Law Times

February 8, 2016

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Law Times • February 8, 2016 Page 3 her attention. If you're from a big firm, that obligation is more like- ly to develop than if you're out on your own." Columbus International and Caribbean Fiber Holdings brought the arbitration in ques- tion against Auto-Guadeloupe Investissment after AGI can- celled a deal to sell its interest in CFH to Columbus. Both sides agreed to retain the Vancouver- based Alvarez as sole arbitrator in 2009, despite him revealing that lawyers in Faskens' Toronto office had done work for CFH's parent company, Leucadia Na- tional Corporation in the past. However, after an initial award that went against it in March 2011, AGI challenged Alvarez's appointment when it became clear that the law firm's work for Leucadia had actually been ongoing during the arbitration, unknown to Alvarez. The com- pany had discovered a post on the Faskens web site dated Decem- ber 2010, boasting about its role in a $575-million deal in which Leucadia off loaded its interest in a Spanish copper mine. The item was repeated in the pages of Lex- pert magazine while Alvarez de- liberated on his award following the closing of arguments. The International Centre for Dispute Resolution, which administered the arbitration, rejected AGI's challenge, but Al- varez resigned and was replaced. Columbus then applied success- fully to a French court to enforce his award, but he lost on appeal when a judge ruled Alvarez's declaration of independence at the outset of the arbitration was incomplete. Taking into account the size of the copper mine deal, Faskens' three-partner team, and the firm's publicity drive, the Paris Court of Appeal found the work was an important engage- ment and that Alvarez's omission created reasonable doubt about his independence. The Court of Cassation upheld the decision in the final judgment on the matter. Aaron Rubinoff, the co-chair of Ottawa firm Perley-Robertson Hill and McDougall LLP, says the French decision has intensi- fied an ongoing debate about the extent of arbitrators' disclo- sure obligations, and he worries it could embolden "sore losers" looking for any means to attack a decision they don't like. "In most cases, there are no rights of appeal, and if there's a serious conf lict, it may be irre- sponsible not to take some time to explore your options related to the arbitrator and jurisdiction," he says. "But it may be equally ir- responsible to take every excuse to get out of a decision that you don't like. That could end up un- dermining the whole system and reduce its viability as a tool in dispute resolution." Pierre Dalphond, a former Quebec Court of Appeal judge who now conducts international arbitrations from his base at Stike- man Elliott LLP's Montreal office, shares Cherniak's sympathy for Alvarez, but he says the French decision was necessary to preserve faith in the arbitration system. "To me, it sends the right mes- sage that transparency and inde- pendence are key to the system. Arbitration is based on the con- sent of the parties, and when they appoint an arbitrator together, they are relying on trust. Private arbitration has become critical to the commercial world, but if people stop having full trust in the system, they will stop using it," Dalphond says. "For law firms and people involved in arbitra- tion, that means they need to get a very sophisticated conf lict check system that can provide all the information they need when they are approached, and raise any red or yellow f lags. In the case of any doubt, you have to be prepared to dig yourself." Once a thorough conf licts check has been performed, Har- vey Kirsh's mantra is "disclose, disclose, disclose." "The worst that happens is you don't get the retainer, but at least you preserve the integrity of the award," says Kirsh, a veteran of international and domestic arbitrations, and the recent re- cipient of the Ontario Bar Asso- ciation's award for excellence in alternative dispute resolution. LT sat before they were on the bench themselves, and that has given rise to certain discomfort," said Mercer. "The fact that there have been and are likely to be more recusals is likely to cause acute inconve- nience and delay in the adminis- tration of justice," Mercer added. It also created fears that the court might not be impartial with a former judge acting as counsel or an advocate. Mercer explained there are two categories that apply to re- tired judges who wish to return to practice. The first category covers former judges of the Supreme Court of Canada, the Court of Appeal for Ontario, and the Fed- eral Court of Appeal. There is no cooling-off period for these judges. They have to obtain ap- proval from the panel before ap- pearing as counsel. The second category covers former judges who sat in Federal Court, Tax Court of Canada, and the Ontario Court of Jus- tice, and the Superior Court of Justice. In this category, there is a three-year cooling-off period. During the cooling-off period, permission from the tribunal is required to appear as counsel. After the cooling-off