Review: Justice Inc.

Mr. S, a British Columbia pensioner, took his $325,000 in life savings and left it all with Union Securities of Vancouver. He was an “unsophisticated investor”, as the investment industry puts it. He believed what the salesman told him.

By the time Union Securities was finished with Mr. S virtually all his savings were wiped out. Mr. S might have sued; instead he complained to the Ombudsman for Banking Services and Investments, a dispute resolution office created by banks and investment dealers. The ombudsman agreed Mr. S was badly treated and recommended compensation. Union Securities refused and – that was it. Mr. S did not get his savings back. The ombudsman issued a news release.

Alternative dispute resolution systems like the Ombudsman for Banking are growing ever popular. It is privatized justice promoted as quicker, more efficient and cheaper than public courts, writes Professor Trevor Farrow of Osgoode Hall. Lawsuits are undoubtedly expensive; even an Ontario Superior Court judge recently marveled that “excess appears to be the norm” in legal fees that run from a standard $225 an hour to as much as $1,000/hr.

Instead Canadians with a grievance are led to believe private dispute resolution is much better. But what if this is all wrong?

Civil Justice, Privatization and Democracy is an arresting book that challenges the whole premise of private dispute resolution. The system is “simply taking the imbalances that exist in the public sphere and shifting them behind closed doors to unregulated private venues,” writes Professor Farrow. In the case of Mr. S, we are not told the name of the financial advisor who led the client; we cannot see the contract Mr. S was asked to sign; we cannot learn why or how Union Securities did what it did.

“Without adequate public scrutiny, primarily through open court processes and the publication of precedents, there is a real danger that parties, particularly including those with power, will use the private system to circumvent public policies, accountability, and basic notions of procedural fairness,” Farrow writes.

Yet alternative dispute resolution is so widespread Rogers Inc., Telus, and Direct Energy write it into their standard consumer contracts, and an estimated 95 percent of civil disputes are now settled before trial. Farrow notes this is not a good sign: “Put simply, the more we privatize our justice system, the less law we produce.”

Case law and precedent are all the law we have. To win a judgment in court is to inform the next investor, the next policy-holder, the next property owner with a grievance, on and on through centuries of common law.

If public courts are slow and expensive – and Farrow argues the alternatives are not as quick and cheap as people think – the solution is not to privatize justice; it is to make the public system better.

Civil Justice makes a persuasive argument that Canadians are too quick to abandon the courts. “We need to take serious stock of what our current voracious appetite for privatization will mean for civil justice and democracy in five, ten, fifteen or twenty years,” Farrow concludes.

At the moment the future appears to foretell an old man’s lost savings and a one-page news release.

By Holly Doan

Civil Justice, Privatization and Democracy by Trevor C.W. Farrow; University of Toronto Press; 400 pages; ISBN 9781-4426-45783

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