Securities, Trial Overflow and Rules: An Update

The Advocate December, 1998

Securities Update

In last month's issue I reported on the renewed and enhanced programme for dispute resolution in the B.C. securities industry, offered by the Investment Dealers Association of Canada and the Vancouver Stock Exchange, through the Centre.

I am now delighted to tell you that the Alberta and Manitoba branches of the IDA have retained the Centre to develop and administer similar programmes for their provinces, and we expect to receive a positive response to our proposal from Saskatchewan before the year is out.

As predicted in my last article, the demand for an effective dispute resolution service in the securities industry is growing as the programme becomes better known. The Centre will be proud to provide the service for all of Western Canada.

Trial Overflow Programme Update

The Trial Overflow Programme commenced in January, 1998. The Programme was designed to provide a speedy and effective arbitration alternative to civil litigants who cannot proceed with trials on their assigned court date in the Vancouver Law Courts due to lack of court facilities or available judges. Counsel and clients whose cases have been "bumped" are offered an arbitration option when attending at the office of the Trial Coordinator to book a new trial date.

Much to the surprise of Court Services and the Judiciary the number of "bumped" cases dropped dramatically starting in September 1997, just before the Programme was put into effect. Until June of that year, there were typically 3 or 4 bumped cases every Monday morning in Vancouver. This translates to an average of about 150 cases a year. However, from September of 1997 to November of 1998, there has been a total of some 20 bumped cases, according to the Trial Coordinator. Of these, a significant number were unsuitable for the Programme (e.g., jury trials and family cases).

We spoke to some of those who did not elect to use the Programme for the few cases which appeared to be suitable. Reasons for their choice included: they had been given a new court date, not far into the future; one of the parties did not wish to use arbitration for "strategic reasons"; a party wished to set a precedent through litigation; the parties had resumed negotiation.

The reasons for the drop in bumped cases are unclear. The Trial Coordinator believes that many more cases are settling as a result of mediation and settlement conferences.

The result has been that the Centre has administered no arbitrations under this Programme...

While there has been no work for the Centre so far under the Programme, it is nevertheless quite possible that the situation in the Courts will change. We have a first class Programme to offer and remain hopeful that it will be used by disputants and counsel. We continue to be in close contact with Court Services who keep the Centre advised of their caseload and the Centre's representatives frequently attend at the Law Courts on Monday mornings. We continue to distribute brochures and maintain a list of available arbitrators.

Rules Update: The Shorter Rules

The Centre has recently published its Shorter Rules for Domestic Commercial Arbitration. They are a simplified set of procedural rules, one quarter the length of the Centre's standard Rules of Procedure.

These Rules are intended to provide a just, speedy, and binding resolution at the lowest possible cost. The Centre encourages their use and especially where the amount of the claim or counterclaim is under $50,000. By using the Shorter Rules, parties make a commitment to minimize the length, complexity and expense of the proceedings.

The Shorter Rules provide for a proceeding conducted by a single arbitrator on the basis of documents and written submissions. However the parties may agree, or the arbitrator may find it necessary, to hold a short hearing to receive oral evidence and/or submissions.

If the parties have not agreed on an arbitrator, the Centre can promptly appoint upon receipt of a Notice to Commence. In order to facilitate appointment of the most suitable arbitrator, the Centre may consult with the parties to further ascertain the nature of the dispute.

The Centre's fee for the administration of disputes under these Rules is $500.

Rules Update: The Expedited Arbitration Rules for Marine Insurance Disputes

Published in September, the Vancouver Maritime Arbitrators Association's Supplementary Expedited Arbitration Rules, as administered by the Centre, provide parties with a short form procedure to resolve disputes involving marine insurance claims and counterclaims up to $50,000. Parties may agree to proceed under these rules for claims involving any amount.

Parties who use these rules intend the arbitration to be conducted on the basis of written submissions with documentary evidence where feasible, without the need for a formal evidentiary hearing. However the parties may agree that a short hearing with oral evidence and submissions may be preferable or necessary in some circumstances, and the rules allow the arbitrator to proceed accordingly.

They are generally meant for parties to a dispute which has already arisen and may be adopted by the parties as part of a submission agreement.

The Centre maintains a roster of 13 arbitrators to hear expedited arbitrations under these rules. Each party ranks the arbitrators according to its order of preference. The rules effectively grant each party the right to veto nearly one-half of the roster. The complete costs of the are meant to be kept at $1,650, to be shared by the parties equally.

International Arbitrations Update While domestic arbitrations and mediations remain the Centre's bread and butter, we do not forget our roots and initial raison d'etre.

The Centre administered an international commercial arbitration which was completed in October of this year. It took only three months to conclude from commencement. It involved parties from the United States and Alberta and arbitrators from Alberta and British Columbia and came to the Centre as a result of an ADR clause specifically naming the Centre.

A further example of an international arbitration which was concluded in a short period of time was provided by a dispute which came to the Centre in August, 1998. Parties were from the US and from BC. The dispute was over a technology licensing agreement. The Centre appointed the arbitrator in mid-September and the award was published in mid-November.

One of our Panel recently chaired an ICC arbitration. The other arbitrators were from England and the parties were Japanese and Australian. Although the official place of arbitration was Singapore, Vancouver was selected as the location for the main hearing. Each side was represented by three barristers and two to four solicitors. The cast included a dozen construction experts and two financial experts on each side. Paralegal local interpreters completed the picture.

The case brought to the Province approximately thirty people on each side, plus the arbitrators for six weeks. A local hotel supplied the hearing and break out rooms. Translators and court reporters were employed. October was glorious and at the end of the session, several participates traveled elsewhere in the Province. The benefit to the Provincial economy was considerable.

To conclude As is hopefully evident from the above, the Centre continues to pursue its mandate to provide the legal and commercial communities with an efficient dispute resolution services. The importance of a neutral administrator for mediations and arbitrations cannot be over emphasized. By providing that neutral service the Centre ensures that the ADR processes move forward in a timely manner and that problems, which can arise from time to time, are dealt with effectively.