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News and Views Issue 2: Fall 1999

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In the Shadow of the Rule of Law: Alternative Dispute Resolution and Provincial Superior Courts

By Dr. Graeme A. Barry, Assistant Professor, Faculty of Law, University of Alberta, whose doctoral dissertation is entitled Provincial Superior Courts and the Canadian Constitution: Changing Times and Unchanging Principles. Professor Barry thanks Chief Justice W. K. Moore for information regarding the Alberta Court of Queen's Bench practice relating to mediation. The ideas expressed are those of the author. No part of this article may be reproduced without the written permission of the author. ©


I. Introduction

In 1994, the Right Honourable Brian Dickson delivered an address in which he praised the wide variety of methods by which disputes are resolved in Alternative Dispute Resolution (ADR) without resorting to courtroom litigation [ 1 ]. During the course of his address, however, the former Chief Justice also expressed two concerns with ADR. First, some cases may be pushed out of the courts and the parties forced to settle because of an over-burdened system [ 2 ]. Secondly, ADR must be developed in a manner consistent with "the principles of fundamental justice that underlie our judicial system" [ 3 ]. Some of these principles include equal access, established procedures, reasoned decisions, public scrutiny, and qualified neutrals [ 4 ]. Former Chief Justice Dickson was especially concerned with the impact that judicial involvement in ADR may have upon the public's perception of judicial impartiality [ 5 ].

Some of these principles are not merely institutional practices, but constitutional values which emanate from the rule of law. The impartiality, independence, separation of powers, and core jurisdiction of the provincial superior courts must be considered in relation to the interaction of ADR methods with the judicial system. In this article, I shall examine the constitutional principles associated with the provincial superior courts, and the effect which these principles will have upon various ADR methods of mediation and arbitration. If designed carefully, the improvements to the civil justice system which ADR promises may be secured without diminishing judicial constitutional values.


II. Provincial Superior Courts: Constitutional Principles and Core Jurisdiction

The rule of law is a fundamental postulate of the Canadian Constitution [ 6 ]. The meaning to be accorded to the rule of law is inexact, since the concept is both an ideal and an ideology. The Supreme Court of Canada has declared that the law is supreme over the acts of both government and private persons. Secondly, "the rule of law requires the creation and maintenance of an actual order of positive laws which preserves and embodies the more general principle of normative order". Finally, the relationship between the state and the individual must be regulated by law [ 7 ].

As the "defender of the Constitution" [ 8 ] in which the rule of law is a basic principle, the provincial superior courts are separate from the executive and legislative branches of government when performing the adjudicative function in matters within their jurisdiction. However, the Constitution does not contain a strict separation of powers. Parliament and the provincial legislatures may confer on the courts other legal functions which are performed outside the framework of adversarial litigation [ 9 ].

Independence and impartiality are normative requirements of judicial adjudication. Independence and its corollary, the separation of powers, deal with the relationship of the judiciary both individually and institutionally with others, whereas impartiality refers to an unbiased state of mind. Although judicial independence is a distinct value from judicial impartiality, it is intended to be a cornerstone in promoting a reasonable public perception of impartiality [ 10 ]. Judicial independence and impartiality are not absolute concepts, but principles that can be measured by degrees along a spectrum of possibilities [ 11 ]. The question is whether an informed and reasonable person would perceive a tribunal as independent or impartial [ 12 ]. The perfect ideal of judicial impartiality is unlikely to be attained in the human condition. Despite the difficulties inherent in striving for unattainable ideals, it is imperative that the judiciary possess a high level of independence and impartiality because adjudication is a form of third party conflict resolution, and a judge must be a genuine third party. Justice could not be done and public confidence in the process could not survive if the judges were allied with certain parties involved in disputes. Ultimately, the dominant purpose of judicial impartiality, independence, and separation of powers is to enhance the citizen's confidence that a judge will hear and decide a case free of governmental or private pressures in accordance with the law [ 13 ].

