Sloppy settlements
Why you should always read a settlement carefully. Plus conflicts for arbitrators, Aboriginal title vs. private interests, and all the latest legal news.
Dylan Gibbs
November 21, 2024
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PRESENTED BY |
Beware the never-ending sale this Black Friday. The Gap and Old Navy are getting sued in a proposed BC class action because they allegedly offer their sale prices far too often. According to the suit, if you’re not getting 40% off you’re overpaying. The Competition Bureau is investigating whether Leon’s and The Brick are using similar tactics to sell their mattresses and furniture.
May your holidays be merry and your shopping truly discounted.
— Dylan Gibbs
TODAY'S DOCKET |
Aboriginal title vs. private interests
Informed medical procedures
Repeat arbitration customers
SCC on human trafficking
Improvident bargains
Hallucination recaps
Trust in the courts
STAYING CURRENT 🗞️
Ejecting private landowners with Aboriginal title?
Wolastoqey Nations v. NB, 2024 NBKB 203
Justice Gregory made waves in New Brunswick with her comments on the effect of Aboriginal title on land owned by private parties. The Wolastoqey Nations are claiming title to more than half of New Brunswick. They sued the federal government, the provincial government, and several corporate landowners.
The corporations applied to remove themselves from the lawsuit, arguing that — even if the Aboriginal title claim is successful — it won’t affect their property rights.
They relied on the Chippewas of Sarnia, where the Ontario Court of Appeal refused to enforce Aboriginal title against private landowners based on equitable considerations.
Justice Gregory agreed to let the corporations out of the lawsuit, but not without commenting on the potential impact of a successful Aboriginal title claim.
Her comments included plenty of wiggle room. But the suggestion that a successful Aboriginal title claim might force the Crown to expropriate land from private parties is significant:
[It is] misconceived … to claim Aboriginal title directly against fee simple owners...
Aboriginal title, if declared, is declared … against the Crown… I acknowledge such a declaration impacts everyone, Crown and non-Crown, but the legal declaration itself is against the Crown only.
[But if the Aboriginal title claim succeeds, the Crown must negotiate with the Wolastoqey to reconcile the competing interests of private landowners. Otherwise,] the Crown may be directed or ordered to use its expropriation powers [to reclaim land from private owners].
Supreme Court weighs in on human trafficking
R. v. T.J.F., 2024 SCC 38
The Supreme Court of Canada’s latest decision looks at the offence of human trafficking, which all nine judges gave a broad reading. The main takeaway? Evidence of an abusive relationship can be used to establish that an accused influenced or directed a victim to exploit them. The relationship context isn’t bad character evidence, because it serves to prove the elements of human trafficking.
The Crown can establish the actus reus through evidence of regular violence and threats of violence by an accused towards a victim and, more generally, a violent relationship between the two, that prevents the victim’s movements because they are controlled, directed, or influenced.
[And t]he accused’s purpose to exploit or facilitate the exploitation of a victim, depending on the circumstances, can be inferred from a finding that the accused exploited the victim in the first place.
Justices Cote and Rowe split from the majority because they would have upheld the acquittal entered by the trial judge. In their view, even though the trial judge didn’t properly deal with the abusive relationship between the accused and the complainant, there was no reason to overturn his finding that the complainant lacked credibility.
Informed consent to medical procedures
Smartt v. Brar, 2024 ABCA 372
The Alberta Court of Appeal weighed in on the test to prove a medical malpractice claim based on a lack of informed consent.
Some courts have suggested plaintiffs need to testify to explain what they would have done differently if they were fully informed about a medical procedure. But that’s not the law in Alberta.
In this case, the doctor performed a forceps-assisted delivery on an expecting mother without explaining the risks or giving her a chance to opt for a c-section. The court had enough evidence to conclude that the plaintiff mother would have chosen the c-section, even though she didn’t state that expressly in her evidence.
[The plaintiff doesn’t need to testify] as to what they would have done if fully informed … to satisfy the [test for causation]. To the extent that [other decisions hold] otherwise, we respectfully disagree… [S]uch a requirement is inconsistent with the Supreme Court’s concerns about the frequently unreliable nature of that evidence and its often limited weight... The modified objective test incorporates a plaintiff’s subjective factors into the determination of what a reasonable person, properly informed, would have done, rather than necessarily requiring discrete subjective and objective inquires or a specific source of evidence.
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DECISION SPOTLIGHT 🔦
Too buddy-buddy with your arbitrator?
Aroma Franchise Company v. Aroma Espresso, 2024 ONCA 839
Here’s an important one for anyone involved in arbitrations.
