Avoiding Bias and Remaining Impartial: A (Preliminary) Guide for Construction Adjudicators

Despite the adjudication provisions under the Construction Act, R.S.O. 1990, c. C.30 (the “Act”) having been in force for over a year now, the Divisional Court has yet to release a decision considering an application for judicial review made under Section 13.18(1) of the Act. This is unsurprising, given the disruptive effect that the current pan­demic has had on our judicial system. Nevertheless, while setting aside a determination will almost certainly be the exception and not the rule, we may start seeing in the coming years some decisions from the Divisional Court that consider the limits to the broad and flexible powers granted to adjudi­cators under the Act.

Section 13.18(5) enumerates seven grounds upon which an adjudica­tor’s determination may be set aside, including:^[1]

1. The applicant participated in the adjudication while under a legal incapacity;
2. The contract or subcontract is invalid or has ceased to exist;
3. The determination was of a matter that may not be the subject of adjudication under [the Act’s adjudication provi­sions], or of a matter entirely unrelated to the subject of the adjudication;
4. The adjudication was conducted by someone other than an adjudicator;
5. The procedures followed in the adjudication did not accord with the procedures to which the adjudication was subject under [the Act’s adjudication provisions], and the failure to accord prejudiced the applicant’s right to a fair adjudication;
6. There is a reasonable apprehension of bias on the part of the adjudicator; and
7. The determination was made as a result of fraud.

One ground that may have an interesting application in the construction adjudication context, and thus worth some discussion, is “a reasonable apprehension of bias on the part of the adjudicator.” This is not to say that the other grounds do not raise important questions. For example, at what point does an adjudicator seeking assistance amount to the adjudication no longer being conducted by the adjudicator at all?^[2] However, it is a reasonable apprehension of bias that adjudicators must be especially careful of, in light of their broad and flexible powers under the Act (and the Act’s encouragement of adjudicators to make use of them),^[3] as well as the intimate nature of the construction industry and the construction law bar.

So what is “a reasonable apprehen­sion of bias” and how will it be inter­preted under the Act? On its surface, there is an inextricable connection between “a reasonable apprehension of bias” (also known as “disqualifying bias”) and conflicts of interest,^[4] and there are a number of great resources from, for example, the arbitration context that adjudicators may turn to for guidance.^[5] However, as will be discussed below, this guidance will ultimately have its limitations, as adjudicators have a unique func­tion that distinguishes them from judges, arbitrators and other decision makers exercising statutory powers of decision. This unique function may result in a unique interpretation of “a reasonable apprehension of bias” within the construction adjudication context.

Moreover, conflicts of interest are only one piece (albeit a big piece) of the reasonable apprehension of bias puzzle. For a more in depth understanding, adjudicators may turn to existing case law for guidance, with the same aforesaid caveat, as “a reasonable apprehension of bias” has a long tradition of interpretation in the wider legal context, with origins in English common law.^[6]

In the Canadian context, an early example of its interpretation comes from the 1895 Ontario Court of Appeal decision of R. v. Steele,^[7] which quashed a conviction made by a decision maker whose father was the complainant. On appeal, the defendant argued that his conviction should be quashed because the nature of the relationship between the decision maker and the complainant gave rise to disqualifying bias. That is, by the very nature of the relationship, the decision maker likely had an interest in the result of the decision.

The Court of Appeal agreed with the defendant and importantly held that a party need not prove that the decision maker was actually biased in order to be disqualified. Rather, it is sufficient for the party to establish that it is more likely than not the decision maker would be biased in favour of one of the parties:^[8]

27 The principle to be deduced from these cases is, I think, that if a state of things exists, whether arising from re­lationship to the parties to the litigation or from other causes, which is likely to create a bias, even though it be an uncon­scious one, in the magistrate, in favour of one of the parties, or, as put by Mr. Justice Wills in the Huggins case, which caus­es a “reasonable apprehension of bias” — that is sufficient to prevent his adjudication upon the matters in controversy be­ing upheld, if it be impeached by a party who either had no knowledge of the existence of that state of things, or, knowing of it, objected to the magistrate acting; and in dealing with this question, which is one of fact, regard must be had to the prin­ciple upon which the rule is founded, that it is of the high­est importance, in the general interests of justice, to keep its administration by magistrates clear from all suspicion of un­fairness. I paraphrase here the language of Mr. Justice Wills, which is, if I may be permitted to say so, a clear and satisfac­tory exposition of the rule in question, and of the principle which underlies it.