Judicial independence of the provincial superior courts is an unwritten constitutional principle which is elaborated upon in the written text by section 11(d) of the Canadian Charter of Rights and Freedoms, and sections 96 to 100 of the Constitution Act, 1867 (judicature provisions) [ 14 ]. Section 99 guarantees the security of tenure, section 100 ensures financial security, and the judicial interpretation of section 96 prevents legislative encroachment upon the court's core jurisdiction. The powerfully persuasive logic underlying the core jurisdiction theory is that the interrelated constitutional guarantees of judicial independence "are only meaningful so long as judges carry out meaningful tasks" [ 15 ]. Crucial elements of the core jurisdiction cannot be taken away so that the provincial superior courts would become "empty institutional shells" [ 16 ].

The constitutional validity of jurisdictional grants to both inferior courts and administrative tribunals is now determined by the modified Residential Tenancies tripartite test supplemented by the guarantee of a provincial superior court core jurisdiction [ 17 ]. Even if an exclusive grant of jurisdiction to the inferior court or tribunal satisfies the modified Residential Tenancies test, it is still necessary to determine if the grant derogates from the provincial superior court core jurisdiction.

In MacMillan Bloedel v. Simpson [ 18 ], the slender five-member majority of the Supreme Court of Canada provided an incomplete definition of the core jurisdiction concept. In addition to the provincial superior court power to control its process and enforce its orders, Lamer C.J.C. alluded to the power of judicial review for jurisdictional error over provincial administrative tribunals, and the power of constitutional review of federal statutes. The majority preferred to develop the content of the core on a case-by-case basis. This jurisprudential approach is problematic for inferior courts, administrative tribunals, and alternative dispute resolution processes.

By relying upon case law and legal scholarship [ 19 ], I suggest that the core jurisdiction of a provincial superior court should include the general categories of constitutional judicial review, administrative judicial review for jurisdictional error by provincial administrative tribunals, a core of the administration of criminal law consisting of such serious offences as murder or treason, a core of the administration of civil justice, such as civil lawsuits involving large pecuniary claims and the determination of the title to land, and the inherent power of the provincial superior court to control its process and enforce its orders. The specific elements of each part of the core jurisdiction are open to further elaboration by judicial interpretation, which must always respect the dynamic balance between the special constitutional position of the provincial superior courts and the flexibility required by the other courts, administrative tribunals, and ADR processes in the performance of their functions. Any proposed juridical test will not provide mechanical exactitude because it is a provisional hypothesis "expressing the adjustment which commended itself at the moment between competing possibilities" [ 20 ].

It is essential to understand the constitutional principles of impartiality, independence, separation of powers, and the core jurisdiction associated with the provincial superior courts. By means of this background knowledge, one can discern how these courts may supervise ADR methods under the rule of law, and how court-annexed ADR may infringe upon judicial constitutional values.


III. Alternative Dispute Resolution

Alternative Dispute Resolution refers to three major methods of settling disputes: negotiation, mediation, and adjudication [ 21 ]. There are numerous variations of these methods. ADR can be annexed to a court process, tied loosely to a court process, or completely separate from the judicial process [ 22 ].

The legal philosophy which animates ADR is the settlement of a dispute through informal, inexpensive, and expedited means. Thus ADR possesses the potential to play an important role in improving the effectiveness of the civil justice system. Although ADR offers many advantages to society and to the individual citizen, it is not a panacea for all legal disputes. Some of ADR's possible shortcomings include coerced consent, an improperly authorized agreement, and the difficulty of subsequent judicial participation without a previous trial and judgment. Dockets are reduced, but civil justice may not be done [ 23 ].

Recent developments in both court-annexed mediations and private arbitrations raise questions concerning the role of the provincial superior courts in these processes.

(a) Mediation

Mediation is the facilitation of negotiations among parties by a non-party neutral [ 24 ]. In Ontario, it is a mandatory step for litigants in a case managed action to attempt to mediate the dispute before proceeding to the trial of the action [ 25 ]. Pursuant to section 92(14) of the Constitution Act, 1867, each province possesses power to prescribe the procedure in civil matters in the provincial superior courts. The court in Ontario explicitly retains supervisory power over the process, including the power to exempt the litigants from the rule of mandatory mediation. Although this additional step in the process delays access to the court, it does not prevent it. Therefore, the requirement of mandatory mediation does not appear to infringe the constitutional values associated with the provincial superior courts.

