B.C.’s New Arbitration Act

The Arbitration Act governs arbitrations in B.C. Arbitration is a private adversarial process for determining disputes instead of using the court. Arbitration is used where parties agree by contract or otherwise to submit disputes to arbitration, or are compelled to do so by statute.  The process results in a decision made by an arbitrator that is binding on the parties.  Arbitration is different from mediation, in which the parties seek to settle their dispute with the help of a mediator who cannot make a binding decision.

On March 5, 2020, the B.C. legislature passed Bill 7 into law. The bill replaces the Arbitration Act, RSBC 1996, c 55 (the “Old Act”) with a new Arbitration Act (the “New Act”), and makes consequential amendments to the Family Law Act, the Family Maintenance Enforcement Act, and the International Commercial Arbitration Act. The New Act will be brought into force by regulation on a date yet to be determined.

The following are some initial observations with respect to how Bill 7 will impact arbitration in B.C.

Application of the Arbitration Act

In terms of application, the New Act no longer applies to family law disputes as defined in the Family Law Act.  Instead, family law arbitration will be governed separately under a division added to Part 2 of the Family Law Act. The New Act continues to be inapplicable where the International Commercial Arbitration Act applies.

Commencement of Arbitration Proceedings

The New Act clarifies the ways in which arbitration can be commenced. If the arbitration agreement does not provide for the commencement of arbitral proceedings, a party may commence proceedings by delivering a notice to the other party that demands arbitration, appoints an arbitrator, or requests the other party’s participation in appointing an arbitrator. The party can also commence proceedings by delivering a notice to a person authorized under the arbitration agreement to appoint an arbitrator.

Powers and Duties of the Arbitrator and the Parties

The New Act also streamlines and expands the powers of the arbitrator. Examples include the power to decide all evidentiary matters without the restrictions of the Old Act, and a broadened power to establish procedures for the proceedings. The New Act also allows the arbitrator to choose the law applicable to the proceedings unless specified by the arbitration agreement. Moreover, while the Old Act required the arbitrator to consider only legal principles, the arbitrator must now consider any equitable rights or defenses available under the law they have selected.

The New Act also outlines the duties of the arbitrator and the parties respectively. The duties of the former include fair treatment of the parties, providing each party a reasonable opportunity to present its case, and achieving a just, speedy, and economical determination. The duties of the latter include doing all things necessary for a just, speedy, and economical determination, and not wilfully delaying or preventing the arbitration.

Applications and Appeals to the Courts

Under the Old Act, the Supreme Court was able to set aside an arbitral award if it had been “improperly procured” or was the result of an “arbitral error.” The New Act sets out more specific grounds that would allow the Supreme Court to set aside an award. These include the arbitration agreement being inoperative, the award dealing with a dispute not within the terms of the arbitration agreement, and justifiable doubts about the arbitrator’s impartiality. Outside of the listed circumstances, the Supreme Court does not have the power to set aside the award.

Appeals of arbitral decisions are still permitted on questions of law. A significant change is that appeals are now made directly to the Court of Appeal instead of to the Supreme Court.

Whereas the limitation period under the Old Act within which a party had to bring an appeal was 60 days, the New Act provides that the limitation period to bring or apply for an appeal is now 30 days from the date on which the award is made. The same limitation period applies to applications to set aside awards on procedural grounds.

These are just a few of the changes brought about by Bill 7. If you have any questions or concerns about the bill, David Garner, Judy Rost, or another member of our litigation team would be happy to assist you.

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