Editor: First, give us some background on how you have been interfacing with the Canadian courts in your role at Fraser Milner Casgrain.
McDougall: I have practiced law for a long time and many of my friends are now on the various courts throughout Canada, from the Supreme Court of Canada on down. Most recently a fellow whom I roomed with when I was in law school was appointed the Chief Justice of Ontario. So I have a more than passing knowledge of how they see themselves within the fabric of the legal profession in Canada.
Editor: In Canada, are delays encountered because courtroom facilities are limited or judges are forced to carry too large a case load?
McDougall: That certainly was the case in the past, but I don't think that it is nearly as severe as it once was, largely because of the growth of various forms of ADR. Trial dates are longer than one would like, but that doesn't mean that you can't get things dealt with quickly if you are able to show cause for speedier resolution of disputes. I think this is true right across the country.
The longer a case is delayed, the more expensive it is, but on the other hand, the longer a case matures, up to a certain point, the more likely it is that you can get resolution short of trial.
Editor: Are there situations in Canada where a judge lacks a clerk or research facilities (computers and libraries) so that the judge can independently research the law or have a clerk assist?
McDougall: Our judges are all federally appointed, including the trial court judges in the provinces. As you know, our country has vast areas, some of which are highly urban and others distinctly rural. Facilities vary. Clerks are usually available with trial judges sharing clerks, and judges at the appellate court level and Supreme Court usually each having one or more clerks. Some cities and some jurisdictions have more resources available. Electronic technology is not for all since there is clearly a generation gap, but it is closing rapidly.
Editor: To what extent is merit a consideration in the selection of judges?
McDougall: It is totally merit based. While political considerations may enter the process subliminally, screenings are done by the Canadian Bar Association and other institutions which make recommendations to the federal government for their appointment. We have been lucky to get very skilled people appointed to the courts across the country. Editor: In the U.S. judicial salaries are quite low. There seems to be a trend toward having younger judges primarily drawn from prosecutor's offices, regulatory agencies and other public sector sources and fewer from the private sector. The result is a lack of diversity of backgrounds and fewer lawyers who are qualified or interested in handling business cases. Is this a situation you see in Canada?
McDougall: Dealing first with diversity, it is obviously desirable that you have a diverse judiciary, but never at the expense of quality. This is a balance which we try to achieve. Certainly we have diverse representations in our courts in terms of gender, race and ethnic background, but not at the expense of tokenism. With respect to the age of our judiciary, many recently appointed judges in our system are young, keeping in mind that they have, by law, at least ten years experience before they are eligible for appointment.
Editor: Do you have specialized courts for business cases which are referred to judges who are skilled in corporate law?
McDougall: There is an analog in Toronto and Vancouver to the commercial court in London that is called a commercial list. These courts hear complex business cases only - such things as bankruptcy and most recently, cases involving the freeze on asset-backed commercial paper. In Toronto, these are formal proceedings, whereas in Vancouver they are less formal. We will have judges who are capable of dealing with those kinds of problems. A counterpart in the U.S. is the Chancery Court in Delaware.
Editor: Are more experienced judges in Canada leaving to join law firms or pursue careers as arbitrators because of inadequate compensation?
McDougall: No. It is rare for judges to leave early. There is a point in their careers whereby they become "supernumeraries." They have very good pension benefits. At some point they may decide to work as arbitrators, but the truth of the matter is that it is increasingly recognized that ex-judges are not necessarily well suited to being arbitrators.
Editor: Why is that the case?
McDougall: In the simplest terms, if you are a trial judge representing the state, you have the state's interest as well as the litigator's interest as the driver for your behavior and how you deal with the interests of both. People in that role develop a certain approach as to how to handle things. Arbitration is a totally consensual process - there, the parties are the drivers. They are in control making it a bottom up process. Some former judges have a great deal of difficulty adjusting to that change.
Editor: Is there a process in Canada by which if a judge feels that arbitration would be more appropriate, the judge can recommend it rather than going to trial?
McDougall: I am not aware of any such process. Ultimately, every arbitration has a supervising court. I am not aware of any jurisdiction in which judges can require arbitration, which seems contradictory to what arbitration is because it is consensual. Judges can and do require mediation of various kinds as a condition of proceeding further with any lawsuit.
Editor: What are the levels of compensation (converted to dollars) of judges in Canada?
McDougall: Federal court judges at all levels are paid across the country at roughly $250,000 a year along with a very good pension. There is a big question here, as yet undecided, as to whether appellate judges should be paid more. In Canada, there are three divisions - the trial division, the appellate division and the Supreme Court of Canada. The federal courts in Canada are unlike the U.S. federal courts because constitutionally they are much more limited than U.S. courts. The federal court is a court of limited statutory jurisdiction, hearing largely claims like patents, trademarks, tax disputes and claims against the government. There are provincial courts, whose judges are also federally appointed, whose jurisdiction is limited to the bounds of the particular province or territory.
Editor: I understand that one of the attractions of UK courts in transnational cases, where you have a choice between New York, London and Toronto, London offers the benefit of not placing a great emphasis on discovery.
McDougall: Canadians are midway between the U.S. and the UK. The English discovery practices are what they are. Canadian jurisdictions allow for more discovery but nothing like the deposition practice in the U.S. The question is, of course, how important is discovery to the process and that is really an unknowable thing. It changes the process if you don't have it, but whether it renders the process more fair is anyone's guess.
Editor: To what extent has electronic discovery impacted Canada?
McDougall: The Canadians are as involved with the Sedona Principles as Americans are. Assembling documents has become a major part of our litigators' lives. The dollar expenditure is questionable in both the United States and Canada. I question where it ends. I do a lot of international arbitration, and as an arbitrator I note that tension between discovery, limited discovery and no discovery of documents and depositions is always present. I really do question how valuable it is. While our e-discovery is more limited, the cost/benefit is as questionable as in the U.S.
Editor: Is there any procedure designed to test the expertise of expert witnesses in Canada as we have under the Daubert rule in the U.S.?
McDougall: The question of expert opinion evidence and its value is certainly a very large and important question in Canada today. Judges have repeatedly expressed frustration at persons who are given the status of experts and therefore the privilege of expressing an opinion who are, in fact, only advocates.
Editor: Do you find that judges are subject to intimidation in terms of security in the court room?
McDougall: There is pretty elaborate security in all of the superior courts at present, much like you would experience getting on an airplane, because we have had some instances years ago with people coming in with guns and shooting people.
Editor: How does Canada compare as a jurisdiction for trying transnational cases? Do Canadian courts favor trying cases under Canadian law?
McDougall: The courts of New York, London or Toronto will apply the law that the parties choose regardless of the venue. It usually turns out that the differences in the laws of the various jurisdictions are easily dealt with, for when you drill down, they are not all that different. I am sitting here today doing an arbitration award, and I am applying New York law which I know very little about but I have had a good briefing from the various lawyers on the case. The major commercial centers like New York and London have to provide courts that can deal with disputes, and Toronto is a competitor in a sense, but it is well behind. Toronto is less expensive than either.
Editor: What role does your firm play in the total picture?
McDougall: Our firm is one of the national law firms that is spread across the country. We have a small office in New York but we are an international law firm engaged to a very large degree with a focus on cross-border and international law, but particularly cross-border since the bulk of Canadian commerce is based on trade with the United States.
Published April 1, 2008.
