilar to incompetent counsel. The other side might be unhappy with the arbitrator if he or she is helping the self-represented party ask the right questions. Another participant pointed out that there is a difference between asking questions to get at the facts so the arbitrators understands them vs. winning the case for the self-represented party.
It’s a tough balance. Many arbitrators will require a court reporter when an unrepresented party is involved, as unrepresented parties are more likely to sue the arbitrator. As a matter of policy, some arbitrators refuse to take on any matters with a self-represented party.
5. You are appointed as a member of a three-member Arbitral Tribunal in a CAA matter. The Chair is a member of the CAA but the other arbitrator is not, and you have never heard of the other arbitrator before. He is an older gentlemen and he seems agreeable to the views put forward by you and by the Chair.
The Tribunal hears a motion on an emergency basis and, after an extensive discussion, the Chair asks the other arbitrator to draft the decision. A few days later, you receive the draft decision, and it is completely incomprehensible. It contains incorrect facts, incorrect statements of the law, and a plethora of spelling and grammatical errors.
What should you do?
This is a political issue, but it does happen. One attendee suggested writing another set of reasons and hoping the Chair prefers your reasons. Another attendee suggested re-writing and telling the non-CAA arbitrator that the new set of reasons is just more in-depth. Another participant suggested that, if you agree with the result but not with the approach, you write your own reasons. An issue with this approach becomes fees – are the clients responsible for paying for both sets of reasons?
Another attendee suggested negotiating through the matter. Perhaps have a conversation about this with the Chair and then go talk to the third arbitrator together. If you re-draft the reasons, it’s possible that the third arbitrator will agree to your changes and appreciate your help.
6. You are appointed as sole arbitrator under the CAA Rules pursuant to the parties’ agreement. The parties sign a Terms of Appointment. In a letter to you and the other party, counsel for the defendant says you have insufficient experience and may be biased, but she does not formally challenge your jurisdiction. You invite submissions from the parties on this issue, and find that the allegations of the defendant’s counsel are without merit. After you issue your decision, counsel for the defendant advises that her client is not prepared to participate in the proceedings with you as arbitrator due to your inexperience and bias. Plaintiff counsel says she is fine for you to continue or resign, whatever you prefer.
What should you do?
What if counsel for the plaintiff objects and advises you that the defendant had already used this tactic on the previous arbitrator for this dispute, whose resignation led to your appointment?
Arbitrators do have jurisdiction to determine their own jurisdiction. One participant said he would stay on and let the defendant appeal if that’s what he wants to do. Another participant suggested that if the defendant wants the arbitrator off the case, it may be more trouble than it’s worth. This is only the first sign of trouble, and it may be best to have someone else do it. Another participant suggested giving counsel the opportunity to discuss the matter privately and come to an agreement – this would allow counsel for the defendant an opportunity to rescind the allegations of bias and to save face.
One attendee pointed out that once an arbitrator is appointed, he or she has an obligation to see this through. The objecting party is free to go to court if, objectively, there is nothing to the bias allegations. That said, several participants agreed that the safe thing to do is to get out.
7. You are the arbitrator in a dispute over the termination of a lawyer’s employment with her previous firm. From the beginning, counsel have been uncooperative. It took several months to arrange a preliminary conference call following your appointment because of the unusually limited availability of counsel for the defendant, and there have been several delays relating to disclosure and submission of materials throughout the process on the part of both parties. After two years, you are finally at the hearing. During a break, you overhear counsel for the defendant say to his client, “Arbitration doesn’t normally take this long. This process is taking so long because of the arbitrator.”
What should you do?
What if, instead, you overhear counsel for the defendant make this comment to counsel for the plaintiff?
Assuming that both counsel are uncooperative, one participant stated that he would ignore the comment by the lawyer to his client. It wasn’t meant for him to hear and it is subject to solicitor-client privilege. Another participant said he would comment on the length of the delay and the lawyers’ part in the delay in his reasons, though the lawyers may not want the arbitrator to highlight the delay in the Award.
In the scenario where both lawyers are complaining, most participants agreed that they would not engage counsel.
These comments are being made all the time except they’re usually made in the background and arbitrators usually don’t hear them. In fact, arbitrators should assume that parties are always blaming arbitrators for delays.
One participant suggested doing his best to move the proceeding along. Another suggested having the clients on the preliminary call with their lawyers. Do we want to make it mandatory for parties to attend the call, with the option to opt out if both sides agree? An arbitrator has to balance his concerns with keeping the lawyers happy with him.