How will COVID-19 shape the future of arbitration?

| 4 minutes

The COVID-19 pandemic has brought a lot of uncertainty to many areas of our lives. We are in unchartered territory, and so is the whole judicial system across Canada. The court system has undertaken a palpable effort to quickly react and adapt to what now seems to be a state of transition, and could possibly transform the legal norm into a new one. Every turning point in history has brought institutional reform, and most of the time, for the better. Interestingly, the world of arbitration is quickly adapting to COVID-19. This is because arbitration adapts to its users’ needs, allowing for flexible options, and remaining open to creative solutions.

Courts are currently gasping for fresh air in an effort to ensure that the Canadian legal system upholds one of our most fundamental rights: access to justice. Following a temporary halt, the court system is working to adapt to provide access to a wide variety of litigants, with huge variations in facilities across the country, and the need to prioritize urgent criminal and family matters.  

Compared to that challenge, arbitration can be flexible, especially for commercial litigants, and it can respond more quickly than perhaps the courts will generally be able to. For instance, as of March 31, 2020, the Court of Queen’s Bench of Alberta announced that, in light of the current suspension of hearings, the Court was “encouraging counsel and the public to access alternative dispute resolution mechanisms, including mediation and arbitration”[1]. In addition, the Court announced that, effective March 30, 2020, it will process, by email or fax, all consent orders resolving any matter over which the Court has jurisdiction, including consent orders to enforce mediation or arbitration awards.

In fact, while we are now discussing the possibility of examinations out of court by way of technology, in arbitration cases, this has been present for some time. While we are addressing urgent measures, arbitration has long been capable of accessing decision makers on an urgent basis. While we are concerned that limited access to paper copies and court filing requirements may derail a proceeding, arbitration has been using technology more prominently than traditional litigation despite complex arbitration cases often involving the management of voluminous evidentiary records.

So what has prevented us from arbitrating more and litigating less? It may be that stakeholders are reluctant to grant private authority to a person deciding their dispute, with limited grounds to appeal before a court. It may also be the costs associated with conducting an arbitration and disbursing fees for an arbitrator. However, now is the time to adapt. Access to justice and business relationships should not be put on hold, to the extent possible, during the COVID-19 pandemic.

Arbitration is an alternative and effective way of resolving a dispute usually with one arbitrator being appointed by the parties. One of the key components of arbitration is the privacy and the confidentiality of the process. Another advantage is the flexibility and pragmatism of the arbitral process, its efficiency, and innovative mechanisms.

Even though parties have not negotiated an arbitration clause in their contracts, they can still opt for arbitration even after the dispute has arisen. Ad hoc arbitrations may soon be on the rise in domestic disputes, providing parties with multiple advantages.

Still, international arbitration has its own challenges in the face of COVID-19 pandemic. Given that parties, arbitrators, and witnesses are usually in different locations, travel restrictions have caused delays and postponements of hearings in many countries. Arbitral Institutions and Arbitral Courts have issued precautionary measures during this crisis. However, they seem to adapt rather quickly to the reality of COVID-19, with some institutions offering an online filing system (e.g. LCIA) or by email (e.g. ICC). In Canada, Arbitration Place has introduced an expanded service called Arbitration Place Virtual, “offering completely remote eHearing options, as well as safe, on-site “distanced” solutions, allowing your dispute resolution proceedings to continue without interruption during this time”[2].

One of the core features of arbitration is its ability to adapt to its users’ needs. International arbitration will adapt further to the new reality of its users, increasing the demand for technological tools and resources. These could be used with the consent of the parties and the arbitrators even if they are not provided for in the procedural rules governing the arbitration. Even before COVID-19, it was not unusual for arbitration users to retain videoconferencing services to prepare clients and witnesses, or even hold virtual meetings.

As the focus on the use of technology in conducting arbitrations amplifies, examinations being conducted remotely, as well as online submissions, may become the norm in order to overcome social distancing and travel restrictions. What may at first seem to be temporary measures in the face of a global crisis, there is little doubt that the evolving practices in the world of arbitration will survive long after the threat of COVID-19 has gone.   

In closing, as the legal system finds new ways to navigate the way we litigate, arbitration may be seizing an opportunity. Indeed, arbitration is becoming a suitable avenue, and in some cases, the only available avenue, to advance dispute resolution at this time.

[1]       https://albertacourts.ca/qb/resources/announcements/alternative-dispute-resolution

[2] https://www.arbitrationplace.com/covid-19-the-way-forward.

arbitration international arbitration commercial arbitration COVID-19 alternative dispute resolution

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