This publication first appeared in the February 2010 volume of the Without Prejudice.

Transcription

1 Strategies for Working with the New Ontario Rules of Civil Procedure R. Lee Akazaki This publication first appeared in the February 2010 volume of the Without Prejudice. In 2010, civil litigation in Ontario will undergo sweeping changes. Adapting can mean the difference between winning and losing. On January 1, 2010, change will come to Ontario. In the civil courts, at least. The last time litigation in Ontario underwent such a radical transformation was in Before 1985, the procedure-driven rules of court reflected the hierarchical nature of the courts. The 1970s represented the apogee of judicial obsession with procedural compliance. Strict adherence to rules and time limits were considered important to separate the wheat from the chaff. High Court judges were still addressed My Lord and My Lady, and sometimes the attitudes from the bench followed suit. The quarter century following 1985 witnessed early hope and democratization of the judicial process in Ontario, but ended in a series of crises in civil litigation. Many problems stemmed from the perceived need for endless, prying and costly discovery. Case flow management experiments created a patchwork of court-originated practice directions. By the 1990 s, litigation before the good ship Ontario Court (General Division) the predecessor of our Superior Court of Justice was sailing straight into a perfect storm. Its motion courts were bursting at the seams as the bench and the bar were still coming to grips with the new Rules of Civil Procedure. Civility among practitioners was plunging to new depths. (An inevitable culture clash between lawyers trained and seasoned under the pre-1985 rules, and those trained after 1985.) The administration of the former District, County and High Courts were still labouring under consolidation. Experimentation with automobile tort reform ensured that whiplash cases were diverted into a no-fault administrative tribunal, only to be replaced with more expert-driven catastrophic personal injury litigation. Fiscal belt-tightening led to judges 1

2 sitting idle without court staff to populate hearing rooms. In 1990, R. v. Askov, shocked the courts into allocating scarce court resources from the civil system to relieve the criminal case load. In Askov, an activist judiciary under the Canadian Charter of Rights and Freedoms unearthed an inefficient criminal justice system. As a result of a wholesale diversion of judicial resources to the criminal division, the civil trial Blitz became part of the litigation lawyer s day at the office. In 1996, the Ontario Civil Justice Review and the CBA s Report of the Task Force on Systems of Civil Justice called for nothing short of a wholesale modernization of the civil justice system and the culture of litigation. Most of the recommendations in these reports were eventually implemented by the courts of Ontario. Yet 10 years later, the cost of litigation and institutional delays still ballooned out of control. The solutions implemented to solve the crises of the 1990s were themselves creating their own problems. Cases were ushered into trial readiness en masse, but then there were no trial judges to hear the trials. The ensuing trial lists backlogs ran from months to years. Courts and lawyers outside of Toronto tried to weave a cordon sanitaire to keep Toronto s problems in Toronto. Ottawa and Windsor had their own case management systems, operating more or less independently. The promise of a seamless and unified Ontario civil justice system grew distant, as practice directions balkanized the courts into a patchwork of procedural fiefdoms. By 2004, Case Management in Toronto was all but dead. In Toronto, teams of judges were assigned to the specific task of settling long cases with peremptory trial dates because there were no judges hear them. A practice direction, codified on December 31, 2004, under Rule 78, restored the freedom to control the pace of litigation to parties and their lawyers. It was finally recognized that there were more sensible methods of clearing deadwood in the court system than getting them all ready for trial. On November 22, 2007, Coulter Osborne, a retired Associate Chief Justice of Ontario, delivered his long-awaited report as head of the Ontario Civil Justice Reform Project. In 2006, then Ontario Attorney-General Michael Bryant asked him to lead the Project. Osborne s task was no less than an overhaul of Ontario s beleaguered civil justice system. He was not afraid to challenge conventional thinking in order to unblock procedural impediments to the access of parties, both represented and acting for themselves, to the civil justice system. Beyond the list of recommendations, his background analysis is a bold and detailed appeal to the best practices of our legal training. The Osborne report recognizes that, despite new problems, the reforms were successful. Today, a collaborative approach to procedural justice has changed the culture of civil litigation to the point that Osborne s recommendations rely heavily on opposing lawyers working together to get a case settled or ready for trial. This is what I like to call the One Big Law Firm approach to lawyering. Treat other lawyers as if they worked in your own firm, and a lot of conflicts are avoided. The Ontario government s response to the Osborne report was the 2

