It’s useful to remember that before she was appointed to the Supreme Court of Canada in 1989 and developed a reputation in legal circles for her Charter decisions, Chief Justice Beverley McLachlin researched and wrote in the area of construction law.
Revisiting these past interests, McLachlin CJC wrote an article for an ADR newsletter not too long ago which has also recently reappeared in the US law journal Faulkner Law Review: “Judging the ‘Vanishing Trial’ in the Construction Industry” (2011) 2 Faulkner L Rev 315.
In her reflective piece McLachlin CJC begins by recounting the benefits of alternative dispute mechanisms and the reasons why commercial parties are increasingly abandoning courts in favour of ADR processes, including: (i) the technical and legal complexity of matters being disputed and the consequent desirability of adjudicators with special expertise, (ii) speedier resolution, (iii) preservation of business relationships, (iv) flexibility in processes and outcomes, and (v) confidentiality. Acknowledging the benefits often realized through ADR, as well as the overarching goal of justice systems to facilitate justice, she concludes that: “ADR is here to stay, and that is a good thing.” A further benefit of ADR processes that is often omitted from accounts of its benefits is the fact that it is good for taxpayers because they reduce the burden on courts’ resources.
But she goes on to cite a body of literature which has cautioned of the broader implications of the wholesale relocation of dispute resolution from public courtrooms to private settings and the loss of the “collateral benefits” of resolving disputes by trial, and notes a number of things that ADR generally can’t or doesn’t or won’t do, namely:
- In terms of broader public interests:
- Allowing opportunities for intervention by persons not party to lawsuits,
- Allowing the discovery and publication of important facts,
- Aiding/facilitating the structural transformation of public and private institutions,
- Satisfying public interests by providing checks on government power, and
- Catharsis in dealing with events of public importance.
- And in terms of the practical concerns of the process of law-making:
- The continued development of operative legal principles and “norm-setting”,
- The interpretation of laws so standards for behavior are set, known and enforced, and
- The furnishing of rules and precedents to guide bargaining outside the courts and the settlement of future disputes.
Primarily concerned with the nature of ADR settlements as either completely confidential or, if they are not secret, as “little more than an announcement of how much money changed hands”, McLachlin CJC expresses concern for a future world where the development of law is stunted by a lack of “reasoned and transparent” adjudication or any record of such. Formal ADR processes themselves, which still depend heavily on knowledge of the state of the law, would eventually suffer themselves as a result of dwindling authorities, and in a nightmare scenario bargaining power would tend to pass from parties with the best legal position and (back to) parties able to muster the most threat. This vision echoes the Hobbesian nightmare.
I myself have pointed out the benefits of ADR processes like mediation in the past (www.adambaker.net/mediation-is-good-business/), and, like McLachlin CJC, I think it is hard to deny them and would personally recommend ADR to any client if was apparent that it was in their best interests. But I am also inclined to agree that there is a downside and share her concern for the long term development of the common law.
Benefits of Alternative Dispute Resolution and its use in the construction industry
I won’t rehearse in detail the relative costs and benefits of alternative dispute resolution here, as they are now well known and have been discussed at length by other, more learned writers and practitioners. Some good American blogs on the subject include Ron White’s The Critical Path which is focused on ADR in the context of construction disputes, and Victoria Pynchon’s Negotiation Law Blog, which deals with negotiation and mediation more broadly (both are professional mediators). Another site worth a spot in your RSS feed is Virginia attorney Christopher Hill’s Construction Law Musings, which deals with construction issues generally but which frequently includes posts on ADR.
Suffice it to say that ADR has become widely used in the construction industry in Canada and the United States. It has yet to become as popular in Newfoundland and Labrador but ADR generally is still gaining traction as a method of settling commercial disputes (arbitration in this province is still predominantly labour arbitration). But it is gaining ground and sophisticated commercial contracts, including construction contracts, will include provisions for arbitration or other ADR.
And because of ADR it is possible that the courts may be losing touch with the evolving commercial practices and customs of the construction industry, since they have less contact with it.
A Construction Court?
While it is generally understood that as a matter of public policy encouraging parties to settle their differences out of court is a good thing, one silver lining to a construction industry with a litigious culture was that judges got well-acquainted with the issues and developed a body of jurisprudence understood to be responsive to the issues.
In the United Kingdom, the Queen’s Bench division of the High Court of England and Wales actually has a specialized sub-division called the Technology and Construction Court, which deals primarily with, as one might expect, disputes in the context of technology and construction. As an aside, decisions from the TCC can be found at BAILII here. Construction litigators in Newfoundland and Labrador or elsewhere in Canada might find it worthwhile to pay attention to judicial reasons from the Construction Court.
So, the TCC is a division of the High Court and has all the powers of a court, but also has the advantage of specialization, often touted as an advantage of ADR vehicles, and tends to render decisions of very good quality.
Canada already has some specialized courts. For example, the Tax Court of Canada, and the provincial superior court divisions which have been created to deal with family law matters (in Newfoundland and Labrador the Supreme Court – Family Division).
Can and should Canada have a specialized construction court? The answer may well be no, given that Canada does not have a centralized court system comparable to that of England and Wales – the provincial superior courts will generally have jurisdiction in construction disputes – and any particular province may not have enough construction (and technology) disputes to warrant the creation of a separate division (this said, some provinces, and I am thinking of Alberta and British Columbia, where many of our decisions come from these days, very well might).
But given that sophisticated arbitrations may often involve a level of time, expense and preparation comparable to litigation, if the expertise element were also a non-issue then parties might well want to litigate from the outset.
So, Newfoundland and Labrador Supreme Court – Technology and Construction Division?
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