Fast Forward

Van Krkachovski, Partner, McCague Peacock Borlack McInnis & Lloyd LLP

Alana Abells, Associate Lawyer, McCague Peacock Borlack McInnis & Lloyd LLP

Tim McKeon, Associate Lawyer, McCague Peacock Borlack McInnis & Lloyd LLP

Ontario’s Civil Justice Reform Project made extensive amendments to the Rules of Civil Procedure, effective Jan. 1, 2010. Central to the amendments are three guiding principles, namely: access to justice; proportionality; and the culture of litigation. 1 In particular, emphasis will be placed on the fact that the time and expense of any proceeding should be proportionate to the amount in dispute and the importance of the issues at stake. 2

There are many amendments to the Rules. This paper will focus exclusively on the proposed changes to the rules of summary judgment (Rule 20), discovery (Rules 29.1-31.05), mandatory mediation (Rule 24.1), pre-trial conferences (Rule 50) and the increase in monetary jurisdiction of the Small Claims Court and Simplified Rules. This article will explore some of the cost implications related to these changes.

SUMMARY JUDGMENT

Currently, motions for summary judgment are required to pass a significant threshold test in order to be successful. Succinctly, the moving party must show that no genuine issue exists as to the material facts such that a court may grant summary judgment absent concerns of credibility. On a summary judgment motion, the court will refuse to assess credibility, weigh the evidence or make specific findings of fact. Coupled with the risk of incurring substantial indemnity costs on an unsuccessful motion, summary judgment has become a largely undesirable risk in all but the clearest of cases.

Under the amended Rule 20, judges (not masters) will be able to weigh evidence, evaluate the credibility of a person testifying at a deposition and will be permitted to draw reasonable inferences from the evidence presented. Judges will also be empowered to order that oral evidence be presented without strict time limits. In essence, a mini-trial can be held. The amended rules will eliminate the presumption of substantial indemnity from costs awards following such motions.

Additionally, where a trial is deemed necessary, a judge may specify the material facts that are not in dispute, define the issues to be tried and craft an order directing the expeditious proceeding of the action thereby narrowing the issues and making the process more efficient.

This relaxing of the threshold for summary judgment will likely lead to a significant increase in the number of motions brought for summary judgment. This will, in turn, force the parties in the litigation to compile and present their evidence more quickly and will have the overall effect of moving the action forward. More claims will be resolved at an earlier stage (ostensibly reducing costs) and those claims not proper for summary judgment may benefit from the court narrowing and defining the material issues for trial. These claims will then be better suited to settlement discussions by counsel who presumably better understand the strengths and weaknesses of their cases.

DISCOVERY

The amendments will introduce Rule 29.1, which governs the creation and execution of discovery plans. Parties will now be required to produce an agreed upon discovery plan in order to have recourse to documentary discovery, oral examinations for discovery, inspection of property, medical examination and discovery by written interrogatory under the current Rules 30-35 inclusive. The discovery plan will be required within 60 days of the close of pleadings although this requirement may be extended by consent of all parties.

The discovery plan will include a summary of the intended scope of discovery having regard to relevance, cost and the importance and complexity of the issues in the action. The plan will include dates for service of affidavits of documents and information regarding the timing, costs and manner of production. It will also include the names of people intended to be produced for discovery and an estimate of the likely length and timing of their examinations. The new rule also encourages the inclusion of any other information that is intended to assist in the expeditious and cost-effective completion of the discovery process. Where parties cannot or will not agree to a discovery plan, the courts will be empowered to refuse any relief requested and to deny costs on any motion arising from discovery.

Designed to create proportionality in discovery, the amendments will also introduce Rule 29.2. Under this rule, a court will consider whether the time or expense of providing an answer and/or producing a document is unreasonable, whether answering would unduly prejudice a party, whether an order would unduly interfere with the orderly progress of the action and whether the information is readily available in an alternative source.

The rationale of the discovery plan requirement is to reduce or eliminate time wasted on discovery-related disagreements. This will give counsel an opportunity to seek certain productions at an early stage rather than seeking undertakings at oral examinations. It is hoped that this attempt to focus the scope of discovery will prevent the number of motions that arise from undertakings and refusals.

The discovery plan may also create increased up-front legal costs following the commencement of an action. These costs will hopefully be balanced by swifter resolutions, earlier file closings and a reduction in motions.

The One-Day Rule

The amended rules will also introduce Rule 31.05.1, which will limit the time available for the oral examination of a party to a total of seven hours.

Potential benefits of this amendment include a requirement that counsel be better prepared for discovery, the reduction of ‘fishing expeditions’ and repetitive and irrelevant questions. Conversely, it may lead to an increased number of motions requesting additional time for discovery. In addition, a potential for abuse exists, in that the rule does not specify how the timing of the seven hours will be tracked.

An additional amendment intended to narrow the scope of the discovery process is the rewording of Rules 30.02 (1) and (2), 30.03(1)-(4), 31.06(1), 31.06(3)(a), and 34.10(3)(a). In all of these rules, the phrase “relating to any matter at issue” will be changed to “relevant to any matter at issue.” This amendment is intended to narrow the scope of discovery to only those matters that are directly relevant to the issues in the action and to prevent the time and cost wasting effects of ‘fishing expeditions,’ characterized by counsel exploring largely irrelevant matters in the hopes of unearthing relevant facts where none are expected to exist. This will, it is hoped, create an overall more efficient discovery process that encourages an earlier understanding of the facts of the case and encourages earlier settlement of matters proportionate to their complexity.

