SCC finds standard of review re arbitrator interpreting enabling legislation (whether dispute arbitrable) is reasonableness.
28, July 28, 2017 - Filed in: Court Cases
"The Health Insurance Act (“Act”) provides that the remuneration and working conditions of health care professionals are to be established by way of a collective bargaining mechanism that resulted, in this case, in the Accord‑cadre entre le ministre de la Santé et des Services sociaux et la Fédération des médecins spécialistes du Québec aux fins de l’application de la Loi sur l’assurance maladie (“Framework Agreement”). The Fédération and the Ministère de la Santé et des Services sociaux (collectively, “negotiating parties”) created a digitization fee to encourage radiologists to modernize their equipment. This fee is reserved for laboratories that the negotiating parties jointly recognize and designate, following a procedure and applying criteria they themselves have provided for in the Protocole concernant la radiologie diagnostique (“Protocol”), one of the schedules to the Framework Agreement. Section 54 of the Act provides that a “dispute resulting from the interpretation or application of [the Framework Agreement] is submitted to a council of arbitration, to the exclusion of any court of civil jurisdiction”. A distinction is made in the Framework Agreement between a [translation] “dispute with respect to fees” raised by a physician and a “collective dispute” raised by the Fédération.
G, a radiologist who is a member of the Fédération, applied to the negotiating parties for a declaration that certain clinics were eligible for the digitization fee. His application was denied. G contested that decision by submitting a dispute to the council of arbitration. The arbitrator, who was appointed to perform the functions of the council of arbitration on his own, found that he lacked jurisdiction to grant G the declaration being sought and that, at any rate, G did not have standing to submit the dispute. The motion judge granted G’s motion for judicial review, finding that the arbitrator’s decision was unreasonable. The majority of the Court of Appeal upheld the motion judge’s decision."
The S.C.C. held (6:1, with joint reasons by Wagner and Gascon JJ., separate Joint Reasons [concurring in the result] by Brown and Rowe JJ., and dissenting reasons by Côté J.) that the appeal is allowed and the award of the council of arbitration restored.
Justices Wagner and Gascon wrote as follows (at paras. 1-4, 31, 34, 38, 62-64):
"This appeal concerns the reasonableness of an arbitration award made in the context of a specialized collective bargaining scheme, namely the scheme for medical specialists and the government of Quebec under the Health Insurance Act, CQLR, c. A‑29 (“Act”). More specifically, the award dealt with the very concept of a dispute and with standing to submit such a dispute to a council of arbitration under the Act and the Accord‑cadre entre le ministre de la Santé et des Services sociaux et la Fédération des médecins spécialistes du Québec aux fins de l’application de la Loi sur l’assurance maladie (“Framework Agreement”).
The Protocole concernant la radiologie diagnostique (“Protocol”) is one of a large number of schedules that were negotiated under the Framework Agreement. It sets out the conditions for payment of a digitization fee, as well as what a medical imaging laboratory must do, and what criteria it must satisfy, to become eligible for that fee. The respondent, Dr. Ronald Guérin, is a radiologist. He wishes to contest by way of arbitration a joint decision of the Ministère de la Santé et des Services sociaux (“Ministère”) and the Fédération des médecins spécialistes du Québec (“Fédération”) (collectively, “negotiating parties”) to refuse to declare that the laboratories he represents are eligible to receive that fee for the years 2009 through 2011.
The council of arbitration decided that Dr. Guérin’s objection could not give rise to an arbitrable dispute under the Act and the Framework Agreement and that, in any event, only the Fédération would have had standing to submit such a dispute. Further to a motion for judicial review, the Superior Court and the majority of the Court of Appeal both found that the council’s decision was unreasonable, concluding that it was open to Dr. Guérin under the Act to submit his dispute to the council of arbitration. The dissenting judge would have upheld the council’s decision, finding that its analysis was justified having regard to the Act and the Framework Agreement.
We would allow the appeal and restore the council of arbitration’s award. It was reasonable for the council to conclude that, under the Framework Agreement, the Protocol and the Act, Dr. Guérin’s proceeding did not raise an arbitrable dispute, because the Fédération and the Ministère had reserved for themselves the full discretion to designate the medical imaging laboratories that would be eligible to receive the digitization fee. It was also reasonable for the council to conclude that, in any event, Dr. Guérin did not have standing to submit such a dispute for arbitration, as it was a collective dispute that the Framework Agreement lawfully reserved for the Fédération. Moreover, contrary to what the majority of the Court of Appeal stated, physicians who feel aggrieved are not without recourse: there is a general law principle that permits them to sue the organization that represents them if it has breached its duty of fair representation.
The courts below were right to apply the reasonableness standard. Reasonableness necessarily applies, because the council of arbitration was called upon to interpret and apply its enabling statute, the Framework Agreement and the Protocol, which are at the core of its mandate and expertise (notice of dispute (reproduced at para. 2 of the arbitration award), in the recitals and at paras. 1‑3; Dunsmuir, at para. 54; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61,  3 S.C.R. 654, at para. 39; Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35,  2 S.C.R. 283, at para. 11; Mouvement laïque québécois v. Saguenay (City), 2015 SCC 16,  2 S.C.R. 3, at para. 46; Commission scolaire de Laval v. Syndicat de l’enseignement de la région de Laval, 2016 SCC 8,  1 S.C.R. 29, at para. 32).
When an arbitrator interprets his or her enabling legislation to determine whether a dispute is arbitrable, applying the reasonableness standard undermines neither the rule of law nor the other constitutional bases of judicial review. In contrast, the effect of applying the correctness standard by erroneously characterizing such a question as a true question of jurisdiction would be to undermine the presumption in favour of the reasonableness standard that has been consistently recognized and endorsed by this Court in numerous cases since Alberta Teachers (para. 39; see, e.g., Rogers, at para. 11; McLean v. British Columbia (Securities Commission), 2013 SCC 67,  3 S.C.R. 895, at para. 21; SODRAC 2003, at para. 35; Tervita Corp. v. Canada (Commissioner of Competition), 2015 SCC 3,  1 S.C.R. 161, at para. 35; ATCO Gas and Pipelines, at para. 28; Wilson v. British Columbia (Superintendent of Motor Vehicles), 2015 SCC 47,  3 S.C.R. 300, at para. 17; Saguenay, at para. 46; Commission scolaire de Laval, at para. 32; Capilano, at para. 22).
Dr. Guérin has applied for a review of the negotiating parties’ decision not to recognize the laboratories he represents for purposes of the payment of the digitization fee from 2009 to 2011. The council of arbitration concluded that it did not have the authority to grant his application, because the application did not raise an arbitrable dispute under the Act and the Framework Agreement. In our opinion, that decision was reasonable.
In short, given that the negotiating parties chose to reserve for themselves the full discretion to decide on and designate the laboratories that will be eligible to receive the digitization fee, the arbitrator’s decision that this dispute was not one that could be submitted to arbitration under the Act was reasonable.
It was also reasonable for the arbitrator to conclude that Dr. Guérin did not have standing to submit the notice of dispute to the council of arbitration. His decision was justified having regard to the Fédération’s monopoly of representation. It was also justified by the fact that no provision of either the Framework Agreement or the Act entitles a medical specialist to submit a dispute directly to a council of arbitration other than where the RAMQ has refused a payment or in a case involving a professional services contract with a health institution.
The courts below accordingly erred in intervening to overturn the arbitration award. We would allow the appeal and restore the decision of the council of arbitration, with costs to the appellant in all courts."
Note: The summary and body are drawn from Eugene Meehan’s SupremeAdvocacy Weekly Updates for the Law Community.