The COVID-19 backlog has wrought havoc on our litigation timetables. Procedural civil motions are often booking several months out. Litigators are stymied in their efforts to move cases forward. Parties are frustrated with the inertia. In the absence of a credible and immediate threat to convene a case conference or bring a motion, litigators find themselves without the resources they need to force an uncooperative opposing party to comply with an agreed-to schedule or provide agreed-to productions. By the time a procedural motion can be heard, there has been a lengthy interlude of downtime that results in lawyers needing to re-ramp on the facts and review case law for new decisions that may have been released in the meantime. Worse, business events may have arisen in the intervening time that affect a litigant’s resources or motivation to bring the motion, leading to withdrawals based on resources rather than merits, or to moot or needless proceedings. The problem is compounded by litigants and counsel who use delay as a tactic to wear down an opponent to avoid or defer payment.
Litigants have increasingly adopted a novel solution to move their cases forward efficiently: case management arbitration. Case management arbitration is not a full referral to arbitration. The courts maintain ultimate jurisdiction over the determination of the parties’ substantive rights on the merits, while interim procedural matters are referred to a mutually agreed-on arbitrator for speedy and effective resolution. The purpose of case management arbitration is to permit the parties to move forward expeditiously without having to wait for interim motion dates or case conference dates from overwhelmed courts.
In its broadest iteration, case management arbitration is similar to civil case management available under Rule 77 of the Rules of Civil Procedure (Ontario) or pursuant to Part XIII of the Consolidated Practice Direction Concerning the Commercial List, where the parties agree or are directed to refer all procedural matters to a single case management judge or master. Civil case management was introduced in Ontario as a system designed to reduce unnecessary delay and cost, facilitate early and fair settlements, and bring cases promptly to a just conclusion. In Quebec, this would be akin to special case management. Ironically, in the context of a significant backlog, civil (or special) case management in the court system can actually contribute to further delays. If all motions must be directed to a single adjudicator, that person’s lack of availability will become a bottleneck to the progression of other cases.
This is the problem the judicial system is currently facing. As noted by Regional Senior Justice Mark L. Edwards (Newmarket):
As the regional senior justice of the Superior Court of Justice for the Central East region, I can speak to the current backlog of cases here. Motions in Newmarket are currently booking at least 20 weeks out. The backlog will only worsen as we resume empanelling juries for criminal matters. Those matters will take priority over civil cases, using up finite court and judicial
resources and leading to further delays in setting civil motions dates. If we can move interim procedural matters off the court’s docket and have them dealt with by an arbitrator, it will speed up resolution for civil matters, and, speaking for myself and not as a matter of court policy, I think that’s a great idea, so long as the parties agree.
The problem of finite judicial and courtroom availability for interim matters is significantly mitigated under case management arbitration where the parties refer their procedural disputes to an arbitrator instead of a judge or master. Arbitrators typically have much greater autonomy over their schedules than judges do and are available outside of conventional court hours, if need be. Case conferences or motions can be convened on relatively short notice at any reasonable hour: early in the morning, over lunch, or after the end of an ordinary business day – whenever counsel and the arbitrator are available. Moving to timeframes outside of standard court hours also frees up a lot of counsel time that would otherwise be subject to scheduling conflicts with other court matters. Further, the case management arbitrator’s availability will be a factor in selection and be canvassed upfront, thereby avoiding surprises over scheduling conflicts.
In Quebec, which is faced with similar backlogs before the civil courts, the possibility of case management arbitration has become an increasingly attractive option for litigants and counsel. While the concept remains novel in that province, the Code of Civil Procedure places a central emphasis on alternative dispute resolution (ADR) processes and expressly requires litigants to consider resolving their disputes privately. Properly implemented, case management arbitration could significantly assist parties in resolving their disputes quickly and efficiently.
As noted by François Rolland, former chief justice of the Superior Court of Quebec and current arbitrator:
In Quebec, it is not yet an established practice to have an arbitrator entertain procedural motions and case management conferences in order to help courts manage their delays. However, I believe this to be an excellent initiative. Not only would it help reduce the delays (hence, the backlog), but it would also allow parties to explore possibilities of settling their dispute, in whole or in part. Courts and arbitrators’ associations could also consider adopting protocols to facilitate case management arbitration. Moreover, such a practice would also allow new arbitrators to gain valuable experience.
What follows is a description of how case management arbitration works in practice in Ontario, and how this process may be adopted, with necessary modifications, in Quebec.
The scope of a case management arbitrator’s jurisdiction will be set by the parties’ agreement and may include all interlocutory matters or focus more narrowly on production and discovery issues. There may be a carve-out for interlocutory matters that engage the merits of a dispute, such as a substantive summary judgment motion, or motions to dismiss on preliminary grounds, while leaving room for the case management arbitrator to decide adjacent matters. To best suit the needs of a given case and to best ensure that the process operates efficiently, parties should carefully tailor the scope of any agreement to refer a matter to case management arbitration.