A different situation arises when mediation is not only court-annexed, but the provincial superior court judges are serving as the mediators. In Alberta, the court-annexed mediation process spans a spectrum. In the pre-trial conference the judge urges the parties to consider settlement negotiations or to expedite the litigation [ 26 ]. Judicial Dispute Resolution (JDR), which was introduced in 1994, attempts to build on the pre-trial conference. In JDR, a judge conducts a settlement conference which assists the parties in reaching an agreement. The Alberta Court of Queen's Bench incorporates dispute resolution weeks into its regular sitting schedules [ 27 ].

Finally, another type of mediation is the mini-trial, which was implemented in Alberta in 1991. The mini-trial is a structured proceeding designed to encourage voluntary settlement negotiations. The presentation of evidence and arguments on behalf of the parties before a judge enables the parties to settle the dispute on the basis of a non-binding opinion rendered by the judge at the conclusion of the process [ 28 ]. If there is no settlement, it is an established practice in Alberta that the judge who conducted the mini-trial does not preside at the trial [ 29 ]. There is no specific authority for the mini-trial in the Alberta Rules of Court. There are three possible sources of legal authority. These sources include the broad wording of Rule 219 relating to pre-trial conferences, the inherent statutory jurisdiction of the court under the Judicature Act, and the inherent common law jurisdiction of the court [ 30 ].

In the Secession Reference [ 31 ], the Supreme Court of Canada stated that the Canadian Constitution does not insist on a strict separation of powers. Parliament and the provincial legislatures may confer on the courts legal functions other than strictly judicial functions. Thus provincial superior court judges may act as mediators. A more explicit conferral of authority in relation to court-annexed mediation would be preferable. In a process governed by the rule of law, personal confidence in the abilities of those who presently administer the system is not a sufficient substitute for explicit rules which inform the participants [ 32 ]. It is true that discretion is an integral part of any rule, but if designed carefully based upon past experience, such a rule will better guide and direct "choice within the limits where choice ranges" [ 33 ].

An individual judge may believe that involvement as a mediator in a specific case could infringe upon his or her actual or apprehended impartiality if there is a possibility that the same judge may preside at the trial of the action. This judge would be justified constitutionally to decline to preside at the trial even if assigned by a senior judge with administrative powers [ 34 ]. Moreover, I believe that a judge should not preside over the trial after delivering a non-binding opinion at the conclusion of a mini-trial when settlement does not occur. The judge has already prejudged the case. Because the constitutional value of judicial impartiality is impugned, I do not believe that the consent of the parties cures the defect. The importance of the constitutional principle of judicial impartiality transcends the confines of one case [ 35 ].

(b) Arbitration

Arbitration is the ADR process in which a third party neutral, after hearing the evidence and the arguments from the parties in a relatively informal hearing, renders a binding decision resolving the dispute [ 36 ]. A private, consensual domestic arbitration is similar to litigation because it includes adjudication, but the parties select the arbitrator, and the manner in which the arbitration will proceed is governed by statute as well as by the parties' agreement [ 37 ].

The rule of law mandates that the law is supreme over the acts of government and private persons. Therefore, the provincial superior court's supervisory power over private, consensual domestic arbitrations cannot be ousted completely. Several current Canadian arbitration statutes are based on the Uniform Arbitration Act [ 38 ]. This Act provides that arbitral awards may be set aside for specified procedural or jurisdictional defects. Appeals to the court are heard with the consent of the parties. Where the parties do not consent, appeals on questions of law are permitted with the leave of the court applying specific criteria [ 39 ]. Therefore, the statute includes the provincial superior court's power to intervene in the arbitration process either on an appeal of the award or through review on specified grounds.

Having recognized the provincial superior court's power to intervene, the related issue is the extent to which the court should intervene in reviewing the arbitral award. The parties have voluntarily chosen this ADR method so as to reduce delay, save costs, and preserve privacy. Balanced against these considerations, the court must also enforce adherence to the statute governing the process and the contractual terms to which the parties have agreed. Power that is not the subject of regular review is most often the object of arbitrary abuse.

In cases in which the parties have consented to the availability of an appeal, the courts have tended to discuss the standard of review in the context of the jurisprudence in administrative law [ 40 ]. By employing this method, the courts have blurred the line between an appeal and judicial review, and between legislatively established specialized tribunals and specialized private arbitrators [ 41 ]. According to this administrative law jurisprudence, the three standards of review are correctness, reasonableness simpliciter, and patent unreasonableness. In order to decide upon the level of deference, the court considers the presence and strength of a privative clause, the expertise of the arbitrator, the purpose of the Act as a whole and the provision in particular, and whether the nature of the problem is a question of law or fact [ 42 ].

