Archive for the ‘Litigation and ADR’ Category

Shafik Bhalloo
Tuesday, October 28th, 2014    Posted by Shafik Bhalloo (posts) and Alisha Parmar (posts)
Shafik Bhalloo
Shafik Bhalloo has been a partner of Kornfeld LLP since 2000. His practice is focused on labour and employment law, and on commercial and civil litigation. He is also an Adjudicator on the Employment Standards Tribunal and an Adjunct Professor in the Faculty of Business Administration at Simon Fraser University.
Alisha Parmar
Alisha comes to Kornfeld LLP from University of British Columbia as an Articling Student. Her primary area of interest lies in: general corporate commercial law.

By Alisha Parmar and Shafik Bhalloo

Introduction

Non-competition clauses are hardly a rarity in employment contracts. The classic non-competition clause seeks to protect the business of an employer by prohibiting a former employee from, generally speaking, competing with the employer once the employment relationship is terminated.

It is well-established that courts are unsympathetic towards non-competition clauses. It has been recognized under the doctrine of restraint of trade that non-competition clauses are contrary to public policy, since they “interfere with individual liberty of action and because the exercise of trade should be encouraged and should be free”.[1] As a result, non-competition clauses are prima facie unenforceable, unless the party trying to enforce the clause is able to demonstrate that it is reasonable. In Aurum Ceramic Dental Laboratories Ltd. v Hwang (“Aurum”), the Court summarized the criteria to be met to find a non-competition clause reasonable:

(a)    the clause protects a legitimate proprietary interest of the employer;

(b)   the restraint is reasonable between the parties in terms of:

  1. temporal length;
  2. spatial area covered;
  3. nature of activities prohibited; and
  4. overall fairness;

(c)    the terms of the restraint are clear, certain and not vague; and

(d)   the restraint is reasonable in terms of the public interest with the onus on the party seeking to strike out the restraint.[2]

Failure to meet any one of the criteria above renders a non-competition clause unenforceable. However, until recently, the state of the law was ambiguous as to whether more nuanced clauses would even be considered non-competition clauses, and therefore whether or not such clauses could avoid the reasonableness test completely. For example, where a clause is not prohibitory per se, but instead imposes some other burden on the employee for competing, it was unclear whether it would be considered a non-competition clause at all. The BC Court of Appeal recently addressed this issue in Rhebergen v Creston Veterinary Clinic Ltd. (“Rhebergen”), and clarified that a creative non-competition clause is still a restraint of trade.[3]

The Facts of Rhebergen

Rhebergen involved an employee, Dr. Stephanie Rhebergen, and her employer, Creston Veterinary Clinic (“CVC”). CVC is exceptionally isolated in that the closest clinics to CVC are 60 miles away and require a trip over the Canada-US border. The majority of CVC’s business is drawn from a handful of dairy farms located in the Creston, British Columbia area.

As a newly licenced veterinarian, Dr. Rhebergen decided to enter into an associate agreement with CVC, wherein she would be paid to work with CVC for three years. The agreement provided that Dr. Rhebergen would be paid $65,000 for each of the three years. It also stated that Dr. Rhebergen would have to pay CVC if, within three years after the agreement was terminated, she set up practice in Creston, or within a 25 mile radius of CVC’s place of business in Creston (the “Clause”). Specifically, Dr. Rhebergen would have to pay $150,000 if her practice was set up within one year of terminating the agreement, $120,000 if her practice was set up within two years, and $90,000 if it was set up within three years.

A little over a year into the agreement, differences arose between Dr. Rhebergen and CVC, and the agreement was terminated. A few months later, Dr. Rhebergen sought a declaration that the Clause was unenforceable, so that she could “set up a mobile dairy veterinary practice in Creston and vicinity”.

Summary of Trial Decision

Mr. Justice Betton gave brief reasons and found that the Clause was in fact a non-competition clause, even though it did not directly prohibit Dr. Rhebergen from competing. The judge then applied the criteria from Aurum and found that the Clause did not meet the test for reasonableness because it was ambiguous, and therefore unenforceable. CVC appealed the decision, including appealing the finding that the Clause constituted a restraint of trade to begin with.

