Unintended Consequences?

When I commented on the oral arguments in Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, the B.C. hearing fees case, I argued that although there was a good deal of support among the various parties and interveners for the proposition that it was section 96 of the Constitution Act, 1867, that rendered (excessive) court fees unconstitutional, this argument was problematic. Among other things, I worried that “[t]oo robust a view of s. 96 or of the principle of separation of powers would call … legislative efforts [to provide mechanisms of alternative dispute resolution, for instance, or even to encourage litigants to settle] into question.”

In the event, the Supreme Court decided the case on the basis of s. 96, holding that excessive fees were an interference with the “inherent jurisdiction” of superior courts. In criticizing that decision, I argued that “the fact that courts may have fewer litigants able or willing to go before them cannot, in itself, be an interference with their jurisdiction [because i]f it were, a great many rules encouraging litigants to settle their dispute or to use alternative dispute-resolution mechanisms would be unconstitutional too.” In a post published on À bon droit last week, Olga Redko expands on these concerns, arguing that

the majority’s opinion raises the concerning possibility that the Court’s new reading of section 96 in conjunction with the rule of law principle may be used to undermine existing provincial authority over access to alternative dispute resolution, and private international law more generally.

Ms. Redko worries that the principle set out in Trial Lawyers could be invoked by a party seeking to get out of an agreement to arbitrate or a choice of forum clause giving a foreign court jurisdiction over a dispute that might be subject to the jurisdiction of the courts of a Canadian province. As she points out,

[c]ontractual clauses sending parties to binding arbitration, or designating other provincial or state courts to resolve the dispute, clearly have the effect of denying a party the right to bring a case before the Quebec Superior Court. They arguably lead to the same result with which the Court is so concerned in Trial Lawyers Association, namely hampering the creation, maintenance, and interpretation of positive laws within the province [by its superior courts].

What is more, in Ms. Redko’s view, because of the problem of state action, the principle would not apply in the same way in the provinces where agreements to arbitrate and choice of forum clauses are enforceable pursuant to legislation and those where they are so at common law. Other rules whose effect is to limit access to courts may be called into question as well. Ms. Redko concludes that

[w]e must hope that, in light of the problems presented by such an expansive view of superior courts’ inherent jurisdiction, in future cases the Supreme Court will be very careful in broadening its interpretation of what constitutes an infringement of section 96.

I obviously agree with this conclusion. However, I am perhaps more confident than Ms. Redko that the potential problems which she and I have flagged will be avoided. The idea of state action, I believe, will actually play a constructive role in distinguishing those barriers to access to superior courts that contravene s. 96 and those that do not.

If I understand her correctly, Ms. Redko assumes that in future s. 96 cases, courts apply the rule from the Charter jurisprudence, which distinguishes common law rules from from legislated ones, the Charter only (directly) applying to the latter, and not the former. For my part, I see no reason for this belief. The rule that the Charter does not apply to private common law rules is grounded in the text of s. 32 of the Charter itself, and has nothing to do with s. 96. Although that case did not involve s. 96, in Canada (Attorney General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585, the Supreme Court showed that it is aware of the possibility that judicially-created rules will undermine access to justice. I trust that it would treat them in the same way as legislated rules in the context of future s. 96 litigation.

The way the idea of state action will impact such litigation is, I expect ― though perhaps I just hope ― will be to justify a distinction between barriers to access to superior courts created by the government itself ― whether by its legislative, its executive, or its judicial branch ― and those agreed to by the parties themselves. In light of the Supreme Court’s recent jurisprudence which, as Ms. Redko notes, “underscored the importance of respecting parties’ autonomy to select a mutually agreeable forum,”  I cannot believe that courts will treat choice of forum or arbitration clauses as equivalent to hearing fees. Courts will, I trust, recognize that rules of law that give effect to the parties’ intentions are different from those that hinder them.

I also think Ms. Redko somewhat misunderstands the concern of the Trial Lawyers majority with “the creation and maintenance of positive laws” (par. 40) by provincial superior courts. According to the majority,

In the context of legislation which effectively denies people the right to take their cases to court, concerns about the maintenance of the rule of law are not abstract or theoretical. If people cannot challenge government actions in court, individuals cannot hold the state to account ― the government will be, or be seen to be, above the law. If people cannot bring legitimate issues to court, the creation and maintenance of positive laws will be hampered, as laws will not be given effect.

In the context of this paragraph, and of the opinion more generally, I think that “cannot” must be understood as “are prevented by the state from.” The worry is not about the litigants who choose to take their cases elsewhere, but about those who are left with no choice.

But there is also an intermediate class of situations, where parties are given a choice to go to a superior court, but are “nudged” or pressured not to exercise it. I am thinking, in particular of rules designed to encourage parties to settle their disputes, for example by making a party that refuses a reasonable offer to settle responsible for costs even if it wins the case on the merits. This issue was raised at oral argument in Trial Lawyers, and it is true that an expansive reading of that decision might be used to argue for the invalidity of such rules, since both their purpose and, surely, their effect, is to make some litigants forgo trials. But somehow I rather doubt that the Supreme Court would accept such an application of Trial Lawyers.

That said, these are just my guesses. I could be wrong. And even if I am right, Ms. Redko’s important post certainly shows that the constitutional theory adopted by the majority in Trial Lawyers is poorly thought through. It is susceptible of interpretations that are both undesirable from a policy perspective and inconsistent with the Supreme Court’s own recent jurisprudence. The Court’s poor choice of theory may yet turn out to be inconsequential, but it is unfortunate all the same.

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