A recent BC Court of Appeal case considered the issue of reasonable apprehension of bias when arbitrators have private communications with only one party to the arbitration.
The Court of Appeal concluded that "by allowing [four]ex parte communications about the arbitration proceedings to take place .... the arbitrators placed themselves in an impossible position and undermined their appearance of neutrality." . The Court further noted that this case, and many such "disputes are initiated or defended by self-represented condominium owners. The lawyers acting on the opposite side or as arbitrators in such disputes are usually earning significant professional fees for their roles. It would not be unheard of for them to refer work to one another and to maintain collegial professional relationships. In such a context, the legal professionals involved must be especially vigilant to maintain appropriate professional distance in order to properly perform their roles."
The case provides important procedural and ethical lessons for our arbitration community. The decision further considered the question of whether or not the arbitrators had failed to meet their duty to advise the parties of the possibility of mediation. The Court defined the mediation option as "a chance to explore any misconceptions that the party initiating arbitration might have, to educate that party about the risks and costs implications, and, in a non-adversarial setting, to come up with solutions to alleviate the concerns that might be motivating the arbitration."
ADRIA Arbitrators and Mediators alike are encouraged to read the Court's ruling in detail.
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