An adjudicator’s exploration of personal opportunities with a participant in a pending case before them can constitute an appearance of bias. Typically, this occurs where the communication with the party (or their representative) involves undue familiarity or where the financial incentive for the adjudicator is material. However, the communications and relationship must be significant to overcome the strong presumption of impartiality that applies to adjudicators.
An obvious example of an appearance of bias is Jefford v. Aviva General Insurance, 2024 CanLII 23458 (ON LAT), where an adjudicator accepted an offer of employment from a party appearing before them in a pending hearing. The adjudicator did not disclose this future employment to the parties. The Associate Chair of the tribunal cancelled the decision, finding that this relationship constituted a perception of bias even though the employment had not yet commenced. However, most cases are not that clear cut.
Two recent Ontario Court of Appeal decisions that contain several similarities resulted in quite different outcomes: Vento Motorcycles, Inc. v. Mexico, 2025 ONCA 82 (CanLII), and Aroma Franchise Company, Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839 (CanLII). Both cases involved commercial arbitration. In both cases, counsel for one of the parties approached the arbitrator about the possibility of their serving as an arbitrator in a future dispute(s); the arbitrator accepted the offer; and the arbitrator did not disclose the communications and offer to the other party in the pending arbitration. The appearance of bias test, similar to what applies to judges, was articulated in both cases. In Vento Motorcycles, a finding of an appearance of bias was made. In Aroma, no perception of bias was upheld.
The differences between the two decisions were nuanced. In Aroma, the arbitrator was asked to sit on only one additional matter, in a different area of law, and where the parties were different. In addition, there was an understanding that arbitrators would occasionally hear other matters involving the same lawyers and, sometimes, even the same parties, so long as it was not too frequent. In Vento Motorcycles, the arbitrator was asked to serve on a roster of arbitrators under two international “free trade” agreements. The appointments were prestigious in themselves. In addition, one of the parties in the arbitration (i.e., Mexico) could, in their discretion, appoint the arbitrator to serve on future panels, which opportunities could be quite lucrative. The tone of the communications between counsel and the arbitrator was quite familiar. The Court in that case held that, objectively, a reasonable person could view these circumstances as potentially influencing the arbitrator’s decision in the current matter.
Regulators often have ongoing relationships with panel members at their hearings (e.g., discipline). Often, discipline panel members also serve on the Council or Board of the regulator and even on other committees. To avoid similar challenges, regulators should be careful to ensure that these ongoing interactions are within the parameters of the enabling legislation and the reasonable anticipation of the parties. Regulators should be cautious about their communications with panel members, especially those outside of the normal operation of the legislative scheme, during pending cases. The tone of any communications should be professional and business-like
What constitutes relational bias depends on the individual circumstances.