Law Times

Page 4 April 28, 2014 • lAw Times www.lawtimesnews.com n one of the few rulings on holding public arbitration hearings, a case that will de- termine the amount of pri- vate sector payments to help fund the Blue Box program in Ontario this year will be an open proceeding, a retired Ontario Court of Appeal judge has ruled. Robert Armstrong, who's adjudicating the dispute, con- cluded that arbitration hearings are "presumptively private" but found it's a rebuttable presump- tion. "An open and transparent hearing process in this case will serve the public interest and will not detract from the parties' ability to achieve a fair and just result," wrote Armstrong in a de- cision issued last month. e hearing, scheduled for April 23, was to resolve a dispute between the Association of Mu- nicipalities of Ontario, the City of Toronto, and Stewardship Ontar- io, an industry organ ization for companies that import or manu- facture products that can become Blue Box materials. e private sector is to con- tribute 50 per cent of the annual net costs of the program, as ad- ministered by Waste Diversion Ontario, a provincial agency with private and public sector members on its board. e mu- nicipalities have calculated the total net cost of the program this year at $117 million while Stew- ardship Ontario argues it's just under $96 million. " ere is a great deal of pub- lic money involved," says Dianne Saxe, counsel for the association, which, along with the City of Toronto, was seeking to have the hearing open. Stewardship Ontario, rep- resented by omas Sutton of McCarthy Tétrault LLP, agreed the fi nal decision could be pub- lic but argued an open hearing could undermine the benefi ts of a private arbitration process. "It is a very practical ruling," observes Iain MacKinnon, a lawyer at Chitiz Pathak LLP who frequently acts for the media on open-court issues. "I think he [Armstrong] got the right result." In his analysis, Armstrong noted the case law is "sparse" in Canada on whether arbitration hearings may be open. " e Ar- bitration Act is similarly silent on the issue," wrote Armstrong, who nevertheless found an adjudica- tor does have discretion under the statute to make a hearing public. In one of the few Canadian rulings in this area, an arbitra- tor ordered an open grievance hearing related to alleged patient abuse by a nurse in North Sim- coe Hospital Alliance v. Ontario Nurses' Association. e arbitra- tor sided with the request by the nurses' union to open the hear- ing in part because the hospital is a public institution. In the Blue Box funding dispute, Armstrong agreed with Stewardship Ontario and found the actions of the arbi- trator didn't engage the Charter of Rights and Freedoms. As a r esult, the Dagenais v. Canadian Broadcasting Corp./R. v. Mentuck principles of openness in court proceedings weren't applicable. Waste Diversion Ontario is "not an agent of the Crown" and the arbitrator in this dispute "acts pursuant to the agreement of the parties," wrote Armstrong in explaining that the Charter didn't apply. A long line of authorities in Britain and Australia suggest ar- bitration hearings are presump- tively private, a fact Armstrong cited in his ruling. e decision outlines four factors an arbitrator should con- sider when deciding whether the presumption is rebuttable: the nature of the dispute; the impact of the presence of the public and the media on the proceedings; any negative eff ect on the parties to the proceedings; and whether there's a legitimate public inter- est in ordering a public hearing. "I am satisfi ed that the review of the above factors supports an order for a public hearing," wrote Armstrong. " is arbitration concerns a signifi cant environ- mental protection program for the province of Ontario." e parties can address the matter of confi dentiality "if and when it arises" at the hearing, ac- cording to Armstrong, who also rejected the idea that the pres- ence of media could have an "ad- verse impact" on the proceeding. " e parties are sophisticated and they are represented by experienced and sophisticated counsel," he wrote. Given the "dearth" of case law, "it is an important decision on this issue" because it explains the factors to consider when there's an application to make an arbitration hearing public, says MacKinnon. "We have many cases applying the Dagenais/Mentuck principles when s. 2(b) Charter rights are engaged but very little on what should be taken into account in the context of presumptively private hearings pursuant to the Arbitrati on Act." LT Coupon controversy shows difference in U.S., Canadian law NEWS and it's available to you 24 hours a day. s available y