IV. Conclusion

In the Systems of Civil Justice Task Force Report, the authors state that the multi-option civil justice system of the twenty-first century will require an expanded judicial role in the management and resolution of cases [ 43 ]. Former Chief Justice Dickson has observed that a sophisticated approach will be needed in order to reconcile various ADR methods with present legal principles which include judicial impartiality, independence, separation of powers, and the core jurisdiction.

Recent developments in mediation and arbitration emphasize this challenge. Mandatory mediation conducted by non-judicial personnel does not infringe constitutional principles. Court-annexed mediation conducted by judges, such as pre-trial conferences and JDR, is constitutionally permissible since judges may perform legal functions outside of a strictly adversarial process. It is advisable, however, that judges who conduct these mediations not preside at the trial, and respect rigorously the confidentiality of the process. Moreover, judges who render a non-binding opinion at a mini-trial should never preside at the trial if settlement has not been reached. These safeguards preserve both the appearance and the reality of judicial impartiality.

The provincial superior courts possess supervisory power over private, consensual domestic arbitrations under the rule of law. In exercising this power over ADR, the courts must be careful not to destroy the efficacy of the processes which reduce delay, save costs, and preserve privacy, while also enforcing adherence to legal requirements.

The task of the law has been a deep concern "with balancing the values of continuity against those of improvement, certainty against adaptability, liberty against authority" [ 44 ]. The challenge which ADR poses is to discern how it will affect judicial constitutional values, and how judicial supervision of ADR will influence ADR's processes. If this issue of interaction is carefully considered, ADR can contribute significantly to the effectiveness of the civil justice system as it operates from its position in the shadow of the rule of law.


Endnotes

  1. Right Honourable Brian Dickson, "ADR, The Courts and the Judicial System: The Canadian Context" (1994) 28 Law Society of Upper Canada Gazette 231. Return to Article

  2. Ibid., 235. Return to Article

  3. Ibid., 241-242. Return to Article

  4. Ibid., 235. Return to Article

  5. Ibid., 241. Return to Article

  6. There are three foundations for the rule of law concept in the Canadian Constitution. It is referred to explicitly in the preamble to the Constitution Act, 1982, implicitly included in the preamble to the Constitution Act, 1867, and inherent in the nature of a constitution. See Re Manitoba Language Rights, [1985] 1 S.C.R. 721 at 750-751. Return to Article

  7. Reference re Secession of Quebec, [1998] 2 S.C.R. 217 at 257-258 [hereinafter Secession Reference]. Return to Article

  8. The Queen v. Beauregard, [1986] 2 S.C.R. 56 at 73. See also MacKeigan v. Hickman, [1989] 2 S.C.R. 796 at 827, McLachlin J. Return to Article

  9. Secession Reference, supra note 7 at 233. Return to Article

  10. R. v. Lippé, [1991] 2 S.C.R. 114 at 139 and 140, Lamer C.J.C. [hereinafter Lippé]. Impartiality may have both an individual and an institutional aspect. Return to Article

  11. Peter H. Russell, "Constitutional Reform of the Judicial Branch: Symbolic vs. Operational Considerations" (1984) 17 Canadian Journal of Political Science 227 at 245. Return to Article

  12. R. v. Généreuxx, [1992] 1 S.C.R. 259 at 286-287. Regarding impartiality see also Canadian Judicial Council, Ethical Principles for Judges (Ottawa: Canadian Judicial Council, 1998) paragraphs A.3 and A.4, 31. Return to Article

  13. Garry D. Watson, "The Judge and Court Administration" in Allen Linden, ed., The Canadian Judiciary (Toronto: Osgoode Hall Law School, York University,1976) 163 at 183. Return to Article

