Civil Justice Changes

The subtleties and nuances of the various provincial civil justice systems are often of interest only to those of us who represent Canadian insurers and risk managers in court. I can’t say I’ve ever impressed a client with a detailed discussion of the subtleties of the Rules of Civil Procedure, nor would I want to. However, every now and then, changes to the civil justice system are significant enough to warrant bringing them to the attention of the industry as a whole. In Ontario, that time is now, as Jan. 1, 2010 will see important changes to the Ontario civil justice system take effect. These changes will invariably have an impact on the insurance industry, primarily, of course, on the claims’ side of the business.

Many of these changes are rooted in November 2007’s report by Justice Coulter Osborne entitled Civil Justice Reform Project. Osborne was asked in June 2006 to review Ontario’s civil justice system and to make recommendations as to how the system could be made more accessible and affordable. The Osborne project involved extensive consultation with representatives of the legal profession, the judiciary and the public, including, on the insurance industry’s behalf, The Canadian Defence Lawyers and the Insurance Bureau of Canada. The overarching issue for Osborne was the notion that the time and expense involved in legal proceedings should be proportionate to the amount in dispute.

The resulting changes to the system are significant, including, at the outset, the addition to the Rules of a general principle of proportionality to guide their interpretation — the time and expense devoted to any proceeding must reflect the amount at stake. In order to implement this general principle, specific changes have also been made in the following areas:

• small claims court

• the simplified procedure

• expert evidence

• the discovery process

• summary judgment motions

Small claims court

As of Jan. 1, 2010, the monetary limit of the Ontario small claims court will increase from $10,000 to $25,000, the first change in the limit since 2001. The impact of this increase on the industry will be quite significant, as this will allow company representatives to directly represent the company in court without going to the expense of hiring legal counsel for disputes involving up to $25,000.

Simplified procedure

The simplified procedure was first introduced to the Ontario civil justice system in 1996 for disputes involving, at the time, less than $25,000. The simplified procedure eliminated oral examination for discovery and also provided for a summary trial process where evidence could be adduced more inexpensively by affidavit rather than oral evidence. The monetary jurisdiction of the simplified procedure was increased to $50,000 in 2003.

As of Jan. 1, 2010, the simplified procedure will be mandatory for claims less than $100,000. In addition, the scope of documentary disclosure has been narrowed, in response to a general complaint that existing documentary discovery requirements were too broad, and accordingly, too expensive. The test for production of documents has been changed from “semblance of relevance” to actual relevance, as the sense was the former wider test served only to increase the scope of documentary discovery beyond that which was necessary for the parties to fairly litigate the case.

Given this dramatic increase in the limit of the simplified rules, the court reintroduced oral examinations for discovery to the process, though such discovery must be limited to two hours per party, regardless of the number of parties involved. This should benefit insurance defence counsel greatly, as it will allow us to ask quick and pointed questions to a plaintiff (for example, the names of treating physicians or employment history) in cases where, up until now, no oral discovery was permitted.

Expert evidence

Defence counsel and insurers have often taken issue with the perceived bias of experts retained by plaintiff’s counsel, who, unlike defence counsel, can “expert shop.” The Osborne report also reflected this concern that experts were too focused on being advocates, and were not providing independent and unbiased assistance to the court. Experts will now be explicitly required by the rules to provide only evidence that is fair, objective and non-partisan, and related to matters that are within the expert’s area of expertise. Experts must also provide additional assistance to the court if required, and all experts must execute a form called an Acknowledgment of Expert’s Duties confirming their acceptance of these obligations. Experts will also be required to reveal the instructions provided to them by counsel, the evidence they relied upon and the factual assumptions on which their opinion is based.

Another issue for Osborne was delayed trials due to late delivery of expert reports. In response, the time-lines for delivery of expert reports have been tightened. While expert reports, responding reports and supplementary reports were formerly due 90, 60 and 30 days prior to trial respectively, the target date for delivery is now the pretrial.

The discovery process

According to the Osborne report, overwrought and unnecessary oral and documentary discovery reduced the cost and efficiency of the civil justice system.

In response, the rules will now impose a seven-hour time limit per party on examinations for discovery, unless the parties consent or the court orders otherwise. In addition, as with the simplified rules, the test for documentary production will now be actual relevance.

The parties to the litigation must now plan ahead and agree to a written discovery plan, which establishes the scope of each party’s anticipated documentary and oral discovery, taking into account relevance, cost and complexity of the issues. The court will now have the power to limit any form of discovery where its cost is out of proportion with the amount in dispute.

Summary judgment motions

One of the universal complaints from Ontario lawyers had been the lack of a meaningful summary judgment motion procedure in Ontario like the Rule 18A summary trial procedure available in British Columbia, where judges can consider issues such as credibility and draw inferences from the evidence in order to dispose of cases prior to trial. In Ontario, judges were limited to simply dismissing a summary judgment motion if any triable issue was raised in opposition, and onerous cost consequences often flowed if the motion failed.

New changes will improve the system significantly. Ontario judges will now be permitted to evaluate credibility and draw reasonable inferences from the evidence. The court can also order a “mini-trial” of any issue(s) in dispute and obtain oral evidence to assist. Further, the court will now have greatly expanded power to use the summary judgment motion process as the basis for narrowing the issues in the litigation, including making orders listing the issues in dispute and orders relating to appropriate discovery in respect of those issues. Only unreasonably brought motions will now result in solicitor-client costs.

In the end, the hope is that these changes will reduce the overall cost of litigation for those involved in the process, including Canadian insurers and risk managers. One assumes that this result, if achieved, would be met with widespread industry approval.

Thankfully, however, William Shakespeare’s recommendation for cost reduction in the justice system, “The first thing we do, let’s kill all the lawyers,” has yet to be embraced by the Ontario legislature. I am under no illusion, however, that insurers do not continue to hold out hope.

Chris Dunn is a partner with Dutton Brock, LLP and his practice involves representing and providing insurance coverage advice to those in the insurance industry.