Mr. Reuben East:

I thank Mr. Collenette and thank Deputy Duffy for his question. It is hard to speculate exactly on the cases that would come before the ICS, but what I can say is that the ICS was designed in response to concerns about the old ISDS system. I speak from experience because I have argued these cases for Canada under the old ISDS system. I am aware of what it is like to operate in that system and what these reforms might do for a state in trying to defend these claims. Let me point out a few things that are absent in the old ISDS system but present in the CETA ICS.

One is specific direction in the text. There are many examples. I know we have referred often to the right to regulate but this is not an empty piece of text. When the parties put in something powerful such as the right to regulate and various other directions, these are directions to a tribunal about how to interpret the treaty. One starts with the text when interpreting the treaty and every tribunal member has to do that. The parties were quite deliberate in putting in this type of language. That is why one sees so many instances of clear language about the right to regulate.

The second point is that there were instances under the old system with cases that were essentially frivolous in nature but were attempting to sue for high amounts in damages. These are sometimes referred to as frivolous claims. Under the old system, there are not necessarily provisions to deal with that. Under CETA, there are two provisions to deal with that specifically. One is that there is a specific provision to deal with frivolous claims. The second is about when they can be dealt with. A claim can be dismissed by a tribunal before the first hearing. This is essentially the consultations phase. It is not even a formal claim yet, but the claim can be dismissed. Under that circumstance, it saves the state money and perhaps awards against the investor in a frivolous claims example.

There are two other safeguards. Parties have an ability under the CETA investment court system to issue joint interpretations. This is powerful because it can be on any part of the agreement. This can also happen at the consultations phase. The parties can issue a joint interpretation very early, not even at the formal stage yet, to clarify the meaning of a particular text, whether it is about the environment, labour regulations or such. Those joint interpretations are binding for the tribunals in future, which is important.

There is usually is not a real ability to appeal a case. Under the ICS, there is an appellate system which has broad grounds of appeal. This is different from the old ISDS model where there were usually narrow grounds to try to annul a case. I hope that helps the Deputy.