As the COVID pandemic ravages the economy, new sources of business conflict have emerged. Disputes with shareholders, creditors, suppliers, customers and among directors are being provoked or exacerbated. In spite of the obstacles presented by social distancing, dispute resolution and judicial, arbitral and regulatory remedies continue to be available.
Parties can still seek assistance from the superior courts of Canada’s provinces and territories for urgent commercial disputes. Last week, for example, we were before the Commercial List of the Ontario Superior Court of Justice on a matter where several corporations were being threatened with insolvency. Hearings and cross-examinations took place virtually, with all materials filed electronically.
Courts across Canada have, to varying degrees, developed accommodations for parties in the circumstances of the pandemic. The accommodations include suspending usual procedural and filing deadlines and formalities, providing for electronic filing for court materials and offering telephone and videoconference hearings for urgent matters. Accommodations are also being made by the provincial courts of appeal, the Federal Court of Canada and the Supreme Court of Canada. The courts’ adaptations have evolved as judges, court staff and counsel across the country become more proficient at working remotely and continue to expand what technological solutions can be used, and we expect those adaptations to continue to evolve. (Parties should continue to consider what provisions of the Limitations Act or other statutory deadlines may apply in their circumstances.)
In addition to the courts, arbitration remains an attractive avenue for dispute resolution in the current circumstances. Even without a prior agreement to arbitrate, such as in standard arbitration clauses, with the consent of the parties arbitration can be employed at any time. Arbitration can provide greater flexibility in terms of procedure and logistics, with potentially greater availability for hearings, than the courts and there is no requirement that a matter only be heard if it meets the courts’ criteria of urgency. Arbitration facilities are supporting virtual hearings, or modified in-person hearings that provide for appropriate distancing.
Service providers to the dispute resolution process are also quickly adapting. Many court reporters, for instance, are facilitating the conduct of remote out-of-court examinations by videoconference.
Finally, securities commissions across Canada continue to operate, albeit under restricted and remote conditions. In urgent circumstances, cease trade and other normal securities commission orders may continue to be available.
Independent dispute resolution continues to be a powerful tool for directors as they adapt to the changing circumstances around us, and remains largely available and accessible.