MEDIATION

Currently, mediation is mandatory only in Toronto, Ottawa, or Essex County for actions commenced under the Simplified Rules. Under the amended rules, mediation will become mandatory for all actions commenced after Jan. 1, 2010 in these three geographic areas. Certain exceptions will apply: actions on the Commercial List in Toronto, actions involving estates, trusts, and substitute decision makers and actions commenced under the Construction Lien Act, the Bankruptcy and Insolvency Act and the Class Proceedings Act. Additionally, the parties will have the option of seeking an order exempting them from mandatory mediation.

Mediation will be required within 180 days of the filing of the first defence. For existing actions, the 180-day time limit will begin to run from Jan. 1, 2010. One of the parties to the action will be required to file a notice with the court providing the mediator’s name and scheduled date of mediati
on, or the mediator’s report where mediation has already been concluded. Until the filing of this notice, the court will not set the matter down for trial. Parties will be allowed to seek an order postponing mediation. In this situation, the court’s priority will be to determine the most expeditious manner to move the matter towards a swift resolution. The amendment will do away with the requirement that the insured attend the mediation; under the amendment, only the attendance of the insurer will be required. This amendment is intended to streamline the process and promote early settlement of a claim, thereby reducing further litigation costs.

PRE-TRIAL CONFERENCES

Pre-trial conferences will become mandatory for all actions in all jurisdictions. A pre-trial will be scheduled by the registrar to be held within 90 days after the action is set down for trial. Pre-trial briefs will become mandatory and will need to be filed a minimum of five days prior to the pre-trial.

The pre-trial judge will be able to order a timetable for trial preparation as well as a trial date. As well, the judge will be able to make any order deemed necessary to facilitate the proceeding.

Additionally, the parties may consent to having the pre-trial judge preside over the trial of the action as well. This may lead to trials in which the judge is familiar with the case, thereby reducing motions and shortening the duration of the trial. These situations will actuate the overall intentions of the amendments, which are to effect faster resolutions, earlier settlements and a greater overall proportionality between the complexity of a matter and its litigation costs.

JURISDICTION OF THE SMALL CLAIMS COURT

As of Jan. 1, 2010, the monetary jurisdiction of the Small Claims Court will be increased from Cdn$10,000 to Cdn$25,000. This increase in jurisdiction is intended to make the justice system more accessible and cost-effective for litigants who may not otherwise be able to afford representation. This is largely due to the fact that Small Claims Court permits representation by agents and paralegals whereas the Superior Court of Justice does not.

Interestingly, there has not been any announcement indicating expanded resources for the Small Claims Court. Therefore, the same number of deputy judges, courtroom facilities and court staff will be asked to process what is likely to be an aggressively expanding case load. In addition, there is likely to be a number of potential claims that will not be issued until Jan. 1, 2010. This may create a bottleneck situation wherein the early part of 2010 will see a significant increase in the sheer volume and technical complexity of claims brought in Small Claims Court. In sum, the early part of 2010 will likely create a transition period during which the length of time to move a file through settlement conference and on to trial will be significantly longer than exists at present.

Transferring Superior Court Actions

Generally, a transfer into Small Claims Court will mean that a successful party’s entitlement to costs will be significantly reduced. Costs in Small Claims Court are capped at 15% of the value of the claim absent unusual, aggravating circumstances. Coupled with the cap on recoverable damages, this may have the desired effect of giving greater predictability to overall litigation costs. As well, Small Claims Court does not require the production of affidavits of documents or the conduct of examinations for discovery. This will also have the effect of reducing overall litigation costs, particularly in cases in which a party is represented by legal counsel. Of course, there will also be situations where, for strategic reasons, a party opts to risk higher litigation costs in order to access the higher level of evidentiary certainty that is guaranteed by the Superior Court.

SIMPLIFIED PROCEDURE UNDER RULE 76

As a corollary to the increased jurisdiction of the Small Claims Court, the availability of Simplified Procedure will be increased from Cdn$50,000 to Cdn$100,000. Simplified Procedure offers significant cost and time-saving features, including reduced requirements relating to the content of motion records and early disclosure of documents and potential witnesses. In addition to the jurisdictional changes, each party under simplified procedure will be able to engage in two hours of oral examination for discovery, as opposed to the pre-amendment rules that did not permit any examination for discovery. As well, affidavits of documents will now be required to disclose every document relevant to any matter in issue. This has been changed from any document relating to any matter in issue and will have the effect of narrowing the scope of documentary disclosure. This will, in turn, reduce time and cost expended in the preparation of documentary productions.

NET COST EFFECT

Both the expanded jurisdiction of the Small Claims Court and the application of Simplified Procedure will introduce a greater element of predictability in the setting of reserves and the overall cost of litigation. While the process will be more involved in the initial stages of a claim, it is to be hoped that these costs will be offset by a higher rate of earlier settlement and a greater proportionality between the complexity of a given matter and the effort required to effect a resolution.

1 Honorable Coulter A. Osborne, “Civil Justice Reform Project” (2007), at 4 www.attorneygeneral.jus.gov.on.ca/english/about/pubs/cjrp.

2 Ibid. at ii.

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More claims will be resolved at an earlier stage, ostensibly reducing costs, and claims not proper for summary judgment may benefit from the court narrowing the issues for trial.

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Both the expanded jurisdiction of the Small Claims Court and the application of Simplified Procedure will introduce a greater element of predicatbility in the setting of reserves.