Herb Silber, Q.C.
Friday, January 18th, 2019    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC 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.

There is often a misconception about the role of the arbitrator appointed to an arbitration panel by one of the parties. Where there is a three person panel called for under an Arbitration Agreement, most often the two arbitrators appointed by the opposite parties appoint the third arbitrator, who will act as the Chair.

The misconception arises as to whom the “loyalty” of an arbitrator appointed by a party lies- to-the party appointing, or the process. The answer clearly under Canadian law is the latter-the process. All of the appointed arbitrators, regardless of who appoints them, owe a duty of impartiality to all of the parties’ He or she must be not only be unbiased, but must be seen to be unbiased. The Arbitration Panel being seen as a mirror of a judicial process requires the same degree of independence and impartiality as one would expect of a judge.

In a recent decision of the BC Court of Appeal, Hunt v, The Owners of Strata Plan LMS25561 it was determined that an ex parte communication (i.e. an undisclosed communication made in the absence of the other party) between a party and its appointee that did not go to the merits of the case, but merely a strategic consideration, was sufficient to give rise to a reasonable apprehension of bias resulting in the quashing of the arbitration award. The premise of this is that both evidence and representations (which this communication fell into) are not permissible. “Whoever is to adjudicate must not hear evidence or receive representations from one side behind the back of the other…”2

It has been a long held belief that the arbitrator appointed by a party, while required to be unbiased and impartial, can still be predisposed to the perspective of the party who appointed them. As an example, on a lease rent renewal, one would expect the Landlord to appoint an arbitrator who has a history of being more sympathetic to Landlords. The conventional wisdom is that there is nothing wrong with that per se, so along as the appointee is not an advocate or partisan for the party appointing that person. They can seek to explain their understanding of the position advanced by the party appointing them, but must not compromise their independence, even if it means coming to a conclusion that does not advance the interests of the party appointing them. The Hunt case makes it clear that the person appointed as an “arbitrator” is not the “nominee” of the person appointing them. The duty of arbitrators once appointed is not to act as advocates but as ‘free, independent and impartial minds.’”3

In the result it can be a very tricky path to navigate when dealing with an arbitrator appointed by a party. Given the admonitions from the Hunt case and the major consequences for going “offside”, it is the course of prudence once the appointment has occurred to deal with that person no differently than one would with a sole arbitrator appointed by both parties or a judge. Communications on an ex parte basis of a strictly procedural nature may be permissible but anything beyond that is perilous.
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1 Hunt v. The Owners, Strata Plan LMS 2556, 2018 BCCA 159
2 Hunt, supra, at para. 87, p. 18
3 Hunt, supra, at para. 115, p. 22

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Herb Silber, Q.C.
Monday, March 6th, 2017    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC 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.

Typically the format of a mediation hearing involves the following stages:

  1. The parties meet in a plenary session with the mediator to set the stage for the mediation. This provides the forum where the parties can state their positions.
  2. The mediator caucuses with each party. These sessions are confidential save to the extent the mediator is authorized to take information to the other party.
  3. After one of more of these sessions, a point will come where the parties will either reach a settlement or find they are unable to do so.
  4. If a settlement is reached it is documented; if not, some mediators, including myself, have expressed a willingness to remain involved to facilitate ongoing discussions between the parties which may lead to a settlement.

Even an unsuccessful mediation can bear fruit. It can clarify and narrow the issues which can bring about a settlement at a later stage. That said, the optimum is to encourage a settlement if one is to be had on the day set aside for the mediation. The parties are most invested in trying to reach a settlement then. They have set aside the time and each has usually approached the Mediation with an optimism that a settlement is possible, albeit on terms they see most advantageous to themselves.

With that in mind, mediators look to try to bridge any gap that exists. An activist mediator will try to achieve this through a mix of encouraging the parties to try harder, utilizing one’s realistic or practical advice, commercial perspective and the use of other skills. Some may suggest a med-arb approach whereby the mediator makes a written determination of the outcome and places it in sealed envelope only to be opened at the end of the mediation if there is no settlement. That is a risky business but if the parties buy into it they will be encouraged to moderate their positions so they achieve a collaborative solution rather than one that will have been imposed.

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Jeremy R. Costin
Thursday, July 28th, 2016    Posted by Jeremy R. Costin (posts)

An unintended consequence of British Columbia’s revised legislation on wills and estates is the possibility that a gift to someone may be inadvertently doubled.

The Wills, Estates and Succession Act (WESA), section 6, provides that where a gift in a will is contingent on the death of someone else, that gift will take effect if it cannot be determined whether the latter person died before or after the person who made the will.

While in most circumstances, this makes it easier to deal with contingent gifts, there is one situation that becomes more complicated.

Consider a will that directs the executor to “give all to my spouse, but in the event my spouse dies before me, give $25,000 to my nephew Horatio and divide the rest equally between my children.”

If both spouses have included that clause in their wills and they die in a situation where the sequence of their deaths cannot be determined, Horatio will receive $50,000.  Most likely, the intention was for Horatio to receive $25,000 on the death of the second spouse to die.

It was suggested at a recent conference that this can be remedied in two ways:

Suggested remedy 1:  If you state the intention that the gift is to be given only once, that ought to be sufficient.

It is not.  The substance of such a provision would be to ask that another person’s will be changed, which is of course not permitted by law.

Suggested remedy 2:  Since the WESA now allows a judge to fix an imperfect will, you can rely on a judge ensuring the gift is not duplicated.