The Court of Appeal

Although the majority of the Court allowed the appeal, the minority and majority only differed on whether the Clause met the criteria for reasonableness. Notably, the majority of the Court of Appeal endorsed Mr. Justice Lowry’s reasoning that the Clause was indeed a non-competition clause.

The decision of Mr. Justice Lowry is illuminating, as it includes an extensive review of the English and Canadian authorities regarding whether a clause is a restraint of trade or not. In reviewing the jurisprudence, Mr. Justice Lowry commented that two strands of authority have been established by modern jurisprudence: the “formalist” approach and the “functionalist” approach. The formalist approach was relied on by CVC to argue that because the Clause does not prohibit Dr. Rhebergen from practicing outright, it cannot be a non-competition clause.

Mr. Justice Lowry noted that this approach requires a clause to be structured as a prohibition in order to constitute a restraint of trade. Under this view, clauses that simply impose a burden on the employee cannot be non-competition clauses. This may be counterintuitive, as “mere disincentives to post-employment competition are not sufficient to trigger the doctrine, even if those disincentives operate as effectively at dissuading competitive conduct and participation in the marketplace as a prohibition”.[4] In conducting a review of the various authorities, Mr. Justice Lowry noted that the jurisprudence in Ontario favours the formalist approach.

The functionalist approach, on the other hand, asks whether “the clause at issue attempts to, or effectively does, restrain trade, in which case it will be captured by the doctrine and subjected to reasonableness scrutiny”.[5] Mr. Justice Lowry noted that the functionalist approach has been widely accepted in English law, and that it is clear that a strict prohibition is not required for the doctrine of restraint of trade to apply. Mr. Justice Lowry then went on to determine that the functionalist approach is the preferred approach:

In my view, the functionalist approach established in English law is to be preferred as the legal basis for determining whether clauses that burden employees with financial consequences, whether by payment or forfeiture, they would not otherwise have for engaging in post-employment competition constitute a restraint of trade. In the words of Lord Wilberforce, it is a matter of the effect of the clause in practice over its form.[6]

In applying this reasoning to the Clause, Mr. Justice Lowry found that it was a non-competition clause because “it compromises the opportunity to compete with the clinic Dr. Rhebergen would otherwise have”.[7] The majority agreed with Mr. Justice Lowry’s finding that the Clause was a non-competition clause, and the Court of Appeal unanimously accepted that the functionalist approach governs in British Columbia.

Comments

Although the Clause in Rhebergen was ultimately allowed to stand by the majority, the decision and the unequivocal adoption of the functionalist approach has implications for employers.

For one, the BC Court of Appeal has now made it clear that it will be the effect and not the form of the clause which will be determinative. Employers intending to restrain the post-employment activities of their employees will not be able to disguise the proverbial wolf in sheep’s clothing – a non-competition clause by any other name will still be unenforceable if it is unreasonable.

A second possible effect of Rhebergen is that the functionalist approach will capture a larger range of restrictive clauses. Recall that the test under the functionalist approach captures even those clauses that “attempt to” restrain trade. Although only time will tell exactly what type of clause this will apply to, proactive employers will want to think carefully about and exercise caution in imposing post-employment burdens on employees, lest they be deemed non-competition clauses.


[1] Shafron v KRG Insurance Brokers (Western) Inc. 2009 SCC 6 at para 6

[2] Aurum Ceramic Dental Laboratories Ltd. v Hwang (1998) 77 A.C.W.S. (3d) 161 (BC SC) (“Aurum”) at para 11

[3] Rhebergen v Creston Veterinary Clinic Ltd., 2014 BCCA 97 (“Rhebergen”)

[4] Ibid, at para 29

[5] Ibid

[6] Ibid, at para 42

[7] Ibid, at para 43

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Herb Silber
Wednesday, October 8th, 2014    Posted by Herb Silber (posts)
Herb Silber
Herb Silber brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

