Reasonable Apprehension of Bias at FSCO: Yang and Co-Operators by Dagmara Mroczkowska

Jul 26, 2018

In the recent appeal decision Yang and Co-Operators (FSCO Appeal P17-00073, June 27, 2018), Director’s Delegate Edward Lee overturned the decision of Arbitrator Jeffrey Musson in which he declined to recuse or disqualify himself from further participation in the arbitration on the grounds that there had been a reasonable apprehension of bias on his part.

The appeal arose following a motion that was conducted by the Arbitrator by teleconference. Just prior to the commencement of the motion, the Claimant sent a CAT assessment report to the Insurer. At the motion, the Insurer stated that because of the receipt of this CAT report, it would require the Claimant to submit to two in-person assessments. This statement led to a discussion between the representatives of the Claimant and the Arbitrator about the proposed in-person assessments. The input by the Arbitrator on the question of in-person assessments led the Claimant to then bring a motion that the Arbitrator recuse himself from further involvement in this matter. The Arbitrator issued his order and reasons setting out why he refused to recuse himself from the hearing and other proceedings involving this file.

The issues dealt with on the appeal were: (a) Did the Arbitrator err in law by misapprehending and misapplying the test for showing that a reasonable apprehension of bias exists?; (b) Did the Arbitrator make overriding and palpable errors in misapprehending the facts to the issue of the recusal and ignoring affidavit evidence provided by the Claimant?; (c) Did the Arbitrator fail to provide intelligible reasons with respect to his statement that comments by him on the file “were taken beyond the context of the discussions,” without saying more? 

On the issue of misapprehending and misapplying the test for reasonable apprehension of bias, Delegate Lee applied the legal test set out by the Supreme Court in Wewaykum Indian Band v Canada: “There is no need to prove that an adjudicator is not acting in good faith, as the adjudicator may have been unconsciously biased. The question that needs to be asked is whether a reasonably informed person would apprehend that there was conscious or unconscious bias in the part of the arbitrator. Would a responsible person see justice as being done?”

Delegate Lee found that Arbitrator Musson misapplied the test in two ways. First, he erred when he rationalized his actions by reference to his “belief” that they would be “helpful” to the parties. This was a misapprehension of the Wewaykum test because the good faith of the decision maker is irrelevant to the determination as to whether a reasonable apprehension of bias exists. Further, he misapplied the test by justifying that he was trying to “guide the process” through his action. This was not the examination Arbitrator Musson was required to make under Wewaykum. These misapplications were errors of law.

On the issue intelligible reasons, Delegate Lee rejected the argument that there was no requirement for the Arbitrator to provide reasons because the order was an interim decision pursuant to section 16.1(3) of the Statutory Powers and Procedures Act. The provision only indicates that an interim order need not be accompanied by reasons, not that if reasons were issued, they are impervious to appellate scrutiny or judicial review. In this case, Delegate Lee found that the Arbitrator’s reasons were intelligible by simply stating that his comments were “taken out of context.”

On the issue of misapprehending the facts and ignoring affidavit evidence, Delegate Lee found that Arbitrator Musson erred in law by denying proof that he made submissions on behalf of the parties during the motion. The Arbitrator compounded the error by failing to address the evidence of uncontested affidavits that claimed he made submissions to the parties about the issue in dispute, and giving his own evidence denying what was in the affidavits. Reliance on a decision-maker’s own memory is limited to very specific circumstances outlined in Authorson v. Attorney General of Canada, in which, “transcripts are available or if counsel on both sides are in agreement as to what was said.” In this instance, there were two uncontested affidavits, and it was an error of law for the Arbitrator to merely apply his own memory without addressing the affidavits, and to merely “reason” that his comments had been “taken out of context.”

As a result, Delegate Lee quashed Arbitrator Musson’s order, sent the issue back to be determined by a different arbitrator, and ordered that Arbitrator Musson be recused from any further involvement in the file.

This is another good example of the challenges of dealing with the informality of some processes, where arbitrators play the role of decision maker and the role of conciliator interchangeably in the pre-hearing stage.  When a motion is brought before a pre-hearing arbitrator, that arbitrator has to be extra careful in not providing guidance, assistance or recommendations to either of the parties as part of his or her role as pre-hearing arbitrator might otherwise allow, if such actions could be viewed as portraying a bias to any rulings they are then required to make.  Alternatively, the pre-hearing arbitrator would be wise to refer the decision making process to someone else if they have indeed engaged in providing guidance, assistance or recommendations.  

Dagmara is a summer student at ZTGH and the author of this blog. If you have a question about this decision or a similar file, please contact Dagmara or Eric Grossman
 

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