  14. Re Provincial Court Judges, [1997] 3 S.C.R. 3 at 63-64, Lamer C.J.C. See also Judge Gerald T. G. Seniuk, "Judicial Independence and the Supreme Court of Canada" (1998) 77 Canadian Bar Review 381at 384. Another rationale of the judicature provisions has been to provide a predominantly unitary court system with integrated federal and provincial participation. See Re Residential Tenancies Act, [1981] 1 S.C.R. 714 at 728, Dickson J. [hereinafter Re Residential Tenancies Act]. Return to Article

  15. Peter H. Russell, "Constitutional Reform of the Canadian Judiciary" (1967) 7 Alberta Law Review 103 at 108. Return to Article

  16. W. R. Lederman, "The Independence of the Judiciary" in W. R. Lederman, ed., Continuing Canadian Constitutional Dilemmas (Toronto: Butterworths, 1981) 167. This is a republication of Professor Lederman's seminal article in (1956) 34 Canadian Bar Review 769-809, 1139-1179. Return to Article

  17. Peter W. Hogg, Constitutional Law of Canada, Fourth Edition, looseleaf (Toronto: Carswell, 1997) 7-29. The tripartite test is derived from Re Residential Tenancies Act, supra note 14, and has been refined by subsequent jurisprudence. The impugned power must be characterized by the court. The first stage is an historical inquiry as to whether the power conforms broadly to an exclusive power exercised by a section 96 court in 1867 in the four confederating provinces. If there is a tie, it is necessary to examine the position in the United Kingdom in 1867. Sometimes the power may be described as "novel" because it did not exist in 1867, or was transformed subsequently into something entirely different. The second step is undertaken if the historical test of broad conformity is satisfied. The second step determines if the power is "judicial" in nature. If the power is judicial, the court then proceeds to the third step and examines whether the power in its institutional setting still broadly conforms to a section 96 power. The issue is whether the adjudicative function is the sole or central function, or ancillary to general administrative functions or necessarily incidental to a broader legislative policy goal. Return to Article

  18. MacMillan Bloedel v. Simpson, [1995] 4 S.C.R. 725 especially at 743, Lamer C.J.C. Return to Article

  19. Ibid., 751-753. For discussions of the general categories of the provincial superior court core jurisdiction see also The Canadian Bar Association, Towards a New Canada (Ottawa: The Canadian Bar Association, 1978) 50; Noel Lyon, "Is Amendment of Section 96 Really Necessary?" (1987) 36 U.N.B.L.J. 79 at 84; T. A. Cromwell,"Aspects of Constitutional Judicial Review in Canada" (1995) 46 South Carolina Law Review 1027 at 1028 and 1030-1031; and Robin Elliot, "Rethinking Section 96: From a Question of Power to a Question of Rights" 17 at 27-28 in Denis N. Magnuson and Daniel A. Soberman, eds., Canadian Constitutional Dilemmas Revisited (Kingston: Institute of Intergovernmental Relations, 1997). Return to Article

  20. Benjamin N. Cardozo, The Growth of the Law (New Haven: Yale University Press, 1924, eleventh reprint, 1961) 70. Return to Article

  21. Thomas A. Cromwell, "Dispute Resolution in the Twenty-First Century" in Research Papers: Background Studies to the Systems of Civil Justice Task Force Report (Ottawa: The Canadian Bar Association, 1996) 29. Return to Article

  22. Julie Macfarlane, General Editor, Dispute Resolution: Readings and Case Studies (Toronto: Emond Montgomery Publications Limited, 1999) 477. Return to Article

  23. Owen M. Fiss, "Against Settlement" (1984) 93 Yale Law Journal 1073 at 1075. Return to Article

  24. Mr. Justice George W. Adams and Naomi L. Bussin, "Alternative Dispute Resolution and Canadian Courts: A Time for Change" (1995) 17 Advocates' Quarterly 133 at 137. Return to Article

  25. Honourable Patrick T. Galligan, "The Intersection and Confluence of the Existing System of Litigation and Alternative Dispute Resolution" (Justice to Order, Canadian Institute for the Administration of Justice, Saskatoon, 14-17 October, 1998) [unpublished] 3 and Appendix. Return to Article

  26. Chief Justice W. K. Moore, "Annual Report of the Court of Queen's Bench" [Alberta] (February 1999) [unpublished] 7. Return to Article