period is finished, permission isn't required. The new rules place the Supe- rior Court of Justice judges in the first category. Although supporting the changes, LSUC bencher Rocco Galati says the policy amend- ments don't quite go far enough. "For my liking, I think we should remove the right to apply [for reinstatement] as well," he says. A specialist in civil litigation, former Ontario Bar Association president and partner with Gil- bertson Davis LLP, Lee Akazaki, takes a different view. He says there is a high level of expertise that will be denied those who might choose to hire a former judge to represent them. He says judges should not recuse them- selves only because a former judge is due to appear before them, because it lacks a princi- pled reason. "The right to choose counsel is a fundamental right within Canadian society; that right can- not be trampled on without a principled reason that goes to the administration of justice," he says. "There's this belief that coun- sel appearing against a retired judge would feel intimidated or reluctant; as far as I'm con- cerned, you have to treat any opposing counsel with the same due respect as you would a Supe- rior Court judge and you should treat opposing counsel with the same amount of objectivity." Akazaki says a better way to deal with the emerging concerns would be to establish a clear set of rules to establish if there is a conf lict of interest for the for- mer judge to appear on any given case as a lawyer. "The gut reaction is not al- ways the correct one; these people lived and worked and breathed law all their lives and it's very difficult to say to them 'you can't have anything to do with the law anymore apart from coming to the cocktail parties,'" he says. "They have a lot to contribute, they have the expertise in the law, they are not going to be more of a risk to clients, and they're not going to be a risk to the public." The amendments made dur- ing Convocation only addressed swinging the Superior Court of Justice into the first category and the wording amendments to the application process. Mercer said the LSUC's pro- fessional regulation committee will be making inquiries of the Ontario Court of Justice and Federal Court for commentary if they also wish to see similar policy changes. Ian Binnie, who served 14 years as a justice of the Supreme Court of Canada and is now counsel at Lenczner Slaght, says there are few, if any, circum- stances where a former judge should appear as a lawyer in a Canadian court. He said he was pleased to see the LSUC policy change for the Superior Court of Justice to re- move a three-year cooling-off period and hopes other courts follow suit shortly. "It's a situation that shouldn't exist," he says. "You always have to consider in these cases the position of the losing party; are they going to go away from court thinking they got a raw deal because the other side had a former judge? Even if that's not the reality, that will be the perception and I don't think the courts want to give that im- pression." He said beyond the Superior Court of Justice, the tax court should be wary. "If a former tax court judge showed up to argue on behalf of the taxpayer against the govern- ment, it simply would look as if the process was skewed," Binnie says. "There's a sensitivity at- taching to anybody who has sat on the bench as a judge; the situ- ation is a bit different with some of the tribunals." Binnie says for boards and tribunals, appointments tend to be short-term and sometimes are not renewable and should not have further hindrances on returning to practice. "Subjecting board members to the same rules as judges could have a very bad effect on recruit- ment; overly strict rules would prevent a 45-year-old board member who is not renewed from going back to their profes- sion," he adds. LT LSUC changes rules for retired judges returning to court NEWS Continued from page 1 Decision intensifies debate about disclosure obligations Continued from page 1 The Law Foundation of Ontario has been advancing access to justice in Ontario, and beyond, for more than 40 years. Through granting and collaboration, the Foundation invests in knowledge and services that help people understand the law and use it to improve their lives. Ms. Mathews is a trailblazer with an unwavering commitment to public legal education. Through her leadership at CLEO, she has improved the quality of public legal education and information, pursued innovative research and built relationships that have expanded access to justice. The Guthrie Award was created in honour of past Foundation Chair, H. Donald Guthrie. The award is given to individuals and organizations demonstrating outstanding public service by making significant contributions to access to justice. THE LAW FOUNDATION OF ONTARIO IS PLEASED TO PRESENT THE 2015 GUTHRIE AWARD TO JULIE MATHEWS, EXECUTIVE DIRECTOR OF COMMUNITY LEGAL EDUCATION ONTARIO. ntitled-1 1 2016-02-03 9:28 AM Ian Binnie says there are few, if any, circumstances where a former judge should appear as a lawyer in a Canadian court.

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