1. BACKGROUND
The current initiative to implement a more systematic caseflow management
system and early dispute resolution process for the Expropriation Compensation
Board (the "Board") is reflective of a general trend which has developed within
the court system and among administrative tribunals in British Columbia and
elsewhere over the past several years.
1.1 Earlier Initiatives
As early as November, 1996, the then Attorney General of British Columbia
announced a plan of major reform of B.C.'s justice system including "increasing
use of alternate dispute resolution to assist people in resolving civil disputes
before they end up in the courts."
That announced plan flowed, in part at least, from the recommendations made
by the Systems of Civil Justice Task Force Report produced by the Canadian Bar
Association. The problem identified to the Task Force was that a high percentage
of settlements occurred very late in the litigation process and, therefore, did
not result in significant savings of time or money for the participants. Late
resolution had adverse effects, not only on the participants, but also on the
civil justice system as a whole. It was one recommendation of the Task Force
that every jurisdiction "make available as part of the civil justice system
opportunities for litigants to use non-binding dispute resolution processes as
early as possible in the litigation process and, at a minimum, at or shortly
after the closing of pleadings and again following completion of examinations
for discovery."
Both the Board and the British Columbia Expropriation Association (the
"Association") recognized at the time the possible advantages to be derived from
implementing changes within expropriation compensation proceedings both to
expedite the pre-hearing process and to encourage earlier dispute resolution.
A liaison committee of the Board and the Association in the nature of a
"rules committee" was created around that time. The minutes of one committee
meeting held in November, 1996 reflect agreement "that earlier and more
'interventionist' pre-hearing conferences would be of assistance in determining
claims before the Board in a more cost-effective manner" and that amendments to
the Board's Practice and Procedure Regulation should be explored. The
committee also discussed in some detail the desirability of incorporating some
type of mediation into the Board's process either on a voluntary or mandatory
basis.
In March, 1997, the chair of the Board addressed a meeting of the Association
on the subject of alternative dispute resolution. There were, he suggested, two
aspects to the problem then facing the Board which it was believed alternative
dispute resolution would help to address. First, many matters scheduled for
hearing before the Board settled very late in the process, strongly suggesting
that they could have been settled at an earlier date if the parties had been
required to turn their minds and efforts to resolution of the issues earlier.
Second, a significant number of matters which did proceed to hearing resulted in
little or no additional compensation being awarded. This signalled to the Board
that many such matters never should have reached the hearing stage and probably
could have been resolved earlier by having the parties squarely examine the
merits of their cases in advance.
Although members of the Board at the time were beginning to equip themselves
through mediation training to take on that additional role, and members of the
Association on the liaison committee volunteered to review possible revisions to
the Expropriation Act and the Practice and Procedure Regulation,
for a number of reasons this initiative did not go forward.
1.2 The Current Initiative
Since that time the impetus for change has come from two principal sources.
First, approximately two years ago, the members of the Board met to discuss
management issues and unanimously agreed that it would be desirable to move
forward with a combined case management and early dispute resolution initiative.
An ad hoc committee of the Board was struck to consider possible issues
around the design and implementation of this initiative, including any
legislative or regulatory amendments that might be necessary or desirable.
Members of the committee also held exploratory discussions with the Dispute
Resolution Office and Secretariat and with the Policy, Planning and Legislation
Division, both within the Ministry of Attorney General.
Second, the current initiative is an outgrowth of the Core Services Review
process undertaken in conjunction with the Administrative Justice Project
instituted by the present government during the summer and fall of 2001. The
Board undertook an internal review both of its mandate and its service delivery
for presentation to the Core Services Review Committee in November, 2001 and
February, 2002, respectively.
