Saturday, November 20, 2010

New Rules of Court of Alberta stipulate "Mandatory" dispute settlement.

The Rules of Court which lay down the procedure to be followed in civil litigation in the Alberta, Canada have undergone a major overhaul after almost 40 years. Among other areas, one area which has been given great emphasis is “Mandatory” dispute resolution. The relevant Rules enlisting these changes are R. 4.16(1), R. 4.16(2) and R. 8.4.

R. 4.16(1) requires mandatory requirement of participation in good faith dispute resolution process before going ahead with the trial. The dispute resolution process could be of various types and may be either judicial dispute resolution or private mediation.

R. 4.16(2) entails various situations when these requirements can be waived. The situations are if: (a) the parties engaged in a dispute resolution process before filing the claim, (b) the nature of the claim is not one to likely result in agreement, (c) there is compelling reason why a process should not be attempted, or (d) the court is satisfied that the process would be futile. 

R. 8.4(3)(a) specifically provide that no trial date can be scheduled unless the parties have certified that they participated in a dispute resolution process.

A point of concern in this context may be: Is it correct to have an ADR process “mandatory” when the sole principle which guides it is “party autonomy”. This point was greatly debated in Indian context at the National Conference on Consultation Paper on Arbitration and Conciliation Act, 1996 organised by LCIA-India in collaboration with Ministry of Law and Justice, Department of Legal Affairs, Government of India earlier this year. In Indian context too, there is a possibility to include such a mandatory requirement in commercial cases above a certain monetary value ( which is supposed to be Rs. 5 Crores)but restricted to only arbitration. However, there was a great divide between two schools of thoughts at the conference where it was argued that it is not fair to have an “automatic opt-in” requirement of arbitration before going to a court. The Indian stand in the consultation paper seems to be still more liberal as it stipulates a situation whereby a party may “opt-out” (but that needs to be expressed, till then parties would deem to have agreed to arbitration) unlike the Alberta rules where it makes it mandatory and leaves no room for parties to opt out of such a requirement.

The new Rules of Court have come in to effect on November 1, 2010 and can be accessed here.

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