  27. Ibid., 7-8. Return to Article

  28. Ibid., 8. See also Hon. W. K. Moore, "Mini-Trials in Alberta" (1995) 34 Alberta Law Review 194. Return to Article

  29. Alberta Law Reform Institute, Civil Litigation: The Judicial Mini-Trial (Edmonton: Alberta Law Reform Institute, August, 1993) 33 [hereinafter Civil Litigation]. Return to Article

  30. Ibid., Footnote 33, 10. Return to Article

  31. Secession Reference, supra note 7 at 233. Return to Article

  32. Bernard Schwartz, "Fashioning an Administrative Law System" (1988) 37 U.N.B.L.J. 59 at 66-67. Return to Article

  33. Benjamin N. Cardozo, The Nature of the Judicial Process (New Haven: Yale University Press, 1921, reprinted 1946) 94. Return to Article

  34. Judges are to be independent from other judges in performing the adjudicative function. See Beauregard, supra note 8 at 69 and Lippé, supra note 10 at 152-153, Gonthier J. quoting Beauregard. See also Mr. Justice T. David Marshall, Judicial Conduct and Accountability (Scarborough: Carswell, 1995) 89 and 29-30, and Martin L. Friedland, A Place Apart: Judicial Independence and Accountability in Canada (Ottawa: Canadian Judicial Council, May, 1995) 12. Return to Article

  35. Rule 35(8) of the British Columbia Rules of Court permits a judge who has heard a mini-trial or attended at a settlement conference to preside at the trial if all parties of record consent. See Civil Litigation, supra note 29, Appendix A at 42, and Hon. Madame Justice Beverley M. McLachlin and James P. Taylor, QC, British Columbia Practice (2nd edition) Volume 2, looseleaf (Markham, Ontario: Butterworths, 1979) 35-22. Return to Article

  36. Adams and Bussin, supra note 24 at 140. Return to Article

  37. Joanne Goss, "An Introduction to Alternative Dispute Resolution" (1995) 24 Alberta Law Review 1 at 12. Return to Article

  38. Macfarlane, supra note 22 at 538. Return to Article

  39. Ibid., 561-563. See Also Barry Michael Fisher, "Judicial Review of Errors of Law: A Proposal for Interpretation of Canadian Arbitration Statutes from US Decisions" in Macfarlane, supra note 22 at 565. Return to Article

  40. John J. Chapman, "Judicial Scrutiny of Domestic Commercial Arbitral Awards" (1995) 74 Canadian Bar Review 401 at 422-423. Return to Article

  41. For a discussion of the general difficulty in distinguishing judicial review from an appeal see Hon. R. P. Kerans, Standards of Review Employed by Appellate Courts (Edmonton: Juriliber Limited, 1994) 58. Return to Article

  42. Pezim v. B.C. (Superintendent of Brokers), [1994] 2 S.C.R. 557. The factors for determining the standard of review of specialized tribunals were more recently summarized by Bastarache J. in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982 at 1005-1012. In Willick v. Willick (1995), 158 A.R. 52 (Alta. Q.B.), Deyell J. considered Pezim in determining the standard of review applicable to an appeal of an award under the Arbitration Act, S.A. 1991, c. A - 43.1. Pezim was also applied by MacPherson J., as he then was, in 887574 Ontario Inc. v. Pizza Pizza Ltd. (1995), 23 B.L.R. (2d) 259 (Ont. Ct., Gen. Div.), in which the parties provided for the appeal from the arbitrator's decision. MacPherson J. observed that although Pezim was a case dealing with a legislatively created specialized tribunal, it was "equally applicable to a specialized private arbitrator agreed upon by the parties and confirmed by court order" (see Footnote 3 at 265 of the decision). In Petro-lon Canada v. Petrolon Distribution (1995), 19 B.L.R. (2d) 123 (Ont. Ct., Gen. Div.), the parties in an arbitration had also agreed to a right of appeal. E. MacDonald J. cited Pezim with approval in determining the standard of review. Return to Article

  43. The Canadian Bar Association, Systems of Civil Justice Task Force Report (Ottawa: The Canadian Bar Association, August, 1996) 55. Return to Article

  44. Eugene C. Gerhart, America's Advocate: Robert H. Jackson (New York: The Bobbs-Merrill Company, Inc., 1958) 466, quoting from United States Supreme Court Justice Robert Jackson's "Lawyer's Creed". Return to Article