National Post

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Tuesday, October 26, 1999

Resolve litigation through arbitration, not the courts
Adversarial legal system serves only to enrich lawyers
Diane Francis
Financial Post

"The first thing we do, let's kill all the lawyers" -- King Henry VI, by William Shakespeare.

Okay. Maybe I wouldn't go that far.

But there's something very wrong with the legal profession in Canada and, as a result, something very wrong with our so-called system of justice.

Everybody knows it. Everybody talks about it. But nothing gets done because our lives are also run by lawyers, who overwhelmingly populate political jobs in Canada.

There are too many lawyers and too many laws designed to accommodate and reward the profession.

Obscene fees are routinely charged without justification and lawyers pick nits, not only to defend their clients, but because nitpicking pays when you are paid by the hour.

This has been a pet peeve of mine and of most Canadians. That's why it is heartening to see several senior legal figures wade into this issue. Last week, Supreme Court Judge Ian Binnie swiped his profession by saying legal costs are so excessive in some cases the courts should curb them.

This matter is not even a public debate, but should be.

There is a solution which is not as draconian as Shakespeare's. But the lawyers won't like it because real change has to involve curbing their cosy, little labour monopoly. It would involve taking on some of the country's most powerful trade labour unions -- the bar associations.

The root of the problem is the adversarial nature of the legal system. Lawyers will argue that this is the cornerstone of our justice system -- a view that is unquestioned, despite evidence it's not necessary and is counter-productive to the main goal behind jurisprudence involving all civil disputes.

The reason why the adversarial system is not appropriate in business litigation or divorces or other such actions is that, by definition, the dispute is unresolvable by the parties involved. Lawsuits are the product of negotiations gone wrong or spurned.

Instead of sensibly addressing this issue, lawyers have been allowed to harness the profession's earning power by escalating unresolvable disputes. Obviously, this is a licence to print money until the clients win or lose or cannot afford to continue.

It's bad enough that society allows any group to feed off such misfortune. But that the profession itself has not seen the inherent conflict of interest is breathtaking.

The conflict is that the legal profession's current form of remuneration encourages the perpetuation and extension of the unresolvable by the irresolute. The more vindictive and the more unreasonable and the angrier the clients, the higher the fees.

Common joke is that divorce Canadian-style means that matrimonial assets are usually divided 50-50: 50% for the couple and 50% for their lawyers.

Corporations and business people face the same problem. If David is suing Goliath, then justice is impossible as Goliath will win by attrition as his legal gendarmes deploy the arsenal of stalling tactics allowed by the courts.

Even where protagonists are evenly matched dollar-wise, stalling and squabbling because procedures allow such nonsense end up making lawyers rich and clients clipped or abandoned.

Those without money go without justice.

The solution is to replace the time-honoured adversarial system with a simple process of binding arbitration.

This would mean judgments would be swiftly imposed upon the two parties after a brief hearing by an arbitrator.

The decision would be binding and the only appeal would be on a matter of law, in order to safeguard parties from inept arbitrators who don't know the law.

This would stop the practice of dragging cases on for years through lengthy hearings and motions, trials and appeals.

(The delays are ludicrous. As a recent witness in a 12-year-old lawsuit, my entire testimony consisted of explaining to the judge that I had absolutely little recollection of the tiny details sought from me because so much time had elapsed.)

Fixing our flawed legal system is important for all Canadians, even those who avoid litigation. We all pay for it because the costs are built into the prices of goods, services and taxes.

Just as it is self-evident that legal aid should exist for impoverished people facing criminal charges, it's imperative the civil system should permit everyone to afford their day in court.

In the United States, contingency fees have been their solution and are widely used. This allows clients to bring lawsuits forward without paying any legal fees. In return, their lawyers get a piece of the settlement, if any.

This is allowed in most provinces but rarely practiced. That's because the lawyers aren't stupid. In the absence of re-engineering the entire system itself into arbitration from adversarial, lawyers working on contingency fees could spend years and get nothing, so few volunteer to do so.

That tells you something.

There are two problems with contingency fees. They further complicate the current system and they also encourage frivolous lawsuits. The U.S. justice system is a laughingstock.

The seriousness of this issue has escaped our politicians because most are ranking members of the country's Legal Industry.

And the profession doesn't get it either. A spokesman for the Canadian Bar Association was recently quoted as saying that legal costs are fair, low-cost and determined by the market.

There's no "market" when it comes to legal costs in this country.

Lawyers have a total monopoly and keep out competitors by perpetuating and legislating a system that's conducted in a foreign language, understood only by them, and is cunningly complex in order to enrich their practitioners.

Copyright Southam Inc.