Covid-19 and Legal Institutions: Courting Accessibility and Efficiency

Daniela Bassan, Q.C. is a Partner and Practice Group Chair at the law firm of Stewart McKelvey (Canada) where she focuses on complex, multi-jurisdictional dispute resolution. This blog is part of a special series on the coronavirus.

As the global community considers how the coronavirus crisis will impact the Bretton Woods institutions, there are contemporaneous and unprecedented changes to the rule of law and its supporting structures.  These real-time changes to legal institutions – including improved access, greater efficiency, and continued accountability – can positively influence the decisions of economic and political leaders in the international order.

It seems that overnight courts in many jurisdictions – including at national levels – have fast-tracked their adoption of new technologies and become more accessible at micro and macro levels.  In some cases abandoning hundreds of years of tradition in terms of how disputes are handled, courts have closed their physical doors in favor of opening digital spaces for remote legal proceedings.  In many jurisdictions, these proceedings are restricted to urgent or essential matters, in addition to time-limited hearings, so as not to overwhelm the new systems.  However, as courts become more accustomed to virtual hearings and as the backlog of non-urgent cases increases, these limitations will likely be relaxed. 

International arbitral institutions have similarly – and more broadly – instituted protocols and guidelines for remote arbitrations to continue during the pandemic.  Indeed, by virtue of their mandates, many of these institutions have more experience with virtual proceedings – both procedurally and substantively – than national courts and may be an expedient choice for disputing parties during the pandemic.

At the same time, governments and authorities have enacted sweeping orders and declarations affecting entire cities, countries, and continents.  The availability of legal institutions, whether locally, nationally or internationally, to review the legality of those decisions and their impacts on people and businesses is fundamental to the international order. 

For example, the development of tools to trace coronavirus patient contacts and the reporting/aggregating of that information has wide implications for privacy rights. Similarly, new measures to approve imported or exported medical supplies, including faster timelines and streamlined procedures for doing so, can challenge established health and safety laws. New collaborations between large competing firms, working to find practical solutions in the retail and manufacturing sectors, may engage (and require suspension of) anti-trust and competition rules.  Further, the evolving definitions of “essential” services during various phases of societal lockdown can create constitutional issues between different territories where the same businesses are (or are not) operating.  In addition, long-lasting pandemic measures may discriminate against foreign investors and give rise to breaches of treaties such as international investment agreements signed by many nations.

Regardless of the forum or context, the need for legal institutions to adjudicate economic, financial, and even politically-inspired disputes will be enormous as a result of the pandemic.  The early and efficient adjudication of pandemic-related disputes will be essential, whether it involves a rural retailer against a local authority or a foreign investor disputing a state actor.

For example, there will be bankruptcy and insolvency proceedings affecting businesses of all sizes and across many hard-hit sectors, including bricks-and-mortar retail and hotel operators.  There will be construction and infrastructure disputes as the pandemic affects global work sites, their personnel, delivery schedules, and equipment availability.  There will be disputes triggered by large-scale policy decisions made by governments, such as the scope of ongoing shutdown orders, the collection of mass data and information about private citizens, and the nationalization of import/export rules for essential supplies. There will be transactional and stakeholder disputes related to acquisitions and investments, due to material changes in risk profile (and risk allocation) as a result of the pandemic.  There will be investor-state disputes where foreign investors claim they have been treated unfairly by a host state and contrary to the minimum standards set out in international agreements.

Legal institutions will be asked to decide these disputes – including those involving state actors and multinational stakeholders – on a timely and efficient basis.  Virtual operations by national courts and international bodies will make this more possible.  Test cases challenging important policy decisions related to the pandemic will also be critical for the accountability of current decisions, and for informing future actions.  By combining accessibility with efficiency, and accountability with directionality, structural changes to legal institutions can emerge as an important aspect of international pandemic planning.