Advance consideration should be given to whether court approval of a case management arbitration agreement is necessary or advisable. In Ontario, court approval is generally not required or sought for ordinary civil and commercial matters but may be advisable for any proceeding to which any party is operating under a disability (e.g., a minor) or where a group of litigants is bound by a representative litigant or committee (e.g., in class proceedings or mass torts). Indeed, for proceedings over which the court must maintain regular oversight with statutorily mandated reporting at regular intervals (e.g., proceedings under the Companies’ Creditors Arrangement Act), case management arbitration may not be appropriate. That said, the categories of cases listed above are typically subject to particularized court procedures and heard at specialized courts.
In Quebec, courts maintain oversight over pre-trial civil case management, notably through the requirement of court approval of a case protocol at the early stages of a proceeding. Thus, parties will be prompted to inform the court of the existence of a case management arbitration agreement at the early stages of the litigation process. By carefully tailoring the scope of their case management arbitration agreement (for instance, by limiting it to cover discovery and procedural issues that do not directly impact the merits of a claim), parties can best ensure that it will meet the court’s approval, such that it does not engender unintended issues at trial.
Parties should consider whether to (1) specify particular rules of arbitration to govern the process of their procedural disputes; (2) rely on the applicable rules of civil procedure in the jurisdiction, with or without modifications; or (3) craft their own procedure by agreement with each other and the case management arbitrator.
Although fixed rules provide certainty and may avoid disputes on procedure, they can often be cumbersome or inadequately tailored to the dispute in question. In particular, the wholesale importation of the applicable rules of civil procedure could result in an unduly time-consuming process that may not be necessary to safeguard the parties’ entitlements to fairness and proportionality. Wherever possible, counsel should work together co-operatively and with the guidance of the case management arbitrator to craft an agreed-on process that best suits their dispute. However the parties choose to govern their arbitration of procedural matters, certain process rules will require particular attention in case management arbitration – specifically, appeal rights and costs.
To fully embrace the time-saving benefit of case management arbitration, it is preferable to agree at the outset that the case management arbitrator’s decisions will be final and binding. Consideration should be given to the court’s capacity to intervene, overturn, or annul a decision by the case management arbitrator. Where possible in the relevant jurisdiction, parties may want to consider limiting appeal or annulment rights to instances where the arbitrator renders a decision exceeding the scope of the case management arbitration agreement itself, or one that irremediably affects the outcome of the dispute on its merits. In Ontario, a common practical solution is simply to refer any appeal of a procedural decision made by the case management arbitrator to the trial judge, to be addressed as a threshold matter prior to the commencement of trial.
The parties will also need to agree on the treatment of costs for the interim matters decided by the case management arbitrator. In Ontario, arbitrators have a wide discretion on the costs of arbitration: they can order full indemnity costs, no costs, or any reasonable scale of costs in the circumstances. The possibility of full indemnity costs can be both a carrot and a stick, incentivizing parties to take reasonable positions on each interim step, agreeing where possible, and avoiding all but the most important contested procedural wars. Where costs are ordered on interim steps, care should be taken to avoid double recovery in the cause. Specifically, the parties will need to agree on what remaining costs constitute costs in the cause following trial. One way to avoid double recovery issues is to order all interim costs to be paid in the cause. If the parties opt for this costs treatment, the case management arbitrator may elect to assist the trial judge by fixing the costs of the interim steps to be paid in the cause. In Quebec, where extrajudicial costs (i.e., legal fees) may be less frequently awarded, parties should nevertheless address the issue of costs in their case management arbitration agreement. For instance, parties can agree to defer the issue of costs to the trial judge.
Benefits of case management arbitration
Clearly a major benefit to case management arbitration, particularly in view of the current backlog, is more timely resolution of interim matters resulting in faster routes to a trial on the merits. For any case involving time sensitivity, case management arbitration is particularly useful. After pleadings close, parties who opt for case management arbitration may immediately set down for trial with a view to obtaining the earliest possible trial dates from the court and then work backward from the set court dates to perform the remaining steps of the litigation under the management of the agreed-to arbitrator. For practical purposes, it is advisable to have selected and appointed a case management arbitrator and to have canvassed that arbitrator’s general availability for interim motions before setting down and committing to trial dates.
Case management arbitration is also a smart choice where parties need to move the action along to productions and discoveries in order to optimize settlement opportunities. Having faster access to a decision-maker on interim disputes relating to the exchange of information and documents will position parties to engage in meaningful settlement discussions at an earlier point. As noted by the Honourable Colin Campbell (retired justice):
As a former judge of the Commercial List, I am very familiar with case management in the courts. Since my retirement from the bench, I have been practising as a mediator and an arbitrator, and I offer case management arbitration. The need for case management arbitration often arises after an early mediation attempt reveals that settlement cannot be achieved without certain productions or threshold matters resolved. In those cases, I have offered to assist the parties in getting through the interim procedural steps required to get into a settlement position, with the idea that mediation would resume thereafter.