If an arbitrator accepts more work from one of the lawyers involved in an ongoing arbitration, do they need to tell the other side? According to the Ontario Court of Appeal, simply working on two files with the same lawyer doesn’t give an appearance of bias — so arbitrators can keep that fact to themselves.
A bit of context: Two parties appointed an arbitrator to resolve their franchise dispute. Partway through, counsel for one of the parties gave the arbitrator repeat work — a different case for a different client covering different issues. No one mentioned the new mandate to the opposing party in the franchise dispute.
When the opposing party discovered the situation (after the arbitrator issued his final decision), they applied to set aside the arbitration award. They argued the lack of disclosure created a reasonable apprehension of bias.
The application judge accepted the argument and overturned the award — mainly because the parties had discussed the arbitrator’s appointment in advance. Emails between counsel showed they specifically chose an arbitrator they weren’t connected to. For the application judge, that made subsequent mandates an issue worth disclosing.
The Court of Appeal said the parties’ private discussion about their preferred arbitrator wasn’t relevant to the arbitrator’s disclosure obligation, because the test is objective. The arbitrator couldn’t account for preferences he didn’t know about.
Under the objective test, arbitrators just need to disclose circumstances that would give a fair-minded and informed observer justifiable doubts about the arbitrator’s impartiality. And there’s no reason to doubt an arbitrator’s impartiality simply because they accept more than one appointment from the same lawyer.
Multiple mandates only become an issue if the circumstances go further. Like an arbitrator being appointed four or more times by the same law firm in three years. Or an arbitrator working on disputes with overlapping parties and issues.
The Court was dealing with Ontario’s International Commercial Arbitration Act, but it seems like the same rationale would apply under most domestic arbitration statutes.
[T]he single appointment, by counsel for one party to an ongoing arbitration, of the same arbitrator for an unrelated arbitration, does not require disclosure. It is simply the appointment of a person required, and presumed, to be impartial in the ongoing arbitration for an unrelated dispute in which they are also required, and presumed, to be impartial. Viewed objectively, that circumstance would not be likely to give rise to justifiable doubts as to the arbitrator’s impartiality or independence.
Practice tip: If you’re concerned about your arbitrator working on other matters with opposing counsel — you should probably let them know in advance.
[The parties’] unshared correspondence and expectation could not form the basis for a reasonable apprehension of bias on his part that would not otherwise objectively arise.
A fair-minded and informed person would consider the facts and circumstances objectively known – they would focus on what the Arbitrator was told. What the parties chose … to keep to themselves falls into the category of subjective views.
BY THE NUMBERS
24: The number of North American lawyers and litigants who have relied on fake decisions dreamt up by generative AI. Well, it’s at least that many. US law professor Heidi Brown recapped the cases of which she’s aware and explained how courts have handled them.
18: The number of new Crown prosecutors Newfoundland and Labrador plans to hire following warnings about recent shortages. The new positions are part of a $24 million investment to improve access to justice and strengthen public trust.
9%: The proportion of surveyed Canadians who correctly identified the three Supreme Court of Canada justices hiding in a list of six names. A recent Angus Reid survey of 1,600 participants gives some insight into public confidence in the courts and awareness of how they operate. Most respondents think the SCC makes mostly impartial decisions — so we at least have that going for us.
0: Alberta’s target for at-fault motor vehicle lawsuits. Sources say the government is committed to a no-fault model and will soon introduce legislation to make the change.
THINGS NOT TO DO 😤
Don’t forfeit your client’s property.
Preston v. Cervus Equipment, 2024 ONCA 804
This recent employment case delivered bad news to an employee that might trickle down to their lawyer — a good reminder to read your settlement agreements carefully.
The employee sued for wrongful dismissal and eventually settled for around $100,000. He was only ever suing for his salary and bonus. But despite the narrow focus of the lawsuit, he signed a settlement agreement in which he agreed to forfeit shares the company had already awarded him (worth $75,949.81).
I further declare that I have no entitlement under or from, or any claim of any nature or kind against the Releasees in respect of, any bonus, share award, stock option, deferred share or similar incentive plan.
That made the settlement pretty much worthless.
The employee argued the settlement was never meant to capture matters outside the scope of the lawsuit. And the application judge agreed. But the Court of Appeal said the settlement was clear.
The Court wasn’t prepared to overturn the agreement simply because it was a bad bargain. And here’s the word of warning — the Court hinted that the employee should think about suing the lawyer who let him sign the settlement.
[It] has not been explained why [the employee agreed to the settlement] with the benefit of legal advice... We offer no comment regarding other legal remedies potentially available to him related to the legal advice he received.
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