28 In reaching this conclu­sion, I do not overlook the fact that it is not sufficient that there be a mere possibility of bias, as was said in several of the cases to which I have referred. That is quite true; and, on the other hand, it is not necessary that there should be real bias proved — it is sufficient if there be a likelihood of real bias or a reasonable apprehension of bias.

The question of a reasonable ap­prehension of bias is accordingly a question of perception that is ancillary to the question of a decision maker’s impartiality.^[9] What R v. Steele exem­plifies is that public confidence in the administration of justice can only be maintained if our judicial system both is, and is perceived to be, just, fair and neutral. The current “general test” established by the Supreme Court of Canada for whether there is a reason­able apprehension of bias on the part of a decision maker maintains this element of perception:^[10]

what would an informed person, viewing the matter realistically and practically — and having thought the matter through — conclude. Would [they] think that it is more likely than not that [the decision maker], whether consciously or unconsciously, would not decide fairly.

While R v. Steele may provide an obvious example of a reasonable ap­prehension of bias (i.e. one may not be the judge of a family member’s case),^[11] whether there is a reasonable apprehension of bias on the part of a decision maker is not always an easy question to answer.

In applying the “general test”, case law finding a reasonable apprehension of bias tend to fall into four categories:^[12]

1. Cases where there is an association between one of the parties and the decision-maker;
2. Cases where the decision maker showed antagonism during the hearing towards one of the parties (or his or her counsel or witnesses);
3. Cases where the decision maker was involved in a preliminary stage of the decision; and
4. Cases where the adjudicator pos­sessed a prior attitude towards the outcome.

R v. Steele is a clear example of a case involving an association between one of the parties and the decision maker. However, this first category is not limited to cases involving kin relationships and may extend to cases involving past professional relation­ships and personal relationships as well. Courts have generally found that a past professional relationship between a decision maker and a party does not in and of itself rebut the presumption of impartiality on the part of the deci­sion maker. That said, it must be shown that the past professional relationship related to the subject matter of the dispute.^[13] Moreover, while a personal relationship between a decision maker and a party also does not in and of itself raise the issue of disqualifying bias, courts will scrutinize allegations of a decision maker’s familiarity or friend­liness with one of the parties during the hearing.^[14] The takeaway for the adjudicator is that construction law is a niche and specialized area involving a relatively small group of professionals and as such, he or she should consider, prior to appointment:

1. Whether he or she has an association with one of the parties; and
2. Whether the nature of this association could lead to a reason­able apprehension of bias on their part.

The second category of cases may seem like a no-brainer, especially in cases where a decision maker is, for example, raising their voice or yelling at one of the parties. However, it should be noted that cases that fall into this category may be decided on subtle­ties and nuances. That said, a decision maker’s mere “[inappropriate] tone or demeanour” may be sufficient to raise disqualifying bias.^[15] As such, while an adjudicator should always be mindful of what they say they should also be mindful of how they say it.

The third category of cases may have relatively less application in the con­struction adjudication context, as these cases tend to involve decision makers who were overly active during the subject dispute resolution process. That said, while in most contexts, decision makers are required to play a passive role in the dispute resolution process and thus may not be involved in in­vestigating the matter that is before him or her, the Act, in contrast, pro­vides for an inquisitorial adjudication process whereby the adjudicator may play an active and investigative role.^[16] Notwithstanding, this third category also includes cases where the decision maker was involved in a previous stage of the dispute resolution process. As such, an adjudicator should be mindful of a reasonable apprehension of bias on their part when he or she was in­volved in the dispute prior to his or her appointment – perhaps as a mediator or as a member of the subject project’s dispute resolution board.

The final category of cases, known as “attitudinal bias”,^[17] considers allega­tions of a decision maker coming to the dispute with a prior attitude towards the dispute’s outcome. In these cases, courts may scrutinize, among other things, a decision maker’s past state­ments or publications. Consider, for example, an adjudication involving a specific kind of payment dispute between a subcontractor and contract­or where the adjudicator decides in favour of the subcontractor. If the con­tractor subsequently discovers that the adjudicator had previously published articles or appeared on podcast epi­sodes showing unequivocal support for subcontractors in similar payment disputes, the contractor may be suc­cessful in raising disqualifying bias.

The general takeaway for adjudicators is that until the Divisional Court inter­prets “a reasonable apprehension of bias” within the context of the Act’s adjudication provisions, the adjudica­tor must look to its interpretation in the wider legal context for guidance. However, this guidance will ultimately have its limitations for, as discussed above, the powers bestowed on adjudi­cators under the Act are unique and as such, the interpretation of a “reason­able apprehension of bias” under the Act may reflect this uniqueness. Stay tuned.