3 announcement on December 11, 2008, of a package of statutory and regulatory enactments called Reforming Civil Justice for Ontarians. Highlights of the changes include: Small Claims Court jurisdiction increased from $10,000 to $25,000 Proportionality to be the new interpretive principle Simplified Procedure monetary limit increased from $50,000 to $100,000, with 2-hours of oral discovery and limited examination in chief in summary trials Revision of the summary judgment procedure Mandatory pre-discovery planning Time limits on examination for discovery Expert evidence reform Case-specific case management Mandatory mediation, in jurisdictions where it is required, to be more flexible Here, I propose to comment on two changes to civil procedure which will have a major impact on insurance litigation in Ontario: 1. Time Limits on Examinations for Discovery 2. New Summary Judgment Rules No one can say, based on actual experience, how strictly any of the new rules will be applied. At this early stage, without any judicial interpretation, we are all in the same boat. The absence of case law, however, leads to advocacy opportunities. Use the changes to your advantage there is an expectation that we will do this. In devising process diversions in the litigation maze, we are very much the lab rats. As such, counsel are expected to find short-cuts and use our imagination. One thing we have learnt from past rule changes is that the courts are cognizant of the underlying administrative evils the amendments are intended to address. The courts will be most open to persuasion by arguments consistent with these purposes. This does not mean that civil litigators must all march to the same tune. 1. Time Limits on Examinations for Discovery Rule 31, providing for examinations for discovery, has been amended to include a new time limit. The provisions of rule are as follows: TIME LIMIT Not to Exceed Seven Hours (1) No party shall, in conducting oral examinations for discovery, exceed a total of seven hours of examination, regardless of the number of 3

4 parties or other persons to be examined, except with the consent of the parties or with leave of the court. O. Reg. 438/08, s. 29. In discussions with experienced litigation counsel after the announcement of this rule, some expressed the view that the rule seems to be unfair in cases where there are multiple plaintiffs and/or defendants. The rule change implements the Osborne report s recommendation, as follows: Amend rule 31 to provide that each party have up to a maximum of one day (seven hours) to examine parties adverse in interest, subject to agreement otherwise or a court order. The rationale provided by the Osborne report did not expressly deal with the multiple-party issue. Rather, the view was that one day of discovery was sufficient in most cases. However, the rationale is ambiguous whether each party should be entitled to examine for only one day, or whether a party should be subject to discovery for that duration: A variety of factors contribute to unduly long examinations for discovery, including lack of preparation or experience on the part of counsel, irrelevant or repetitious questions or, in some cases, lawyers' billing targets. The Discovery Task Force referred to numerous scenarios in which individual or small business litigants were forced to abandon claims or accept less than adequate settlements as a result of excessive discovery costs. Many with whom I met expressed similar concerns about oral discoveries being fishing expeditions, unfocused or conducted by poorly prepared counsel who are unduly concerned about overlooking potential facts and issues. A few also noted lawyers' self-interest in prolonging examinations to achieve billing targets. As I have suggested, prolonged oral discoveries did not appear to be a problem in smaller Ontario communities. However, what was consistent among the views I heard was that a default of one day (or seven hours) of examination per party is sufficient in most cases. I emphasize that the one-day limit should be a default time. There will be cases where more than one day will be required. The one-day default rule ought to permit parties to agree to more than one day for discoveries. Failing agreement, the court would determine the discovery time allocation. [emphasis added] If one performs the arithmetic, there is of course no difference. It makes no ultimate difference whether each party to a lawsuit is restricted to examining others for a maximum of seven hours, or subject to discovery for no longer than seven hours. Reciprocity will limit the overall duration of the examination to the same multiple of seven hours. However, the rule change contemplates rationing of seven-hour increments among lawyers. This can have unfair 4

