Law Times

Law Times • December 2, 2013 Page 9 FOCUS Arbitrators hoping for bigger slice of federal work New business possible as MacKay touts more out-of-court settlements BY CHARLOTTE SANTRY Law Times A rbitrators are hoping to seize a bigger slice of federal government work after Justice Minister Peter MacKay called for the settlement of more cases out of court. MacKay told the Legal Feeds blog in August he wanted to reduce the number of civil cases in which the government is "in conflict with the people of Canada." "There's a lot of value added in trying to lessen that number and trying to settle some of these cases out of court through arbitration," he said. MacKay said he didn't know the scale of the litigation caseload, but figures requested by Law Times reveal the federal government was dealing with 49,582 civil litigation cases in 2012-13. That's up from 47,991 the previous year. Of those matters, parties other than the government initiated about 85 per cent of them. Lerners LLP partner Earl Cherniak, whose practice areas include arbitration and mediation, welcomes MacKay's comments. "In Ontario, there are many very competent commercial arbitrators, some of whom have been practising lawyers, who are doing either a large part of their practice or all of their practice in commercial arbitration," he says. Many law firms would welcome the opportunity to take on government work, he believes, due to the size of many federal contracts and the prestige in taking on high-profile cases. However, for MacKay's words to have any effect, commercial contracts would need to include arbitration clauses. Most contracts with the Ontario government contain arbitration clauses, says Cherniak. Alternatively, where no clause exists, the federal government would have to be open to discussing the possibility of arbitration with opposing parties. This would involve a significant shift in approach, says Barry Leon, head of the international arbitration group at Perley-Robertson Hill & McDougall LLP. He agrees firms would want to capitalize on a more arbitration-friendly approach by the federal government. But he says the government needs to "actively promote" alternative dispute resolution. "There hasn't been a push from the top to say this is important," he says. In failing to fully embrace practices regularly used by the private sector, such as early case assessment, the government is "behind the curve," he suggests. The government would also have to pay arbitrators a fair rate. "The government has historically had a fairly tight rein on the rates they pay private sector lawyers," says Leon. likely within a year. The past three years However, research comhave seen a steady reducparing the costs and delays tion in federal spending associated with litigation on external legal counsel and arbitration has come to involved in civil litigation a variety of conclusions. cases, figures show. Federal mediation and In 2011-12, the costs conciliation services findcame to $34.9 million, down ings found the average time from $36.3 million in 2010for a case in arbitration was 11 and $38.4 million in about 475 days whereas a 2009-10. similar case would take up The government has to three years in court. yet to calculate 2012-13 Despite that fact, a expenditures on external 2010 Dundee University counsel, a Department of study found certain types Justice spokeswoman said. of arbitration were more Greater use of arbitration would help to reduce Arbitration is 'a much more efficient way to costly than litigation, escosts further, according to resolve disputes than the court system,' says pecially in complex disputes and where pre-disCherniak, who calls it "a Earl Cherniak. pute clauses locked parties much more efficient way to to a particular arbitration body. resolve disputes than the court system." The Department of Justice's policy is to Cherniak says two parties involved in a complex dispute in Toronto would probably handle legal work in-house as far as poshave to wait until at least 2018 for a court sible, and the decision to outsource must date while they could meet him next week take into account factors such as conflict of to discuss an arbitration with a decision interest considerations, the level of urgency, and the need for expertise. The department has a register of law firms interested in providing legal services. Its web site states: "The onus is on private sector law firms and law practitioners to identify and register their interest, based on their areas of expertise and geographic location." When specific expertise is necessary, the department screens registered firms and individuals before submitting names to the justice minister using the following selection criteria: • Timelines and level of urgency of the work. • Availability of the firms or practitioners and capacity to provide adequate resources and infrastructure. • Suitability of the firm's profile, experience, and expertise relative to the specifics of the work. • Geographic considerations. • Security issues. • Conflict of interest considerations. • Financial matters. • Requirements under the Official Languages Act. • Public interest considerations. • Unique issues associated with the work. LT "McKellar provided peace of mind for the rest of my life." LEANDRE CASSELMAN Development Coordinator Now you're sure. The McKellar Structured Settlement™ Financial security. Guaranteed payments. 100% tax free. Some decisions are easy. Untitled-6 1 www.lawtimesnews.com 13-04-29 11:04 AM

• Cover