The myriad disputes that can arise around productions, discoveries, and examinations are particularly suitable for case management arbitration, especially those arising from complex claims involving a high volume of electronic documents. A case management arbitrator can assist the parties in coming to an agreed-to discovery plan and determine disputes involving the scope of the discovery plan, the timing of delivery of productions, the appropriate representatives for examinations for discovery, the appropriate duration of discovery examinations, the order of party examinations and third-party examinations, the appropriate format for electronic productions, the sufficiency of answers to undertakings, and the propriety of refusals or objections.
Where the parties agree, common arbitration procedures may be employed to deal with discovery disputes. Many such disputes can be dealt with by exchanging a few emails, bypassing the formality of interim motions required by the courts and saving time and money. Documents and information can be addressed together through the use of Redfern schedules.
A Redfern schedule, which is similar to an undertakings and refusals chart, is an efficient method of organizing and characterizing requests for documents and information. It is most often organized with columns, as set out in the chart below, allowing the parties to present their requests for documents and information, or categories thereof, and to spell out the reasons for their requests – cross-referencing each request to the record and then permitting the counterparty to lay out its objections to the requests with a reply option. The final column is for the arbitrator’s decision.
This method of organization streamlines the arguments in a cogent manner, allowing the parties and the arbitrator to cut to the chase for efficient decision-making. It essentially combines production and discovery with a refusals motion, making a single step out of four litigation phases (productions, examinations, answering undertakings, advancing or responding to a refusals motion). A Redfern can be used as a stand-alone process or as a supplement to distinct litigation phases. For example, parties may agree to produce to one another the documents on which they intend to rely and/or to submit to time-limited examinations; and then supplement those productions and the information relayed in brief examinations with further requests organized in a Redfern.
Discouraging strategic delays
There will always be litigants who benefit from delay as well as counsel who encourage delay as a strategy. These parties will be difficult to convince to enter into a case management arbitration agreement. There are a few strategies we suggest when proposing case management arbitration to a reluctant opponent.
First, where feasible, parties may agree to case management arbitration before a dispute arises and before any motivation to delay the resolution of such disputes becomes entrenched. Parties might consider including in their governing contracts a referral to case management arbitration for procedural and interim matters arising from any disputes that need to be litigated in court. This referral would be related to but independent of a substantive ADR clause, essentially relating to any matter outside the scope of that clause.
Second, arbitrators and the courts should consider whether costs consequences are appropriate for a party’s refusal to engage in proposed case management arbitration as a means of promoting or benefiting from delay. Stalwart refusal to engage in a process for the fair determination of interim and procedural disputes – a process that would ease the burden on the overwhelmed courts in the context of an unprecedented court backlog – for no other reason than to benefit from the avoidance or deferral of final judgment, is not a tactic that courts should accept or endorse. As such, good faith proposals for case management arbitration, and any refusals to engage in them, could be taken into account in the award of
No. Request for Documents or Information – References – Reasons for Request – Relevance and Materiality – Reasoned Objections to Request – Response to Objections – Decision costs – not only for interim steps in the court, but also for costs in the cause. As Regional Senior Justice Edwards stated:
In cases where one party wants to refer to arbitration, but another party opposes it, I wouldn’t order them to go to arbitration, but I would encourage the refusing party to reconsider by appealing to their common sense. When properly assessed, the time savings and costs savings and the shortening of the duration of cases to full resolution (by settlement, usually) are strong common-sense incentives to engage in case management arbitration. If a party maintains its objection, any additional costs incurred as a result of this refusal would be appropriately taken into consideration in awarding costs under Rule 57.
Third, picking up on Justice Edwards’s comments, where there is a dispute between the parties as to whether or not to engage in case management arbitration, it may be worthwhile to bring that dispute to the attention of the court in a case conference. Although, at the present time, it may take a while to get a date for a case conference, it may be worth the effort if the proposing party can get the judge on side. If the proposing party’s arguments about the time and costs savings are persuasive, the judge presiding over the case conference may strongly encourage the parties to refer their procedural disputes to a case management arbitrator while remaining seized of the substantive dispute. As the Honourable Colin Campbell noted:
In certain cases, when the case management judge sees a long list of interim matters to be determined and knows that the next available court dates are quite far off, he or she may encourage the parties to refer these interim steps to an arbitrator. With the current backlog being what it is, I don’t see the trial list or long motions lists being normalized in the near future. Counsel and judges should be encouraged to see case management arbitrators as a helpful resource for alleviating the backlog and moving cases along.
To sum up the above points, justice delayed is, in some cases, justice denied. Case management arbitration is an essential resource for the courts, parties, and litigators to combat such delay and to enhance access to justice for more litigants across Canada.