5 consequences. For example, if there are seven adverse parties, the rule contemplates each party s lawyer to limit the duration of each examination to one hour. Moreover, where there is more than one party with a common interest and common representation as in the case of every case where there are more than one plaintiff the examining lawyer s time is multiplied by a factor of seven, to fourteen, twenty-one, and so on. In the practice of multiparty litigation, most know that the bulk of questions will be asked by those taking the lead. Usually a plaintiff suing several defendants will take the lead in examining all of the defendants, and the defendant appearing to have the major exposure to liability will examine the plaintiff more than others. In this regard, both the rule change and the recommendation in the Osborne report are out of sync with the reasoning and the litigation practice. The rule change ought to have limited the duration of the length of examination to which a party is subjected, to seven hours. In order to deal with multiparty cases without prolonging the overall duration of the discovery stage of an action, one should therefore contemplate informal arrangements among parties to transfer time allotments from peripheral parties to those taking the lead on examinations. The rule should probably be changed to reflect this reality. Such a change would not lengthen the overall length of discovery. Until then, lawyers will have to make ad hoc arrangements among themselves. When will we get more than the standard time for discovery? In civil cases, the courts have historically been more lenient when conferring discovery rights than court time. To speak frankly, the courts have had their own economic considerations. There are two such reasons why courts have interpreted discovery rules in this way: (1) proceedings out of court, from the perspective of courts administration, are out of sight and out of mind ; (2) the less restrictively or less rigorously the rules are enforced, the fewer discovery motions there will be to clog up the motions courts, and trials would be shorter and more focused. In other words: the wider the scope of discovery, the less time lawyers would be in court (or so the theory went). In practice, wider scope of discovery resulted in the proliferation of issues, and in longer trials. Unfortunately, widening the scope of discovery was like printing more money to keep retailers out of bankruptcy. One day it all comes crashing down. The seven-hour limit must therefore be seen as analogous to raising the bank rate: curb discovery abuses by making the right of discovery less available. To foresee the instances where there may be more time allowed to conduct oral examinations for discovery, we must, of course, start with the rule, to determine when more time will be granted: Considerations for Leave (2) In determining whether leave should be granted under subrule (1), the court shall consider, (a) the amount of money in issue; 5

6 (b) the complexity of the issues of fact or law; (c) the amount of time that ought reasonably to be required in the action for oral examinations; (d) the financial position of each party; (e) the conduct of any party, including a party s unresponsiveness in any examinations for discovery held previously in the action, such as failure to answer questions on grounds other than privilege or the questions being obviously irrelevant, failure to provide complete answers to questions, or providing answers that are evasive, irrelevant, unresponsive or unduly lengthy; (f) a party s denial or refusal to admit anything that should have been admitted; and (g) any other reason that should be considered in the interest of justice. O. Reg. 438/08, s. 29. Most litigation practitioners will be familiar with many of these tests, employed in the exercise of discretion to expand or limit most procedural balancing-acts under the Rules of Civil Procedure. The most controversial, however, will probably be clause (d), namely the financial position of each party. This clause is more logically suited to a rule limiting the duration of a party s examination, not the duration of a party s conduct of others examinations. It is no secret that many plaintiffs in personal injury proceedings are impecunious. The same may be said of plaintiffs in commercial litigation, often businesses allegedly rendered insolvent by the conduct of another. The clause empowers such parties to use the time limit to curtail the length and thereby the scope of examinations for discovery based on their difficulty in paying counsel for protracted discovery proceedings. On the other hand, clause (a) also enables the court to consider the amount of money in issue. Plaintiffs who claim open-ended damages into the millions today often face endless examinations for discovery. Count on little change, in instances where parties refuse to instruct counsel to limit the scope of damages to provable claims. Advise a client to seek a realistic range of damages, and their exposure to lengthy, expensive and probing discovery will be lessened. On the whole, the new time limits on examinations discovery are intended to cure abuses and to encourage best practices. To follow the economic analogy, we must tighten our 6

