Judging the "vanishing trial" in the construction industry: the Right Honourable Beverley McLachlin, P.C., Chief Justice of Canada.

• Author: McLachlin, Beverley

Construction law is more than just sawdust, nails, and cement. To quote Philip Bruner, an eminent American construction lawyer:

[a] 'capstone' subject, a towering legal edifice built out of modern statutes, 'contextual' common law principles of and foundational legal concepts sustaining and binding the multitude of parties -- architects, engineers, contractors, subcontractors, material suppliers, material manufacturers, sureties, insurers, code officials, and tradesmen. (1) Not only is the field of construction law broad; it is ever changing. New laws, new techniques, new disputes, and occasionally new judicial decisions are constantly transforming the legal landscape. When Lord Sankey developed the "living tree" doctrine in 1930, and declared that "[t]he British North America Act planted in Canada a living tree capable of growth and expansion within its natural limits," (2) he was speaking about a tool of constitutional interpretation. But all areas of law, including construction law, are living, constantly evolving, trees. Some branches sprout and grow; others crack and need trimming. Thus, the law develops and remains responsive to changes in society.

This brings me to the future of the role of the courts and, by extension, the rule of law in construction law. Let me explain by returning to the tree analogy. The construction law tree looks different than it used to. It may not be dead, but new branches are not appearing as often as they once did. And old branches that need pruning are being neglected.

The trend is clear. Fewer and fewer construction cases are reaching the courts where the law is developed. Increasingly, instead of being resolved by judges, construction disputes are being sent to mediation, arbitration, or other forms of alternate dispute resolution (ADR). Why is this happening? Will the courts of the future play an important role in the area of construction law as they have in the past? If not, should we care? And if so, why should we care?

First, let's look at why the construction law tree, while still alive, has not experienced the growth that has occurred in other areas of law over the past decades. Construction is one of Canada's largest industries. In 2007, the construction industry generated 6.3% of Canada's GDP, and employed more than one million people. (3) Among those, we count many construction lawyers, whose numbers have not diminished. What has diminished is the use of the courts to resolve construction law disputes.

With only mild hyperbole, University of Wisconsin law professor Marc Galanter--speaking of litigation generally--describes this development as the "vanishing trial." This trend is particularly apparent in construction law. While construction disputes are abundant, and lawsuits not uncommon, it is increasingly rare for them to go to trial.

In the United States, the number of civil trials in all federal district courts, after peaking at just over 12,000 in 1984, reached a new low of 3,555 in 2006. (4) That's almost half the number of federal trials that took place 40 years ago, despite the fact that the number of suits filed during the same period soared from 66,144 to 259,541. (5) The same trend has played out in state courts, where the number of civil trials fell forty percent from 1976 to 2004. (6) Although similar statistics are not available for Canada, one recent report noted that ninety-five percent of civil matters in Ontario settle before trial. A Canadian commercial litigator, David Elliott, opines "[t]he 'vanishing trial' concept is certainly the case." (7) If this is so for litigation in general, it most certainly is true for construction litigation.

Why are fewer construction law cases coming to the courts? The Honourable Warren Winkler, Chief Justice of Ontario, blames the general decline in litigation on cost and delay:

First, our civil justice system often fails to meet the needs of ordinary Ontarians who require at once the fair, timely and affordable resolution of their legal problems. Second, an increasing number of litigants are transferring their cases from the traditional justice system into private arbitration. That is, trials are vanishing for two distinct, but related, reasons. Ordinary litigants simply can't afford to take their cases all the way through trial, and "well-heeled" litigants are heading for the exits. (8) Chief Justice...