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Court vs. commercial arbitration after COVID: Adapting to the virtual

Friday, September 04, 2020 @ 8:42 AM | By Jeffrey Leon


Jeffrey Leon %>
Jeffrey Leon
Five years ago, my colleague Gannon Beaulne and I published an article in The Advocates' Journal (Summer 2015 at pages 11-21) titled Making up your mind: Trial litigation versus Arbitration in the Commercial World. The title was derived from the well-known song by the Lovin' Spoonful: “Did you ever have to make up your mind?/ You pick up on one and leave the other behind./ It's not often easy and not often kind./ Did you ever have to make up your mind?”

In that article we engaged in a 10-part debate on the pros and cons of resolving disputes by way of trial in court versus arbitration. In summary, we looked at the issues of: choice of decision maker; privacy and confidentiality; flexibility; speed; neutrality; choice of law; finality; multiple parties and contracts; enforceability; and process and costs.

Our conclusion noted that the court litigation process and the arbitration process were — and they continue to be — in a state of flux in trying to accommodate “the business community's demand for faster, more efficient and more proportionate access to justice.”  

We further noted that “the true value of both arbitration and litigation turns on the parties, the context and the nature of the dispute.” So that in deciding whether to litigate in court or arbitrate, a careful analysis of the advantages and disadvantages should be undertaken. Our own scoring of the debate at the time gave a slight nod to litigation. But we did acknowledge that others' scorecards might differ.

The current “crisis” in dispute resolution caused by the COVID-19 pandemic led me to reconsider our conclusion. Similarly, it has led many commercial and other litigators to reconsider what would be best for their clients.

I will not repeat here what has been the subject of numerous articles on the pros and cons of virtual proceedings, whether in court or in arbitration. One common theme throughout the literature and commentary is that there will be a “new reality” to dispute resolution processes post-COVID-19. While there is a difference of opinion on the extent to which we will go back to the way things were, maintain a new “virtual reality,” or evolve to a more “hybrid reality,” there does appear to be consensus that to some degree virtual aspects of proceedings are here to stay.

And to the extent that a virtual process reduces the costs of dispute resolution and allows for faster resolution of disputes, that is a good thing. It is an even better thing if virtual processes can be made as effective as in-person processes — or possibly even better in some ways to compensate for “virtual deficiencies.” If outcomes are fair and just and can be provided at a lower cost and/or in less time, justice will be further ahead.

On reflection, there now should be two more parts to our debate on the pros and cons of court litigation versus arbitration.

The first new issue is adapting to virtual proceedings. Both arbitration participants (including most arbitral institutions and many arbitration hearing centres) and courts have moved quickly to introduce, adapt and use virtual technology, and other technologies, for many aspects of and types of proceedings. It does appear, however, that arbitration proceedings have the advantage of having been able to move faster and more seamlessly in that direction.

While in my view both courts and arbitration should return as soon as it is possible to do so safely to being able to offer some in-person hearings, or at least hybrid hearings, there should also continue to be a preparedness to deal with a variety of matters, both before and during a hearing or trial, virtually. This will be easier to do in the arbitration context, particularly in the international commercial context, with resulting significant savings of time and cost. So, with this factor in play I do not believe that the result of the debate can still be a nod in favour of court litigation.

This is the first of a two-part series.

Jeffrey Leon is a partner at Bennett Jones LLP and an arbitrator and mediator with Arbitration Place in Toronto. He is the immediate past president of the American College of Trial Lawyers.

Photo credit / KaterynaRusnak ISTOCKPHOTO.COM

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