7 belts. We must pay greater attention to pre-discovery preparation. The new discovery rules also provide three control mechanisms: the Discovery Plan, introduction of a simple relevance test for scope of discovery, and the interpretive rule for Proportionality in Discovery. The Discovery Plan is an innovation intended to pre-empt discovery motions. It is provided for in the new Rule : DISCOVERY PLAN Requirement for Plan (1) Where a party to an action intends to obtain evidence under any of the following Rules, the parties to the action shall agree to a discovery plan in accordance with this rule: 1. Rule 30 (Discovery of Documents). 2. Rule 31 (Examination for Discovery). 3. Rule 32 (Inspection of Property). 4. Rule 33 (Medical Examination). 5. Rule 35 (Examination for Discovery by Written Questions). O. Reg. 438/08, s. 25. Timing (2) The discovery plan shall be agreed to before the earlier of, (a) 60 days after the close of pleadings or such longer period as the parties may agree to; and (b) attempting to obtain the evidence. O. Reg. 438/08, s. 25. Contents (3) The discovery plan shall be in writing, and shall include, 7

8 (a) the intended scope of documentary discovery under rule 30.02, taking into account relevance, costs and the importance and complexity of the issues in the particular action; (b) dates for the service of each party s affidavit of documents (Form 30A or 30B) under rule 30.03; (c) information respecting the timing, costs and manner of the production of documents by the parties and any other persons; (d) the names of persons intended to be produced for oral examination for discovery under Rule 31 and information respecting the timing and length of the examinations; and (e) any other information intended to result in the expeditious and cost-effective completion of the discovery process in a manner that is proportionate to the importance and complexity of the action. O. Reg. 438/08, s. 25. Principles re Electronic Discovery (4) In preparing the discovery plan, the parties shall consult and have regard to the document titled The Sedona Canada Principles Addressing Electronic Discovery developed by and available from The Sedona Conference. O. Reg. 438/08, s. 25. DUTY TO UPDATE PLAN The parties shall ensure that the discovery plan is updated to reflect any changes in the information listed in subrule (3). O. Reg. 438/08, s. 25. FAILURE TO AGREE TO PLAN On any motion under Rules 30 to 35 relating to discovery, the court may refuse to grant any relief or to award any costs if the parties have failed to agree to or update a discovery plan in accordance with this Rule. O. Reg. 438/08, s. 25. The rationale for this rule was stated thus, in the Osborne report: 8

9 One proposal that I received was to amend the rules to require parties to agree upon a discovery plan early in the litigation process. The objective of a discovery plan would be to reduce or eliminate discovery-related problems by encouraging parties to reach an understanding early in the litigation process, on their own or with the assistance of the court if needed, on all aspects of discovery. During consultations, the need for such a rule amendment was questioned, given the time and cost associated with formalizing a discovery plan, especially in cases where parties do not have discovery problems. I do note, however, that this reform is in place in several American jurisdictions (Texas, New York, Arizona). In my view, parties should be encouraged to discuss early in the litigation how discovery will unfold, when and how production will occur and when oral discoveries will take place. It would be prudent to document areas of agreement and disagreement, if any. Early discovery/production planning will reduce costs in the long run. In most law suits, the benefit of this pre-discovery protocol is not altogether clear. On the other hand, in simple cases the exchange of letters or a telephone call would be all that is needed to come up with such a plan. Osborne recommended this innovation in the face of push-back from the practicing bar. He favoured the expected reduction in disagreements over the scope of examination for discovery and their consequential practice motions. The rule change will encourage a sharpening of skills, but these skills must be learned. At present, with the demise of the Bar Admission Course, it is hard to see how newer members of the bar will have the means of learning to use this rule effectively. It will call upon their senior adversaries to employ the utmost of professionalism in engaging fairly with newer calls, without compromising their clients interests. It will also require senior counsel to adapt to new practices. The second control mechanism is found in the changes in rules and The words, relating to any matter in issue, have been replaced with: relevant to any matter in issue. For twenty years, the scope of civil discovery in Ontario has ballooned since the pronouncement of the semblance of relevance test read into the words, relating to, in Kay v. Posluns (1989), 71 O.R. (2d ) 238 (H.C.). Despite the skepticism of some, the court will be required to apply basic rules of statutory construction, and hold that the simple relevance test is more restrictive in scope. i Although the days of the fishing expedition many not be numbered, its use might henceforth be restricted to those who need to justify that adventure. 9

