The applicants’ employer unsuccessfully sought an Order removing the arbitrator of a constructive dismissal claim and declaring void an arbitration between the applicant and the respondent employee on the grounds of reasonable apprehension of bias. The allegation of reasonable apprehension of bias was based on a lawyer in the arbitrator’s law firm obtaining information from a client and writing a letter on his behalf to a subsidiary of the parent corporation of a party to the arbitration. No reasonable apprehension of bias was found and the application was characterized as an opportunistic attack on the arbitration and attempt to derail the arbitration. Costs on a partial indemnity scale were awarded to the respondent to sanction the applicants’ conduct.

Administrative law – Arbitration and award – Arbitrators – Judicial review – Reasonable apprehension of bias – Test

A.T. Kearney Ltd. v. Harrison, [2003] O.J. No. 438, Ontario Superior Court of Justice, February 10, 2003, Lax J.

Following a 26-day arbitration concerning a wrongful dismissal claim, the employer applied pursuant to the Arbitration Act, 1991 S.O. 1991, c.17 to remove the arbitrator and declare void the arbitration on the grounds of reasonable apprehension of bias. The employer was a subsidiary of Electronic Data Systems Corporation, a Delaware corporation (“EDS US”). Towards the end of the arbitration, the arbitrator’s law firm agreed to represent an employee in a wrongful dismissal action against EDS Canada, a subsidiary of EDS US. There was no evidence that EDS Canada had any relationship to the employer other than as a subsidiary of the same corporate parent. The arbitrator’s law firm sent a letter to EDS Canada asserting that the employee had been wrongfully dismissed and inviting discussion towards a resolution. The arbitrator subsequently advised counsel for the applicant and respondent, and the arbitrator’s law firm withdrew its representation of the client.

The test for reasonable apprehension of bias applies to arbitrators in the same manner as it applies to courts. The test is whether a reasonable and right-minded person, informed of all the circumstances, viewing the matter realistically and practically, and having thought the matter through, would conclude it was more likely than not that the arbitrator would not decide fairly (Committee for Justice and Liberty v. Canada (National Energy Board), [1978] 1 S.C.R. at 394-395 and subsequently adopted by the Supreme Court of Canada in R. v. R.D.S., [1997] 3 S.C.R. 484 at 530-531). The threshold for a finding of real or perceived bias is a high one since it calls into question both the personal integrity of the adjudicator and the integrity of the administration of justice. The grounds must be substantial and the onus is on the party seeking to disqualify to bring forward evidence to satisfy the test: R. v. R.D.S., supra.

The allegation of reasonable apprehension of bias in this case was based on a lawyer in the arbitrator’s law firm obtaining information from a client and writing a letter on his behalf to a subsidiary of the parent corporation of a party to the arbitration. The letter was nothing more than a standard opening communication in what appeared to be a “garden variety” wrongful dismissal claim.

This was not a case in which the arbitrator or his law firm acted as a solicitor for or against one of the parties to the arbitration. This was not a case where there was opportunity to acquire information that was capable of causing the arbitrator to be other than impartial in deciding the issues in the arbitration. This was not a case where the adjudicator could be seen to have a personal or pecuniary interest in the matter to be decided. Viewed objectively, an informed person, who considered the matter practically and realistically, could not conclude that it was probable that the arbitrator would not decide fairly.

Instead, in the Court’s view, this was an opportunistic attack on the arbitration. The employer could have immediately informed the arbitrator that they preferred his law firm not to act in the wrongful dismissal claim. Instead, they raised the challenge on questionable grounds and put a lengthy arbitration at risk. To the Court, it appeared to be a tactic to derail the arbitration and such tactics should be discouraged. As costs could be used to sanction conduct, an appropriate award was costs on a partial indemnity scale in the amount of $19,383.75. While the Court disapproved of the employer’s conduct, it fell short of the high test that would permit an award of costs on a substantial indemnity scale.

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