availabl y legal expertise? Looking for Find exactly what you need at www.CanadianLawList.com Starting a business, making a will or buying a house? Declaring bankruptcy, dealing with a personal injury, insurance claim or job loss? If you're in the midst of one of life's big events, help is as close as your smartphone, tablet or computer. Simply go to www.CanadianLawList.com to find the right lawyer for your particular legal need. www.CanadianLawList.com is Canada's most comprehensive online directory of lawyers and law firms. And it's easy to use! You can search by city, legal specialty, or name for listings and contact information. Find the legal expertise you need at www.CanadianLawList.com. Untitled-4 1 13-12-19 3:08 PM nlike their U.S. counterparts, Canadian consumers need not worry about clicking away their rights when they download coupons or like products on Facebook, lawyers say. A controversy over mandatory arbitra- tion clauses gripped American consumers recently a er cereal manufacturer General Mills Inc., which makes brands like Cheeri- os, embedded a term on its web site that said that by downloading coupons, consumers were agreeing to deal with any disputes with the company through arbitration rather than lawsuits. Before General Mills quickly reversed the terms amid the controversy, the manda- tory arbitration clause would have applied when consumers joined the company's on- line communities as well. ose kind of terms wouldn't fl y in Canada, says class action lawyer Daniel Bach, who notes the incident highlights the diff erent ways in which the Canadian and U.S. courts have dealt with mandatory arb itration clauses in consumer contracts. " e government of Ontario has taken strong steps to protect consum- ers and the Supreme Court, when it dealt with this precise issue, decided in a consumer- friendly way," says Bach, a partner at Siskinds LLP. " e upshot of that is the laws of Ontario and Canada appear to be better for consumers and individuals than perhaps the law in the United States is." Ontario's Consumer Protection Act explic- itly says companies can't have mandatory arbitration clauses in consumer contracts. And in 2011, the Supreme Court decided in a 5-4 decision that mandatory arbitration clauses have no place in consumer products. Companies prefer arbitration to tra- ditional litigation for its effi ciency and r educed cost, says busi- ness litigation and com- petition lawyer Nikifo- ros Iatrou. "In litigious jurisdictions like the U.S., with an over-exuberant class actions bar, com- panies understandably search for ways to limit their exposure to poten- tially frivolous lawsuits. "Unfortunately, strat- egies like these appear to miss the mark and be- come a lightning rod for consumer groups that have an equally legitimate interest in ensuring that, where consumers are sold faulty goods, they have a way to hold the seller of the goods to account. One-on-one arbitration is not a realistic option to resolve your typical consumer complaint." When faced with a similar question about mandatory arbitration clauses, the U.S. Supreme Court decided in 2013 that consumers were bound by terms that prohibited them from suing companies. Perhaps because of more consumer- friendly laws, there's a growing trend to- ward class actions in Canada, says Iatrou. He notes that last fall, the top court decided consumers have a right to sue producers even if they're indirect purchasers. "To stick with the Cheerios example, if there was a price-fi xing scheme among sug- ar producers to raise the price of sugar and if that sugar was purchased by General Mills to manufacture Cheerios, the Supreme Court has ruled that Cheerios consumers, as indirect purchasers of the sugar, have a right to sue the sugar producers for viola- tions of the Competition Act," says Iatrou. As class actions multiply, companies will increasingly look for other ways to deal with disputes than protracted litigation. To I atrou, the choice doesn't always have to be either arbitration or a class action. "One innovative solution that has started to develop in the U.S. is something called class arbitration," he says. Class arbitration is "a useful compromise" that includes all of the benefi ts of arbitration while allowing a large group of consumers to come together to have their disputes resolved, he notes. LT Ex-judge orders public arbitration hearing BY YAMRI TADDESE Law Times U 'The government of Ontario has taken strong steps to protect consumers and the Supreme Court, when it dealt with this pre- cise issue, decided in a consumer-friendly way,' says Daniel Bach. BY SHANNON KARI For Law Times I

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