10 The third controlling provision is the interpretive rule, rule 29.2: DEFINITION In this Rule, document has the same meaning as in clause (1) (a). O. Reg. 438/08, s. 25. APPLICATION This Rule applies to any determination by the court under any of the following Rules as to whether a party or other person must answer a question or produce a document: 1. Rule 30 (Discovery of Documents). 2. Rule 31 (Examination for Discovery). 3. Rule 34 (Procedure on Oral Examinations). 4. Rule 35 (Examination for Discovery by Written Questions). O. Reg. 438/08, s. 25. CONSIDERATIONS General (1) In making a determination as to whether a party or other person must answer a question or produce a document, the court shall consider whether, (a) the time required for the party or other person to answer the question or produce the document would be unreasonable; (b) the expense associated with answering the question or producing the document would be unjustified; (c) requiring the party or other person to answer the question or produce the document would cause him or her undue prejudice; 10

11 (d) requiring the party or other person to answer the question or produce the document would unduly interfere with the orderly progress of the action; and (e) the information or the document is readily available to the party requesting it from another source. O. Reg. 438/08, s. 25. Overall Volume of Documents (2) In addition to the considerations listed in subrule (1), in determining whether to order a party or other person to produce one or more documents, the court shall consider whether such an order would result in an excessive volume of documents required to be produced by the party or other person. O. Reg. 438/08, s. 25. This interpretive rule reinforces the relevance test, but it allows for the expansion or shrinking of the scope of discovery based on proportionality principles, as opposed to a strict subject matter test. Thus, relevance may be more or less restrictive in scope depending on the practicalities of the case as much as the logical connection to the subject matter of the law suit. Strategies The above rule changes are obviously more practice-invasive than any discovery regime we have known. Discovery, one must remember, is in itself an intrusion which must be justified by principles of natural justice, as the Court of Appeal has recently reaffirmed: Kitchenham v. Axa Insurance Canada (2008), 94 O.R. (3d) 276 (C.A.). As in all dramatic changes to the environment, the fittest will not necessarily be those with the strongest skills but those who have effective adaptive strategies. The following comments are only intended to provide some food for thought. Where the new interpretive rules will help, however, is in defining the standard of care. Lawyers who have hitherto prolonged examinations for fear that an unasked question might expose them to professional negligence suits may find some comfort in the new principles of proportionality. They can be emboldened to focus harder on important issues. However, those who squander their seven hours of discovery with lazy discovery skills will need to watch their back. For those in between, especially the overly conscientious, the new rules will also present challenges. Anyone who has ever seen a discovery checklist, either within a law firm or appended to traditional CLE materials, will know that the best questions are usually reserved to last. Often, a good hour can be spent on a witness education and background, including grade 11

12 school. Leaving the good stuff for last means you may run out of time to ask them under the new rules. Even now, it can mean that the questioner can be pressured to miss the subtleties of the interrogatories, either by late-day fatigue or by peer pressure from a room full of lawyers watching the clock. A good strategy for making room for important questions is to research the introductory questions ahead of time and simply lead on them. A series of Yes, yes, yes answers will reduce not only the time it takes to give the answers, but also the pauses in between for the witness to think. Leading is also an effective method of controlling the witness, and is permitted by rule 31.06(1)(b). The flip side of the above tip, for a large number of lower-priority questions (such as the ones that are likely to lead to discovery undertakings), is to type them out before hand and ask for the answers to them at the conclusion. Your opposing counsel can hardly object, if the questions are delivered before hand. One must be mindful of rule 31.02(1), which provides that an oral examination for discovery cannot be combined with a written interrogatory. Written Interrogatory There is no time limit on a written interrogatory. These are useful when the nature of the issues on examination for discovery are informational, and it is unlikely that an oral examination will lead to close questioning on matters of credibility or a witness visual or aural perceptions of an event or transaction. Where oral evidence is not as important as a long list of technical or repetitive details, and there are few facts in dispute, the use of examination for discovery through written questions should be considered as a strategy for avoiding discovery time limits. 2. New Summary Judgment Rules When should we move for summary judgment? What are the cost consequences of winning or losing? These are the two main considerations in approaching the changes to the summary judgment procedure. Summary Judgment for a Broader Range of Cases The first major change in the procedure is the threshold test for summary judgment. Until 2010, the moving party s burden was to show there was no genuine issue for trial. This wording has now been changed to no genuine issue requiring a trial. Some would say the difference between for and requiring is more metaphysical than real. Standing by itself, the 12