Sattva Capital Corp v. Creston Moly Corp, 2014 SCC 53 (Sattva)

In the past I have posed the question as to whether Arbitration can be more cost effective and efficient than a court process. The recent Supreme Court of Canada decision, Sattva, provides a complete compendium on the right to appeal a decision of an arbitrator. The upshot of that case is to clarify (if it had been required) that the right to appeal an arbitrator’s decision, particularly when the subject matter of the arbitration is the interpretation of a contract, is very limited- even more so than an appeal from a decision of an inferior court. The result is that it presents another benefit to the insertion of an arbitration clause in an agreement for those parties who wish to ensure that, in the event of a dispute, the outcome of a decision by the arbitrator is likely to be final, thus limiting the cost and enhancing the efficiency of this alternative dispute mechanism. Sattva represents the latest pronouncement of the Supreme Court of Canada’s philosophical adherence to providing parties access to justice by limiting the ability to appeal an arbitrator’s decision, thus ensuring that the more financially robust party will not be able to “tilt the playing field.”

Briefly, the facts in Sattva involved a contractual dispute over a finder’s fee that Sattva alleged was owing to it. In particular, under their contract, Sattva was to be paid a fee of US $1.5 million in shares. The issue that the arbitrator was asked to consider was the date the shares were to be valued. Nine million shares hung in the balance based on the alternative dates each of the parties contended for.

The Court first dealt with principles of contract interpretation and concluded that as most contracts involved a consideration of mixed fact and the law, the right to appeal under S. 31 of the Arbitration Act, SBC 2004, which is limited to questions of law, would rarely be able to be resorted to. The result of this is that in arbitrations involving an interpretation of a contract, which is most often the case, the arbitrator’s decision is likely to be final.

 

Additionally, the Court weighed in on the test to be applied by a court reviewing an arbitral decision, if it has the jurisdiction to do so. The Court’s approach was to re-iterate the importance it places on giving great latitude or deference to the arbitrator in his decision making process. This stems from recognition of the importance of maintaining the integrity of the arbitral process. As the Court noted at paragraph 89 of Sattva, arbitration often is chosen “…to obtain a fast and final resolution…” Later at paragraph 105, the Court observed that “… it may be presumed that [because the parties choose their decision maker] such decision makers are either chosen based upon their expertise in their area which is the subject matter of the dispute or are otherwise qualified in a manner acceptable to the parties.” For these reasons, the Court identified that the test for overturning an arbitral decision should be akin to that of overturning a decision by an administrative tribunal-reasonableness. This presents a high bar to overturn an arbitral decision.

The Sattva case represents, in my opinion, a high water mark in the promotion of an efficient and cost effective process that the parties can look to if they choose to have any disputes that may arise in their commercial relationship governed by arbitration.

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Posted by Herb Silber (posts) | Filed under Litigation and ADR | ....
Shafik Bhalloo
Monday, September 29th, 2014    Posted by Shafik Bhalloo (posts) and Alisha Parmar (posts)
Shafik Bhalloo
Shafik Bhalloo has been a partner of Kornfeld LLP since 2000. His practice is focused on labour and employment law, and on commercial and civil litigation. He is also an Adjudicator on the Employment Standards Tribunal and an Adjunct Professor in the Faculty of Business Administration at Simon Fraser University.
Alisha Parmar
Alisha comes to Kornfeld LLP from University of British Columbia as an Articling Student. Her primary area of interest lies in: general corporate commercial law.

 

INTRODUCTION

In today’s workplace, privacy is an evolving issue and Canadian privacy law is developing rapidly. Perhaps surprisingly, only a handful of Canadian jurisdictions, (including British Columbia, Saskatchewan, Manitoba and Newfoundland) have privacy legislation that creates a statutory tort or civil right of action for invasion of privacy. Until recently, most Canadian jurisdictions could only rely on legislative schemes that applied in very specific contexts – there was no general remedy for an invasion of privacy, unless the claimant managed to successfully establish the existence of a common law right to bring a civil action.

