Fairness and Predictability in Canada’s Courts

Commentary

It seemed simple enough as we closed out the 20th century. The role of courts was to apply longstanding rules of evidence to ferret out the truth, the whole truth, and nothing but the truth. In a criminal case, the evidence had to prove the facts necessary to establish guilt beyond reasonable doubt. On the other hand, in a civil case, the plaintiff’s burden was to prove the facts triggering civil liability on a balance of probabilities.

This remains the case today. It remains harder to secure a criminal conviction than a civil judgment because it is easier to prove that something happened on a balance of probabilities than beyond a reasonable doubt.

But the rules of evidence—such as the hearsay rule and the assessment of individual actions—have undergone something of a transformation over the last 30 years, largely as a result of what is commonly called woke ideology but is known as postmodern thought in philosophical circles.

A central premise of this thinking, which first emerged as early as the 1970s and took root within academia at the turn of the century, is that human beings are not capable of being objective. Truth is largely a mirage, concocted by those with power, and the narratives a society accepts as truths are often myths perpetuated to preserve power.

This philosophical movement has had a profound impact on Canada’s legal system. A legal system that guaranteed individual equality was increasingly seen to be a flawed narrative that lacked context and masked underlying dynamics such as systemic racism. Equality perpetrated a false picture that passed as truth and served the interests of the powerful who benefited from these unrecognized systemic biases. Forceful measures had to be introduced to deliver equity, as opposed to equality of opportunity, since this equality did not truly exist in a society impaired by systemic racism and other power dynamics. Some of those changes included the admission of indigenous oral histories in spite of the rule against hearsay evidence in land claim cases, the use of statistical evidence to prove systemic discrimination, and increasing reliance on social context reports introduced by expert witnesses.

It would be wrong to suggest that these developments have not improved some aspects of the legal system. Rigid rules can and did produce unfair results from time to time. Postmodern approaches have increased the ability of courts to act more fairly in individual cases. The primary negative with this approach, however, is that the outcome of litigation has become more difficult to predict, thereby increasing uncertainty and the volume of litigation.

Many would argue that this is an acceptable cost in many employment cases and almost all human rights cases since eliminating discrimination to advance fairness and justice is a key objective within these fields of law. Contextual fairness makes sense in such cases.

Businesses, on the other hand, require the rule of law and legal certainty. Absent that, the investment climate sours and capital formation becomes more challenging. An arbitrary and unpredictable legal system can have negative implications for the wealth of a society. The plain words of a contract should generally be enforced to support the perception of a jurisdiction as a safe investment environment. The cost of contextual fairness in individual contract cases may be too high in terms of economic performance.

Canadian courts reliably protected contract certainty until 2014. Until then, a judge generally implied terms into a contract when the express wording of the contract was unclear or contradictory. A business could usually count on the courts to enforce the unambiguous language in a contract.

Then came the 2014 Supreme Court of Canada decision in Bhasin v. Hrynew, reflecting a broader shift to contextual fairness. The decision acknowledged the very clear terms of the contract in dispute but awarded damages against a party who complied with the letter of the contract because he did not act in good faith. While this may have produced a fairer result for the disputing parties, it came at the cost of certainty and predictability for the world of business in Canada. Several subsequent court decisions have firmly embedded this approach to Canadian contract disputes. In the 2020 decision of Uber Technologies Inc v. Heller, the Supreme Court expanded the scope of what constituted an unconscionable contract that could be struck down as unenforceable.

It is true that rigid rules produced real injustices. The old hearsay rule kept out reliable evidence, and strict contract enforcement rewarded sharp practice. The cost in lost business, however, has yet to be calculated. England’s courts do not recognize a duty of good faith in contract law, and while such a duty is recognized in most American states, it is often narrowly applied. The parties in some states can contract out of their good faith obligations.

Recent advances in technology have further eroded the predictability of litigation outcomes. As deepfakes abound and AI changes our understanding of reality, the Canada Evidence Act needs an update to tighten the rules for electronic documents. The courts are being left with the task of working out solutions to these new challenges that have not been the subject of focused review and debate by our elected representatives.

It is time for the legislators to act and make the reforms necessary to accommodate the use of AI-generated evidence in court and discourage those who falsely challenge real evidence as being AI-generated. This task should not be left exclusively to appointed judges. Predictable rules will help maintain Canada as a preferred investment destination. Our legislators should study the potential implications of contextualized approaches to contract disputes and their impact on economic activity, and should act accordingly.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.