13 criticism might be warranted. In order to overcome interpretive inertia, the motions court has now been empowered with the tools to avoid a trial of an issue. These are: weighing of evidence, evaluating credibility, and drawing inferences from the evidence. In instances where there is a contest over conflicting testimony, a judge may also order a mini-trial to determine whether a whole trial is necessary. The mini-trial will be the most significant tool in the chest. Until now, stories of judicial weakness in granting summary judgment are legion. Originally, summary judgment operated with a tactical adversarial burden, whereby a respondent had to show flaws in the moving party s case for summary judgment by filing cogent evidence in reply, with a heavy emphasis on the word genuine. Justice Henry s decision in the seminal decision in Pizza Pizza v. Gillespie (1990), 75 O.R. (2d) 225; 33 C.P.R. (3d) 515 (G.D.), was a high point in judicial courage in applying the summary judgment rule. The death knell for the summary judgment was rung in two 1998 decisions of the Ontario Court of Appeal in Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161; 156 D.L.R. (4th) 222 (C.A.), and Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 38 O.R. (3d) D.L.R. (4th) 222. In Agounie, the court stated that a motions judge on a summary judgment motion should never assess credibility, weigh the evidence, or find the facts. In recent years, Superior Court judges have been echoing in private what many senior civil litigators have complained of for some time: that the Court of Appeal crippled the summary judgment rule as an instrument of early resolution of civil disputes. If there is any doubt about this, the Osborne report did not mince words: There was general agreement that rule 20 is not working as intended. Both lawyers and Superior Court judges said that the Court of Appeal's view of the scope of motion judges' authority is too narrow. Whether this view is correct can be debated. Whether it exists is beyond debate. The cost consequences from a failed summary judgment motion have also been said to be too onerous, deterring many litigants and their counsel from using rule 20. The bar reported, and ministry statistics confirm, that few summary judgment motions are brought today. It is important to observe that subrule (2.2) does not actually create the equivalent of a summary trial. Rather, oral evidence is to be introduced to aid the motions court judge in determining whether the triable issues are genuine and require a trial. The rule does not contemplate the judge being called upon to make findings of fact (as in a summary trial). Rather, the paramount test remains whether there is a genuine issue requiring trial. If, after hearing the evidence, the judge is satisfied that a trial is not required, subrule 20.04(2) provides 13

14 that the court shall grant summary judgment. It would also be wrong for litigants simply to treat the reform of the summary judgment rule as a lowering of the threshold. Instead of bringing summary judgment motions only in cases falling into the old Rule 20 model, counsel should treat mini-trials as an opportunity to expedite cases where the live testimony of one or two key witnesses on limited issues of genuine disagreement can be accommodated in a short hearing. In Toronto, judicial case management will allow for anticipatory scheduling of the oral portion of a summary judgment motion. Costs Consequences The former rule 20.06, providing for presumptive costs sanctions for a failed summary judgment motion, was also a factor in dampening parties desire to use the procedure as a means of expediting civil actions. With the genuine issue threshold set so high by the Court of Appeal, and the costs exposure being on a substantial indemnity scale, it would take brave counsel to advise a client to bring the motion in all but the simplest cases. In practice, judges have been reluctant to enforce the rule where competent counsel have brought the motions where the genuine issue was a close call. In this regard, changing the presumption of the scale of costs will likely not affect actual practice all that much. However, codification of a relaxed costs practice will likely have the effect of providing counsel and parties that their exposure to costs is really no different than in any other interlocutory proceeding. Thus, the new rule allows the court to impose substantial indemnity costs as a sanction for unreasonable motions or motions brought in bad faith, for the purpose of delay. i Sullivan on the Construction of Statutes, 5 th Ed. (Toronto: LexisNexis Canada Inc., 2008), p