That changed when the common law tort of invasion of privacy was given teeth by the Ontario Court of Appeal in Jones v Tsige, 2012 ONCA 32 (“Jones”), wherein the Court definitively recognized the common law cause of action for intrusion upon seclusion. In Jones, the tort of intrusion upon seclusion enabled the plaintiff to recover not insignificant damages for the invasion of her privacy where no legislative scheme applied and where she had suffered no pecuniary loss.

But the bite of Jones and the tort of intrusion upon seclusion do not stop there. This year, the Ontario Superior Court of Justice relied on Jones to certify a class action proceeding against an employer for, inter alia, vicarious liability of an employee’s tort of intrusion upon seclusion. While the case, Evans v The Bank of Nova Scotia, 2014 ONSC 2135 (“Evans”), has yet to proceed to trial, the decision is one to watch out for. Whether or not the employer is ultimately found liable for the employee’s breach of privacy, Evans serves as a reminder that the law around breach of privacy is progressing swiftly and that employers must keep up.

JONES V TSIGE

The Facts

The plaintiff, Ms. Jones, and the defendant, Ms. Tsige, were both employees of the Bank of Montreal (“BMO”). Another coincidental common factor was that Ms. Jones’ former husband had formed a common law relationship with Ms. Tsige. However, Ms. Jones and Ms. Tsige did not know each other, and they worked at different branches of the BMO in different positions.

By virtue of her position with the BMO, Ms. Tsige had access to Ms. Jones’ personal information, and on at least 174 occasions, using her computer at her workplace, Ms. Tsige did in fact access Ms. Jones personal information. The information included Ms. Jones’ date of birth, marital status, language spoken, residential address, and details of her financial transactions in her personal accounts with the BMO.

The BMO discovered Ms. Tsige’s activities and confronted her. Ms. Tsige admitted to the BMO that she had no legitimate reason for accessing Ms. Jones’ personal information. Instead, Ms. Tsige explained she had been accessing Ms. Jones’ information since she was in a financial dispute with her common law spouse (Ms. Jones’ former husband) and wanted to find out if he was paying Ms. Jones child support. Notably, Ms. Tsige did not make any copies of or disseminate Ms. Jones’ personal information.

The BMO disciplined Ms. Tsige by meting out a five-day suspension and denying her a yearly bonus. The BMO also issued her a warning that future repetition of her conduct would result in termination of her employment. Ms. Tsige was asked to review and discuss the BMO privacy principles and standards.

The Ontario Superior Court

Ms. Jones lodged an action in the Ontario Superior Court of Justice asserting that her privacy interest in her confidential banking information was “irreversibly destroyed” and claimed damages of $70,000 for invasion of privacy and breach of fiduciary duty, and punitive and exemplary damages of $20,000 against Ms. Tsige.

The Court held there was no fiduciary duty owed by Ms. Tsige to Ms. Jones and dismissed the breach of fiduciary duty claim, finding there was no fiduciary relationship between them in the traditional or non-traditional sense.

With respect to the invasion of privacy claim, the Court rejected the notion that in Ontario a common law tort of invasion of privacy exists. As a result, the privacy claim was also dismissed. The Court stated that in spite of the dismissal, Ms. Jones was not without remedy because she could bring an action for invasion of privacy under the federal Personal Information Protection and Electronic Documents Act, 2000 c. 5 (“PIPEDA”).

The Ontario Court of Appeal

Ms. Jones appealed the Superior Court’s ruling to the Ontario Court of Appeal only on the ground that Ontario law does not recognize the tort of invasion of privacy. The Court of Appeal reversed the lower Court’s decision, recognized the tort of intrusion upon seclusion, and awarded Ms. Jones damages.

In order to come to the conclusion that the tort of intrusion upon seclusion exists in Ontario, the Court of Appeal conducted an extensive review of Canadian, American, and English jurisprudence on the tort of invasion of privacy. The Court found the comments of Professor Prosser particularly compelling, and stated that if Ms. Jones did have a cause of action for the invasion of her privacy, it would fall in Professor Prosser’s first category of invasion of privacy, namely intrusion upon seclusion.[1]

For her case, Ms. Tsige submitted that the existing Ontario and federal legislative framework addressing privacy is an adequate basis for the Court to refuse to recognize the emerging tort of intrusion upon seclusion. To that end, Ms. Tsige argued that expansion of the law in the area should be left to Parliament and the legislature.