In general terms the Board envisioned its mandate as being to ensure
administrative fairness in determining compensation for owners whose lands had
been expropriated or injuriously affected. Fairness in this context implied:
- ready accessibility to the Board for the purpose of bringing a claim;
- adequate procedural mechanisms for ensuring that the parties are able to
obtain preliminary orders and directions from the Board in a timely way as
they prepare their cases for hearing;
- necessary and reasonable financial resources being made available to the
owner through the advance payment of costs regime to assist in what the Board
has recognized as the legislative intent to "level the playing field" as
between owners and expropriating authorities;
- the efficient scheduling of compensation hearings without significant
delay once the parties have indicated their readiness to proceed;
- the conduct of compensation hearings, open to the public, by an impartial
and expert panel of the Board in such a way as to afford the parties a full
opportunity to present their cases in accordance with rules of evidence and
civil procedure, flexibly applied; and
the timely rendering of decisions
by the Board after all the evidence and argument has been heard, with written
reasons which are at once complete, intelligible, internally consistent, and
consistent with established principles of law and valuation.
The Board also noted that one hiatus in its formal mandate to adjudicate
expropriation compensation disputes was its lack of statutory or regulatory
authorization to include a process for alternative dispute resolution, for
example, through mediation or case settlement conferences. There was evidence
from the experience of other tribunals which deal with land valuation issues,
such as the Property Assessment Appeal Board in British Columbia, and the
Ontario Municipal Board, of the benefit of such a process in reducing the number
of cases which actually proceed to hearing.
The Core Services Review Committee, in its report on mandate review released
on February 5, 2002, concluded that the Board continued to serve a compelling
public purpose in resolving disputes over the value of expropriated land.
However, the Board was to take steps to improve its efficiency, including the
introduction of "mediation and other forms of early dispute resolution to reduce
delays and provide more timely services to the public."
In addressing its organizational and service delivery model, the Board
perceived that it had successfully made use of its specialized expertise to
render thorough, well-reasoned and largely consistent decisions. It had also
shown itself to be flexible in such a way as to eliminate delay and backlog in
the scheduling of compensation hearings. By increasing the complement of
part-time members to hear matters, severing off threshold issues for preliminary
determination and resorting where possible to oral decisions, the Board in many
instances had been able to foreshorten the overall time required to resolve
issues before it.
However, the Board also acknowledged that a process which it calculated on
average required four years from the filing of the claim to the final
determination of compensation fell short of the ideal of efficiency. In the
Board's view there were several factors which contributed to slowing the pace of
the adjudicative or dispute resolution process. With reference to those issues
which now form the basis of the current initiative, these included:
- Adherence to a litigation model in which the pace of pre-hearing
preparation has been left largely to be determined by the parties themselves.
Although case management conferences initiated by the Board have aimed at
facilitating the pre-hearing process, they have tended not to be particularly
directive in moving the parties toward an early hearing of their dispute.
- Adherence to a service delivery model which, despite the large proportion
of cases that do settle late in the pre-hearing process, has been overly
focused on the Board's adjudication of the dispute rather than on its
facilitation of early dispute resolution through mediation or case settlement
conferences, with the potential efficiencies in time and costs and the overall
increased level of satisfaction for the parties that could result.
At the conclusion of its own service delivery review, the Board included the
following recommendations relevant to the current initiative:
- The Board will endeavour to expedite the pre-hearing process through
earlier, more rigorous and more directive case management.
- The Board will introduce early dispute resolution through mediation or
case settlement conferences into its process in order to reduce the number and
length of compensation hearings, save costs, and avoid inconvenience created
by late adjournments and settlements.
- The Board will pursue statutory and regulatory revision authorizing formal
case management and early dispute resolution processes.
- The Board will pursue statutory and regulatory revision enabling part-time
members to participate in the case management and early dispute resolution
processes, with the power to make binding orders or directions, and to
participate more fully in interlocutory decision making.
1.3 The BCEA/ECB Liaison Committee
On April 19, 2002, the chair of the Board wrote to the president of the
Association seeking the Association's participation in the design of case
management and alternative dispute resolution processes before the Board.
