Justice and the pandemic: How Canada ranks

Friday, June 19, 2020 This article is the second of a three-part series examining our courts’ response to the pandemic and what it means for the future of the civil justice system.

What’s we’ve learned from the pandemic, in the justice system and elsewhere, is that we’re going to have to make do with less than perfect — perfect being the way we’ve always tried to do it. The question going forward, however, is whether and how we extrapolate and institutionalize the standards and processes that COVID-19 has forced on us.

Arguably, the biggest mistake we could make is to cling to the notions of perfection that have traditionally informed our justice system. The problem with the quest for perfection, arguably, is that it seeks to achieve a static goal dependent on the seeker’s immediate interpretation of the standard. By definition, unless perfect flexibility is the object, perfection is not flexible.

And so it is with our civil justice system.

“One of the key problems with our civil system is that we have traditionally interpreted the rules with the desire to achieve perfect justice in a procedural sense,” said Allison Speigel of Toronto commercial litigation boutique Speigel Nichols Fox LLP. “But that goal has not delivered civil justice to all those who want it — and if we can’t do that, tradition becomes largely irrelevant.”

By way of example, Speigel notes the tendency to seek and grant adjournments “because we believe parties should have every opportunity to put their whole case forward” and the “pushback” on resort to summary judgment procedures “because trial is the gold standard.”

“But if nobody can afford to go to trial, what’s the difference?” she asked. “What we have to appreciate is that most parties just want a resolution, and that rationalizing the failure to reach expeditious resolutions in the name of the way in which the process works doesn’t make anyone feel like justice is being done.”

And if no less august an institution than the World Bank is any indication, resolution is a long way from top of mind in our civil justice system. According to the Bank’s Doing Business 2020 study, it takes 910 days to enforce a contract in Canada. That’s more than twice the duration in the U.S. (444), the U.K. (437) and Australia (402).

What’s interesting is that it doesn’t necessarily cost more to speed things up. Enforcing a contract Down Under (arguably the country most comparable to Canada among the comparables we’ve chosen), eats up 23.2 per cent of claim value, virtually indistinguishable from the 22.3 per cent cost in Canada. Costs in the U.S. (30.5 per cent) are higher, but perhaps not by the margin that might be expected. The U.K. experience, however, where parties must spend 45.7 per cent of their claim value to enforce a contract, suggests there may be a price to pay to move things along.

Overall, Canada ranked a shameful 100 of the 190 countries that were part of the World Bank’s Enforcing Contracts indicator. The indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the extent to which nations have adopted practices that promote quality and efficiency in the court system.

“The historical gold standard of justice in this country must change,” Speigel said. “We’ve got to go beyond tinkering with the system, which amounts to putting a Band-Aid on a gunshot wound.”

What’s especially significant about the Enforcing Contracts indicator is that it is one of 10 indicators that the World Bank uses to compile its annual Doing Business 2020 study, a guide to the global business community that compares the ease of doing business in 190 countries from the perspective of regulatory constraints and the protection of property rights.

“The willingness to enter into contracts in Canada depends on the notion that the contracts can be enforced in a way that is not economically irrational, and that is something that underpins the strength of the economy,” Speigel said. “Speaking for myself, the only reason that I feel comfortable entering into a contract is because I can represent myself if necessary — otherwise I’d be petrified, because I couldn’t afford me.”

Canada comes in 23rd overall. Freed of our poor score on the Enforcing Contracts scale, one of 10 equally weighted factors that comprise the overall outcome, our ranking would have risen to 16th.

Comparisons to other democratic, developed countries are enlightening. The U.S., which stood sixth overall, was 17th in the Enforcing Contracts scale; the U.K., eighth overall, was 34th in Enforcing Contracts; and Australia, 14th overall, was sixth on the Enforcing Contracts measure.

In contrast, Canada stood seventh in the Protecting Minority Investors Table, tied with the U.K. The U.S. came in at 36th, with Australia at 57th. What appears is an inverse and perhaps not surprising correlation between the extent to which countries’ system protects minority investors and the time and cost required to resolve disputes. It’s not a stretch to think that the same correlation applies between protecting parties’ procedural rights generally and the efficacy with which contracts can be enforced.

Even more informing, perhaps, are the Resolving Insolvency results. Here, Canada ranks 13th, behind the U.S. (second) but ahead of the U.K. (14th)  — not to mention 87 places better than our ranking of 100 on the Enforcing Contracts scale. And what that tells us is that the model for improving our civil justice system is right in our own bailiwick, with the success of the Ontario Superior Court of Justice’s Commercial List, which shepherds most of the important corporate insolvencies in Canada (think Sears, Nortel, Eaton’s, Air Canada, etc.). The list is known for its no-nonsense, hard to adjourn, practical and resolution-oriented approach. It has a worldwide reputation as a jurisprudential model to be admired.

As it turns out, Geoffrey Morawetz, chief justice of the Ontario Superior Court of Justice since July 2019, was the team leader of the Commercial List from 2010 to 2013. When the pandemic broke out, Chief Justice Morawetz was one of the prime movers behind the Superior Court’s prompt and effective virtual response to the pandemic, which saw virtual hearings, discoveries, cross-examinations and digital filing and scheduling emerge as (more than) acceptable norms.

“Before COVID-19, change in the civil justice system was moving at a glacial pace,” said Chantelle Cseh, a partner in the dispute resolution, competition litigation and class actions practices at Davies Ward Phillips & Vineberg LLP’s office in Toronto. “Then, in a matter of weeks, we saw huge strides to adopt technologies that are moving things forward.”

Chief Justice Morawetz, who acknowledged in an e-mail response to questions that the pandemic “put a spotlight on the lack of technology that has plagued the SCJ for many years,” says the pace of change will be sustained.

“There are no prescribed timelines, but there is a shared commitment by me and the attorney general to bring meaningful and lasting changes for generations to come, as soon as possible,” he wrote. “It is my hope that this will be achieved in a matter of months, and not years.”

So, with any luck, we’re moving to the granular. But just what is that? For the answers, stayed tuned.

This is the second of a five-part series. Read part one: Justice and the pandemic: The new gold standard.

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