The Court of Appeal considered and rejected this argument, pointing out the various deficiencies in the legislative framework with respect to Ms. Jones’ case. Namely, the legislation that Ms. Jones could use, PIPEDA, only deals with “organizations” that are within federal jurisdiction and does not address the existence of a civil cause of action for invasion of privacy within provincial jurisdiction. In addition, Ms. Jones would only be able to use PIPEDA to lodge an action against the BMO, not Ms. Tsige, and the statute would not permit her to recover damages. Further, the Court of Appeal identified that existing Ontario legislation does not provide for a private cause of action between individuals; it merely addresses individual privacy rights in the context of governmental and other public institutions.

The Court of Appeal then confirmed the existence of a right of action for intrusion upon seclusion, reasoning as follows:

Recognition of such a cause of action would amount to an incremental step that is consistent with the role of this court to develop the common law in a manner consistent with the changing needs of society.

For over one hundred years, technological change has motivated the legal protection of the individual’s right to privacy. In modern times, the pace of technological change has accelerated exponentially…

It is within the capacity of the common law to evolve to respond to the problem posed by the routine collection and aggregation of highly personal information that is readily accessible in electronic form. Technological change poses a novel threat to a right of privacy that has been protected for hundreds of years by the common law under various guises and that, since 1982 and the Charter, has been recognized as a right that is integral to our social and political order.

The Legal Elements of Intrusion upon Seclusion

The Ontario Court of Appeal expressly adopted the key features of intrusion upon seclusion as delineated in the Restatement (Second) of Torts (2010). The legal elements are that:

  1. The defendant’s conduct must be intentional, which includes reckless conduct;
  2. The defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and
  3. A reasonable person would regard the invasion as highly offensive causing distress, humiliation, or anguish.

The Court of Appeal opined that recognizing intrusion upon seclusion as a cause of action does not pose a serious risk of opening the proverbial “floodgates”. The Court stated only “deliberate and significant invasions of personal privacy” are caught by the tort and not de minimus cases:

Claims from individuals who are sensitive or unusually concerned about their privacy are excluded: it is only intrusions into matters such as one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively on the reasonable person standard, can be described as highly offensive.

Nonetheless, the Court indicated that a plaintiff is not required to establish actual loss or damages as part of the cause of action. In this respect, the tort of intrusion upon seclusion is similar to the statutory causes of action for invasion of privacy which exist under the legislative schemes implemented in the four provinces, including British Columbia.

Having said this, the Court stated that where the plaintiff has suffered no pecuniary loss, only “symbolic” or “moral” damages are appropriate to acknowledge the wrong done. After considering Ontario case law and the Manitoba Privacy Act, the Court of Appeal established the upper range for damages where no pecuniary loss is suffered at $20,000. The Court then awarded Ms. Jones $10,000, the mid-point of the range, stating that Ms. Tsige’s conduct was “highly offensive to the reasonable person and caused humiliation, distress and anguish”, but that it did not qualify as “exceptional circumstances” meriting an award of punitive or exemplary damages – those awards were to be left for “truly exceptional circumstances”.

EVANS V THE BANK OF NOVA SCOTIA

The Facts

Evans also involves another major bank, the Bank of Nova Scotia (“BNS”), where an employee illegitimately accessed customer information. The employee, Mr. Wilson was a mortgage administration officer for the BNS, and as such had access to highly confidential customer information.

Over the course of approximately one year, Mr. Wilson accessed the files of 643 customers of the BNS and forwarded private information to his girlfriend. His girlfriend then distributed the information to individuals who used it to commit identity theft and other fraud. Unlike Jones, it was law enforcement and not the bank that uncovered the scheme. The arrangement and Mr. Wilson’s involvement was exposed by the Calgary Police in the course of executing a search warrant against individuals who were attempting to use the information to perpetrate fraud in Alberta. Mr. Wilson was confronted and confessed to improperly printing and accessing customer profiles for individuals who had applied for mortgages.