As a result a Liaison Committee consisting of six members of the Board and
six members of the Association was created. The president of the Association,
who was not formally a member of the Committee, also volunteered his
participation in some of the discussions.
The Liaison Committee as a whole
met in Vancouver on three occasions: June 25, August 19, and October 10, 2002.
Additionally, at the conclusion of the first meeting, three Subcommittees were
formed to undertake more intensive review of particular aspects of the
initiative and to report back to the Committee as a whole on their discussions
and any recommendations. The three Subcommittees were: (1) Case Management; (2)
Alternative Dispute Resolution; and (3) Tariff/Cost.
2. SUMMARY OF RECOMMENDATIONS
The following general recommendations proceed from discussion of design and
implementation issues around case management, alternative dispute resolution,
and their cost implications by the Liaison Committee as a whole following
consideration of the three Subcommittee preliminary reports. The recommendations
are set forth at this point for the purpose of encouraging further discussion
and input from the membership at large of the Association.
2.1 Case Management
- All cases which appear to be proceeding toward hearing would benefit from
a Board-directed and mandatory case management process. Case management
conferences would be mandatory at the instance of the Board or upon request of
one of the parties.
- The process would, however, be flexible, recognizing that larger and more
complicated matters are likely to require more intensive attention than
shorter, simpler matters and that some cases, such as those involving complex
business loss claims, may require a longer period of pre-hearing maturation in
order for proper loss estimates to be made.
- The Board would not intervene with case management too early in the
process. Normally, case management would not commence before the parties have
exchanged their pleadings (the Form A and the Form B). In most cases it would
begin at the point at which the parties seek to have the matter set down for
hearing.
- Earlier and binding deadlines would be established for key steps in the
pre-hearing process, particularly as to discovery and the exchange of expert
reports. An amendment would be required to the Practice and Procedure
Regulation to expand the timeframe which currently governs exchange of
expert reports under the Evidence Act.
- A mandatory pre-hearing conference would be held in every case
approximately 60 days before the hearing is scheduled to ensure that the
parties are or will be ready to proceed.
- The parties themselves, in addition to their legal counsel, would normally
be in attendance at case management conferences.
- Other Board members, in addition to the chair and vice chair, would be
authorized to conduct case management conferences and make binding orders and
directions.
2.2 Alternative Dispute Resolution
- The model that would best serve the needs and interests of the parties is
interest based mediation.
- Interest based mediation would be mandatory at the option of either party
or at the direction of the Board. However, Board sponsored mediation would not
be intended to supplant other efforts by the parties to settle the matter
themselves through negotiation or outside mediation.
- Alternatives to interest based mediation, such as a case settlement
conference or neutral evaluation conducted by the Board, would be made
available by agreement of the parties.
- The case management process would be used by the Board to determine the
desirability or timing of mediation or the timing of other early dispute
resolution processes in a particular case.
- Full provision would be made to protect the confidentiality of mediation
or other early dispute resolution processes.
- The person conducting the mediation or other early dispute resolution
process would either be a member of the Board or an outside appointee. Where
the person conducting the mediation is a member of the Board, the member would
not subsequently act as an adjudicator in the case.
- To ensure adequate preparation and facilitate effective mediation, the
parties would be required to deliver mediation briefs prior to meeting.
- The parties as well as their legal counsel or other professional advisors
would participate in the mediation or other early dispute resolution process.
2.3 Costs
Preparation for and attendance at mandatory case management conferences and
mediation or other case settlement conferences necessarily require that owners
will incur legal and other professional costs. The Tariff of Costs
Regulation would be amended to help indemnify the owner against such costs
and facilitate effective participation.
There are a variety of possible options for dealing with the costs of case
management and mediation under the Tariff, but having a range of units
per day, for example, between 1 and 5 units for case management and between 1
and 10 units for mediation, with units also provided for preparation, would
offer maximum flexibility. The Tariff currently provides for 15 units per
day up to a maximum of 60 units for negotiations leading to settlement, but only
if settlement is actually achieved.