A will is far too important a document to leave to chance.  Hoping that a judge will know what you wanted and then fix it accordingly is a far riskier proposition than spending a bit of extra time to make it crystal clear.

Further, even if you state the intention in both wills that the gift is to be given once, and even if a judge tries to rectify the wills to accommodate this intention, it still remains unclear whose estate should give the gift.

If there are other beneficiaries whose gifts would be affected, especially if the distributions are not identical in the wills, how should the judge determine which person’s beneficiaries will bear the brunt of the gift?  Given such a scenario, a judge might be inclined to remove the entire provision due to lack of certainty; or if inclined to keep the provision, the judge would have to engage in a significant review of the facts of the estate – at significant cost and headache – to remedy an uncertainty which could easily have been avoided at the time the will was drafted.

Solution:

If the legislation creates a window for an unintended result, efforts should be made to draft around the potential problem.  My approach is as follows:

First, I make the gift using language that includes both the intention and a term for which we will make our own definition, “Single-Non-Duplicated Gift.”

If my Spouse does not survive me for 30 days, my Executor shall give to my nephew, Horatio Doe, presently of Fort Elsinore, BC, a Single, Non-Duplicated Gift of $25,000.

We create a term, “Single, Non-Duplicated Gift.”  This term shows our intention clearly (that the gift be given only once); it also tells us that it’s a defined term and that there will be a definition of it elsewhere in the will.  That definition will include the specifics of how to make the gift only once, even if we can’t tell who died first.

The definition of “Single, Non-Duplicated Gift” says that the gift is only made once in total, and it includes a clear mechanism for figuring out which estate actually pays it.

The mechanism is as follows:  In each spouse’s will, the mechanism says that if the sequence of death cannot be determined, then Horatio is to get half of the gift under that will (because he’ll also get half from the other will).  It also says that if one estate falls short, the other estate will make up the difference.

Provided that both spouses include the whole “Single, Non-Duplicated Gift” definition and mechanism in their wills, Horatio will receive an inheritance equal to the amount intended, and not a double-gift.  Regardless of whether the spouses die simultaneously or one survives the other, Horatio’s gift remains the same.

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Herb Silber, Q.C.
Friday, May 6th, 2016    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC 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.

One issue that often bedevils a mediator is the role of legal counsel at the Mediation. The goal from the mediator’s perspective is to encourage the parties to find a settlement. A Mediation that does not arrive at a settlement, or does not at least set the stage for one by narrowing the dispute, must be considered a failure. Legal counsel may be part of the solution, but often times are part of the problem. Some litigation counsel are stuck in the belief that any concession by their client is a sign of weakness. Thus, if the dispute does not settle they and their client will be seen as weak. It is precisely because of this perception that counsel with this mindset ought to have the most invested in a successful process. The parties, with perhaps the exception of a mandatory mediation (even then it is not all that clear), are “at the table” to find a resolution for a variety of reasons; cost savings, husbanding of non-pecuniary resources, preserving of relationships, privacy and others. Counsel must identify with these goals and try to find a path to achieve them, not be imprisoned by their own ego because the resolution will necessarily be a collaborative effort, and not engineered by them. One way to get Counsel on board is to persuade them of the risk of not settling, not the reward of not doing so. This requires a mediator with experience; a strategic thinker and one with judgment who either has or can gain the confidence of all parties and their counsel.

 

The other challenge that I wish to address that often arises in mediation is where does the truth lies between the parties. This is where mediation and a trial or arbitration part company. Mediation is not a search for the truth like a trial. It is a search for a settlement. A skillful mediator must understand that and be able to subtly influence the parties so they are not invested in finding the truth, but rather in finding a resolution. The resolution may reflect, in some fashion, the respective versions of the truth, but that is not crucial. What it needs to reflect are the respective interests of the parties and how they have been able to rationalize those needs to achieve a settlement.

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Herb Silber, Q.C.
Tuesday, March 29th, 2016    Posted by Herb Silber, Q.C. (posts)
Herb Silber, Q.C.
Herb Silber, QC 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 post, I addressed the question of whether an Arbitrator should conduct his or her own independent research of the facts outside of the evidence presented by the Parties. Now I want to address the second part of that question which deals with legal research. Succinctly put, should an Arbitrator engage in his her own legal research independent of the submissions made by the Parties or their Counsel.

It is not unusual for a Judge to refer to cases that have not been cited by Counsel that may be recent expressions of cases well known and referred to by Counsel to support one side or the other. I see no harm in that. However, once an Arbitrator embarks on his or her own to engage in legal research on an issue not raised or focused upon by the parties I believe he or she is on shaky ground and may subject their Award to a finding of arbitral error.

Underlying all arbitrations is the right of each party to know the case it needs to meet. That is inherent in the concept of a fair hearing. So for an Arbitrator to venture out on his or her own to research a legal issue that the parties have not raised or may be peripheral to the case, arguably, would be manifestly unfair. The saving grace however could be if the Arbitrator raised the legal issue with the parties that is of concern and asked them to address it, rather than doing his or her own research. This would be consistent with the direction to the Arbitrator in BCICAC Rule 19 to make a determination of the case on its merits, but in doing so treating both parties fairly and giving each an opportunity to present their case. Moreover, Rule 33 of the BCICAC Rules makes it clear any award must be decided in accordance with the law, in the absence of agreement by the Parties to do otherwise.

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