The BNS gave notice to the 643 individuals whose profiles had been accessed by Mr. Wilson (the “Notice Group”). Over 130 individuals from the Notice Group have since informed the BNS that they have been victims of identity theft or fraud. The BNS compensated those individuals for their financial losses and offered each individual in the Notice Group a complimentary subscription to credit monitoring and identity-theft protection service.

In spite of these efforts, the BNS, in addition to Mr. Wilson, was named as a defendant in a class action, with the class being the entire Notice Group. The Ontario Superior Court certified the Notice Group’s class action for, inter alia, the BNS’ vicarious liability for intrusion upon seclusion.

Vicarious Liability and Intrusion Upon Seclusion

The Ontario Superior Court relied on the Supreme Court of Canada’s decision Bazley v Curry, [1999] SCR 534 (“Bazley”) for the rationale to impose vicarious liability on an employer. In Bazley, McLaughlin J (as she then was) stated:

The fundamental question is whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability…

In determining the sufficiency of the connection between the employer’s creation or enhancement of the risk and the wrong complained of, subsidiary factors may be considered. These may vary with the nature of the case. When related to intentional torts, the relevant factors may include, but are not limited to, the following:

    1.  the opportunity that the enterprise afforded the employee to abuse his or her power;
    2.  the extent to which the wrongful act may have furthered the employer’s aims (and hence be more likely to have been committed by the employee);
    3.  the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer’s enterprise;
    4.  the extent of power conferred on the employee in relation to the victim;
    5.  the vulnerability of potential victims to wrongful exercise of the employee’s power.

[Emphasis in original]

The Ontario Superior Court further specified that “vicarious liability ‘is strict, and does not require any misconduct on the part of the person who is subject to it’: Straus Estate v Decaire, 2011 ONSC 1157, 84 C.C.L.T. (3d) 141 at para. 49.”

Applying this legal test to the conduct of the BNS, the Court found that, at least to the extent required to certify the class action, the BNS had enabled Mr. Wilson to commit the tort of intrusion upon seclusion:

[BNS] created the opportunity for Wilson to abuse his power by allowing him to have unsupervised access to customer’s private information without installing any monitoring system… Wilson was given complete power in relation to the victims’ (customers) confidential information, because of his unsupervised access to their confidential information. Bank customers are entirely vulnerable to an employee releasing their confidential information. Finally, there is a significant connection between the risk created by the employer in this situation and the wrongful conduct of the employee.

Furthermore, the Court’s decision to certify the class action for the tort of intrusion upon seclusion was not influenced by the BNS’ admission of responsibility to compensate the Notice Group for any financial losses. The BNS submitted that it accepted liability for the pecuniary losses of the individuals, as evidenced by the BNS’ willingness to financially compensate the members of the Notice Group that came forward as being victims of fraud. The Court refused to accept the BNS’ argument that it was not liable for further damages through vicarious liability for the tort of intrusion upon seclusion. Conversely, the Court distinguished the two types of damages and stated that the BNS’ “admission of responsibility to pay for the pecuniary damages suffered is a different situation from the absence of claim for compensatory damages”.

COMMENTS

Jones and Evans raise a number of thought-provoking issues for employers to consider, and the ramifications of the two cases extend well beyond Ontario.

Though it has yet to proceed to trial, Evans clearly brings to light the necessity of employers to keep up with the demands of privacy law. Employers who are neglectful in this regard may be held liable for not only the pecuniary damages associated with illegitimate access or use of private information, but also the moral or compensatory damages that may flow from a successful claim of vicariously liability for intrusion upon seclusion or applicable statutory causes of action for invasion of privacy.