To alleviate concern over the potential cost to both parties of mandatory
mediation, the rules might provide that mediation conferences would be set for a
period of only a half day or a full day, and that the parties would to have to
agree to continue mediation efforts beyond the initial time that had been
booked.
Costs would also be used as a mechanism of enforcement, to ensure attendance
at mandatory case management, mediation or other case settlement conferences,
and to encourage compliance with mandatory orders or directions of the
Board.
Amendments would be made to the costs provisions of the Expropriation
Act and the Tariff of Costs Regulation which adequately reflect the
cost consequences of either party's failure to attend or comply.
3. STATUTORY AND REGULATORY CHANGES
In consultation with the Liaison Committee, the Board will be working with
the Dispute Resolution Office and Secretariat and the Legislation Division of
the Ministry of Attorney General to finalize the design of its case management
and alternative dispute resolution processes, including necessary provisions as
to costs.
The intention is to go forward with required changes to the Expropriation
Act during the Spring 2003 Session of the Legislature. This, in turn, will
likely require that legislative amendments be clearly identified during the
month of November, 2002. Changes to the Practice and Procedure Regulation
and the Tariff of Costs Regulation are perhaps less time sensitive, but
the Board is hopeful that these amendments will also be finalized and proceed in
time to bring the current initiative into effect during the first half of
2003.
For discussion purposes only, an outline or draft of proposed changes to the
Expropriation Act follow:
1. To Broaden the Authority of Part Time Members
The proposed amendment would authorize the chair also to appoint a sole
member to hear any matter before the Board and would give the sole member, if
so appointed, the jurisdiction of the Board with respect to matters under the
Act that come before the member.
The policy objectives underlying the proposed amendment are:
- to facilitate the Board's current initiative to introduce early dispute
resolution into its processes by allowing a member to conduct case
management, mediation and case settlement conferences, with the power to
make binding orders and directions.
- To improve the timeliness of decision making processes by allowing, at
the chair's discretion, the wide range of interlocutory matters that often
precede a compensation hearing, and which presently can only be heard and
decided by the chair or the vice chair acting alone, also to be heard and
decided by other members of the Board acting alone.
2. To Authorize Rules for Case Management and ADR Processes
The proposed amendment would specifically authorize a change to the
Practice and Procedure Regulation to incorporate rules governing case
management, mediation, and settlement conferences, and to make attendance
mandatory.
3. To Broaden the Penalty Provisions under Section 47
An amendment would be sought to section 47 of the Act, headed "Interest
penalties for delay", to include costs as well as to address the consequences
of non-compliance.
4. To Make Cost Entitlement Subject to the Amended Section 47
An amendment would be sought to section 45(3) of the Act, which currently
provides for an expropriated owner's entitlement to costs subject to
subsections (4) to (6), to incorporate by reference the cost penalty provision
under section 47.
5. To Incorporate Penalty Costs under Section 45
An amendment would be sought to section 45 of the Act specifically
providing that failure to comply with orders or directions of the board
arising out of case management conferences could result in a non-complying
owner being deprived of costs or having to pay the costs of the expropriating
authority or a non-complying expropriating authority having to pay increased
costs to the owner in respect of preparation for and attendance at the case
management.
The Tariff of Costs Regulation would be correspondingly amended to
provide that the costs of the expropriating authority referred to in (6.1)(a)
are costs to be calculated in accordance with the Tariff.
6. To Make the Foregoing Amendment Applicable to Advance Costs
An amendment would be sought to section 48 of the Act, headed "Advance
payment of costs", to make section 45(6.1) applicable to a review of advance
costs.
7. To Address the Effect of Settlement on Entitlement to Costs and Additional Interest
An amendment would be sought to section 45(4) to avoid the circumstance
where settlement of an issue might lead to a calculation which deprives the
owner of automatic entitlement to costs.
A similar amendment would be sought to section 46(4) with respect to the
calculation of additional interest.
Dated: November 7, 2002
