COVID-19 continues to pose unique challenges to Canada's legal system, including questions about how the Ontario Securities Commission (OSC) will conduct its proceedings. In a recent decision, a Hearing Panel of the OSC ordered a merits hearing to proceed by videoconference (First Global Data Ltd (Re), 2000 ONSEC 23), despite the respondents' strenuous objections. This decision, which follows a determination on March 23, 2020 that an unrelated merits hearing would continue partly in writing (discussed in our previous post), highlights the evolution of the OSC's response to COVID-19 in conducting its proceedings.
Commission's Current COVID-19 Procedure
Due to the COVID-19 pandemic, the OSC is not holding in-person hearings. Currently, the standard practice is to conduct proceedings through videoconference or teleconference. However, any decision to proceed in this fashion is made on a case-by-case basis.
The OSC's discretion to conduct electronic hearings is limited by the Statutory Powers Procedure Act. Specifically, a tribunal shall not hold an electronic hearing where a party satisfies the tribunal that it "is likely to cause the party significant prejudice."
The Commission's Ruling
Although a majority of the respondents objected to proceeding by electronic hearing, the Panel found that the respondents failed to establish that a videoconference would cause them significant prejudice or that it would deprive them of their right to a fair hearing. Furthermore, the Panel noted that proceeding by videoconference is consistent with Rule 1 of the Ontario Securities Commission Rules of Procedure and Forms (Rules) which requires proceedings to be conducted "in a just, expeditious and cost-effective manner."
In reaching its decision, the Panel determined it was necessary to balance the respondents' interests against the desire to conduct proceedings efficiently and expeditiously. Although the respondents argued that in-person testimony was the "gold standard", the Panel found that the respondents failed to cite any persuasive or binding authority in support of that proposition. Furthermore, the Panel noted that the courts and tribunals (including the OSC) have considerable experience conducting hearings via videoconference.
The Panel also rejected the respondents' submission that there would be no harm in delaying the merits hearing until in-person proceedings could resume. The Panel reasoned that the Rules specify that OSC proceedings ought to be conducted expeditiously and cost-effectively. Delaying the merits hearing for an indeterminate amount of time would inherently be less expeditious, and is more likely to increase expense due to the additional time required to refresh the memories of those involved. Although expediency and cost-effectiveness cannot override one's right to a fair trial, the competing objectives in play must be balanced.
In response to specific objections raised by the respondents, the Panel made the following conclusions:
- Hearing will have serious consequences: Although this is a relevant consideration that favours a heightened duty of fairness, this fact alone does not necessitate that hearings must be held in-person.
- Proceeding will be complex and lengthy: Similarly, this factor does not justify holding in-person hearings exclusively. Prior the pandemic, the Commission held some proceedings via videoconference, including those concerning complex matters.
- Credibility is at issue: Where this is the case, testimony given through a remote proceeding is just as reliable as that given in-person.
- Time and Cost: The respondents offered no persuasive explanation to support their contention that a videoconference hearing will be slower and more costly. Their speculation is inconsistent with the Commission's experience of successfully conducting virtual hearings to-date.
- Trial practices of courts or other regulatory bodies: Since COVID-19 assessments are highly fact-specific (e.g., incidence of COVID-19 infections in a geographic area), the fact that some courts or some tribunals are offering in-person hearings is of no consequence.
- Other: Additionally, the Panel made the following brief conclusions:
- Conducting an entire merits hearing by videoconference is consistent with the Commission's past practice.
- A videoconference merits hearing can be successfully conducted, even where there is a self-represented respondent.
- The presence of a translator does not preclude a hearing from proceeding by way of videoconference.
Ultimately, the Panel rejected the respondents' submissions and ordered the merits hearing to proceed, as scheduled, by way of videoconference.
Takeaways
The Panel's decision offers the following guidance to parties and their counsel in the COVID-19 era:
- The need for courts and tribunals to operate during the pandemic has necessitated the use of electronic proceedings, and the OSC is no exception.
- An OSC respondent who objects to a videoconference hearing will only be successful where they can demonstrate that an electronic hearing will result in "significant prejudice" - a high threshold.
Respondents will likely be required to cite persuasive evidence to contradict the Commission's successful experience in conducting videoconference hearings to-date. Nevertheless, the Commission may prefer to proceed by videoconference with such issues being addressed if and when they arise.
The author thanks Ceviel Alizadeh-Najmi for her contributions to this article.
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