In an increasingly technological world, employers have the responsibility to adequately supervise employees in their access to confidential or private information when such access is granted by virtue of employment. To this end, employers should have up-to-date privacy policies in place and ensure that employees are aware of what constitutes unauthorized access or use of private information. Employers should take active measures to ensure that these policies are implemented and followed, and it is recommended that the policies include mechanisms to monitor employee access to private information in order to identify potential abuse. Being proactive and having effective policies in place may assist employers in decreasing liability in the event that a claim of vicarious liability for an invasion of privacy is brought against the employer, or, in any event, may reduce the number and severity of potential claims by exposing unauthorized access sooner rather than later.

In addition, while the courts in British Columbia are not bound by the decisions of Ontario courts, the decision of the Ontario Court of Appeal in Jones and that of the Ontario Superior Court in Evans may still be relied upon as persuasive authority. In particular, the two decisions may be used to delineate the scope of privacy protection afforded in other jurisdictions, including provinces with general privacy legislation, since “privacy” is not defined in the statutes.

Moreover, Jones is a well-reasoned decision with an extensive overview of the relevant jurisprudence, legislation and authoritative academic literature on the tort of invasion of privacy. The Ontario Court of Appeal took judicial notice of the role of technological change and the growing threat it poses for privacy, making a highly persuasive case for other courts to “develop the common law in a manner consistent with changing society”.

Finally, the tort of intrusion upon seclusion may affect individuals outside of Ontario even before a decision is made to import the new cause of action to other jurisdictions. The Notice Group in Evans includes individuals who are residents of British Columbia and New Brunswick. The BNS attempted to argue that as against those 35 individuals, the claim of vicarious liability for intrusion upon seclusion could not disclose a reasonable cause of action, since the two jurisdictions have not yet recognized the tort.

The Ontario Superior Court chose not to preclude these individuals from utilizing the cause of action and instead commented that “[w]hile the Courts in British Columbia and New Brunswick have not as of yet recognized the tort of intrusion upon seclusion, I was not given caselaw to suggest that they have definitively shut the door on this cause of action.” In the end, the courts of British Columbia may decide to open the door to intrusion upon seclusion, and employers should be prepared for if, and when, they do.


[1] William Prosser, Law of Torts, 4th ed. (West Publishing Company, 1971) at p. 389:

  1. Intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs.
  2. Public disclosure of embarrassing private facts about the plaintiff.
  3. Publicity which places the plaintiff in a false light in the public eye.
  4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.

 

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Herb Silber
Tuesday, March 18th, 2014    Posted by Herb Silber (posts)
Herb Silber
Herb Silber brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

This is the third and final installment in the series on the topic of how arbitrations can be made more cost effective and efficient. The previous two articles considered strategies that could be deployed at the time the arbitration clause is negotiated and inserted in an agreement and at the time the dispute arises.

The biggest difference in the strategies during the arbitration itself is that this is the forum in which the Arbitration Panel has the most active role. At this stage the parties will have agreed, or will have been guided by the Arbitration Panel, as to the shape of the process and rules that will inform the Arbitration, so it leaves the greatest scope for the Arbitration Panel to exercise their discretion to assist in making the arbitration both cost effective and efficient. The Panel can, by their skill and creativity be part of a solution, or conversely, be part of the problem. The overarching principle that arbitrations are governed by can be found in Rule 19 (or a variation thereof) of the Rules of the BC International Domestic Arbitration Centre (BCICAC) which states:

  1. Subject to these Rules, the arbitration tribunal may conduct the arbitration in the manner it considers appropriate but each party shall be treated fairly and shall be given full opportunity to present its case.
  2. The arbitration tribunal shall strive to achieve a just, speedy and economical determination of the proceeding on its merits.

 

It is important for both Counsel and the Arbitration Panel to always be mindful of this rule when they are considering how the Arbitration will be conducted, both prior to the Hearing and at the Hearing. Rule 19 provides a balance between equity and efficiency, so that while each party must be treated fairly, they must also recognize that the arbitration process does not guarantee perfect justice.

Rule 19 gives the Arbitration Panel the discretion in the procedure to use in adopting its decisions. As an example, there is Authority to support the proposition that the Courts should not review an interlocutory ruling (not being an “award”). However, given that Arbitration is built on a consensual process, the experienced Arbitration Panel, should always try to encourage the parties to come to or build a consensus as to how the arbitration should proceed. The ability to do this separates the good arbitrators, who will be sought out, from others who do not have this mindset or skill.

Some ideas that should be considered by the Arbitration Panel, with the participation of the parties, would include the use of written submissions wherever possible, including having the Hearing done by way of a written hearing. This could be particularly useful if the facts are really not in dispute and could certainly result in a saving of time and costs. Other ways to make the Arbitration more cost effective may be to carefully consider, what if any cross examination may be needed and should there be time limits on it. Where expert witnesses are retained by both parties, should they meet and try to provide a “joint report identifying those matters which are not in dispute and those which are in dispute.”[1]

The ideas presented in the previous paragraphs are but a few that could be considered by the Arbitration Panel, working in conjunction with the parties to ensure that the Arbitration is cost effective and efficient, while still maintaining the important touchstone of “fairness”.

[1] Rule 27(3) BCICAC Rules

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Posted by Herb Silber (posts) | Filed under Litigation and ADR | ....
Herb Silber
Thursday, January 2nd, 2014    Posted by Herb Silber (posts)
Herb Silber
Herb Silber brings a strong combination of experience, knowledge and empathy to the arbitration process as Arbitrator or Counsel. Herb’s approach creates the positive, respectful atmosphere critical to a successful arbitration process.

In my last article I looked at what could be done at the time the arbitration clause is negotiated to advance the efficiency and cost effectiveness of the Arbitration. How that process ends up will be a harbinger as to what can or cannot be done at the next stage, when the dispute arises.

Regardless, what is first necessary for one to do is to carefully read the Arbitration Clause and the Agreement it is found in to ensure that there are no false steps. One of the surest ways to protract the arbitration is to give fodder to the other side, should the party seeking to invoke arbitration makes a misstep. Some points to consider, therefore, to avoid this occurring are to identify if there are any limitations to be found in the agreement to permit the arbitration of the specific dispute. If there are, have “they passed” or do they need to be addressed? Has the dispute that has arisen such that it can be arbitrated? It may be for instance that the dispute is not yet “ripe.” Absent a” dispute” as contemplated by the Agreement containing the Arbitration Clause, there is nothing to arbitrate.

One consideration in British Columbia is whether to engage the BC International Domestic Commercial Arbitration Centre (BCICAC) to administer the Dispute, assuming they are not designated to do so in the Agreement under scrutiny. In the context of the objective that this article is addressing the benefit of having the BCICAC administer the Arbitration is to put time limits on the process as a starting point. As an example, Section 12 of the BCICAC Rules set out a time table for the appointment of an arbitrator after the Arbitration is deemed to have commenced (the filing of the Submission to Arbitrate with BCICAC along with the commencement fee). If the parties cannot agree on the appointment of an arbitrator within the time limits, one of the parties may request that the BCICAC appoint the arbitrator. There are similar default provisions in favour of the BCICAC if it is a three person arbitration panel to be appointed.

In my earlier articles I have written about the consideration of proceeding to mediation of a dispute before an arbitration could be sought. The challenge with that, as I have noted, is that if a provision to force the parties to choose that route is absent from the arbitration clause in the Agreement, then there is no mechanism to force the recalcitrant party to follow this path. That said, one option that might be considered to encourage the recalcitrant party to accept mediation is to hold over them the spectre of being penalized in costs. Rule 30 of the BCICAC Rules permits a party to make a Settlement Offer that the Arbitrator can consider, if it is rejected by the other side, when it comes to deciding issues of costs. I see no reason why a “settlement offer” by one party asking that the other refer the dispute to mediation before arbitration, once rejected, could not be a consideration by an arbitrator when it comes to deciding costs of the Arbitration. The BCICAC Rules gives the Arbitration Panel a wide discretion in deciding costs at the conclusion of the Arbitration.

Posted by Herb Silber (posts) | Filed under Litigation and ADR | ....