The Rules of Civil Procedure And The Simplified Rules Proposal

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CHAPTER 14

Introduction

Practice and procedure in the Ontario Court of Justice (General Division) are governed by the Rules of Civil Procedure. "The Rules", as they are called, are lengthy, complex, in places difficult to understand, and perceived as slow to adapt to change. Not surprisingly, they have therefore been the subject of some comment, and criticism, during our consultation phase.

Some of the frustration targeted at the Rules springs from a prevalent sense that the law and its attendant regulations, rules and procedures in their entirety are not easily understood by laypeople. Indeed, they are sometimes not easily understood by legal professionals! This perception is of a general nature, however, and not one that can be laid completely at the feet of the Rules of Civil Procedure.

Some of the frustration springs from a mystification about the Rules and about the process by which they are enacted, and about their purpose. Some, however, springs from the recognition that the Rules, in an administrative sense, may not have caught up with the techniques of today and that they can be the source of unnecessary paper and procedures that add time and cost to civil litigation. There are many disputes in the system which do not require all of the paraphernalia and protection provided by the Rules which were crafted to accommodate more difficult and complex cases. This latter circumstance has led to an initiative known as the "Simplified Rules" initiative, to which we will return later in this Section.

The Rules govern the conduct of proceedings in the General Division (and in the Divisional Court and the Court of Appeal). They govern the conduct of parties to those proceedings. They are necessary to provide the procedural framework within which disputes in the Courts are handled -- to tell the parties how and when things must be done in the course of the lawsuit and to provide procedural safeguards throughout the process. As the nature of people's disputes is as varied and intricate as the nature of people's relationships, rules of procedure which must attempt to encompass as many eventualities as possible are necessarily intricate, too.

A General summary of the kinds of procedures which the Rules encompass follows. There are rules governing:

  1. General Matters
    • Time and provisions respecting forms and court documents
  2. Who the Parties Are
  3. How Proceedings are Started
  4. How Documents must be Served
  5. How Certain Matters my be Disposed of "Summarily" without a Trial
  6. The Pleadings (i.e. the claim, the response, and related documents)
  7. Pre-trial Disclosure
    • documentary discovery
    • oral examinations for discovery
    • inspection of property
    • medical examinations
  8. How Examinations Out-of-Court are to be Conducted
  9. Motions and Applications
  10. The Ways in Which Parties' Rights may be Preserved Pending the Trial
  11. Pre-trial Procedures
  12. Trials
  13. References
  14. Costs
  15. Orders and Judgments and How they are Enforced
  16. Appeals
  17. Proceedings in certain Particular Matters
    • e.g., family law matters, proceedings concerning minors, mortgage actions.

    Some thought, and a glance at the foregoing illustrates that some form of rules or regulations are necessary to deal with the areas mentioned, if litigation is to be conducted in an orderly fashion and with proper safeguards. It is also apparent, however, that a framework which endeavours to take into account all of these factors will contain within it the potential for built in delays, additional costs, and administrative headaches. Neither the Rules, themselves, nor the process by which they are made and changed should be so inflexible that adjustments cannot be made to counter such potential difficulties and to provide for adaptation to changing times.

    The Rules have the force of regulations and are made by a Rules Committees created under the Courts of Justice Act [110] . There is a Civil Rules Committee, a Family Law Rules Committee and a Criminal Rules Committee. The Committees are large, and representative of the diversity of the Province. They are representative of the Judiciary, the Ministry of the Attorney General and the Bar, but there are no representatives of the Public.

    Consistent with our view that the public needs to have a greater involvement in the civil justice system, we believe that the Rules Committees should contain public representation. We believe that the addition of the public to the rules making process will help to de-mystify that process for the public and may well lead to some de-mystification of the language of that process at the same time.

    RECOMMENDATION

    We recommend that the Courts of Justice Act be amended to provide for the addition of public representatives to the civil, family and criminal rules committees.

    It has also been suggested to the Review that the rule-making process needs to be made more streamlined and timely. Changes that might bring about efficiencies can be delayed as they pass through the formalized process currently in place. There are somewhere between 25 and 30 members on each of the Civil Rules Committee and the Family Law Rules Committee, and as mentioned previously, the Committees are representative of the various parts of the Province. It is inevitable that the decision making process will move more slowly with so many participants involved. At the same time, a broadly based consultation process is essential to the success of the endeavour. Efforts need to be made to streamline the rule-making process and to make it as timely and as efficient as possible.

    We have made a number of recommendations in this First Report which, if adopted, will require changes to the Rules. It is important that a working group be established to advise the Rules Committees with regard to the necessary rules changes that may be required to implement those recommendations.

    RECOMMENDATION:

    We recommend that a working group be established, as part of the implementation team and in conjunction with the civil and family rules committees, to deal with the rule changes that will emerge from the recommendations contained throughout this First Report.

    Access to the Rules by the general public is severely limited. Those wishing to obtain a copy for their own information or in order to represent themselves, report difficulty in obtaining the texts and note the high cost of doing so when they succeed. In addition, the forms referred to in the Rules are themselves not available to the public and must be obtained from legal stationers, that they are not found in many towns and cities of this province.

    If the civil court process is to be made more transparent and understandable to the public it is intended to serve, the Rules by which the system operates must be readily available in a reasonably comprehensible form. We make specific recommendations in this regard in the Communication chapter of this Report.

  18. Simplified Rules Procedure

    In 1993, a Simplified Rules of Civil Procedure Subcommittee of the Civil Rules Committee was formed ("the Simplified Rules Subcommittee"). It was formed at the request of the then Chief Justice of the Ontario Court of Justice and the then Deputy Attorney General in response a belief that the costs to the parties of lawsuits involving relatively modest sums was disproportionate to the amount of the claims involved. These costs were identified as a serious problem for both the lawyers and their clients.

    Lawyers and their clients, it was perceived, were discouraged from pursuing litigation involving smaller amounts because the costs of the litigation made it unprofitable for the lawyer and unproductive for the client.

    These sentiments were borne out by the deliberations of the Simplified Rules Subcommittee. It noted, for instance, that the Zuber Report investigations had demonstrated that, for the claims within the $25,000 monetary jurisdiction of the then District Court, winning litigant was left with only 20-30% of his or her judgment after paying the legal fees. It conducted its own research of a representative group of files in 6 different court centres with a view to determining the relationship between party and party costs and the size of judgments obtained. This latter research revealed the following:

    median amount claimed $31,700.57
    median judgment amount $15,166.95
    median party and party bill assessed $5,694.47
    median amount claimed for examinations $800.00

    Since party and party costs typically represent between 1/4 and 1/2 of the amount actually billed to a client, these figures suggest that in the greatest number of cases litigants are paying a significant portion of the amount recovered in legal fees, even after recovery of party and party costs. If those latter costs are taken at an average of 1/3 of the amount paid to the winning party's lawyer, that party is still paying approximately 2/3 of the amount of the judgment -- not necessarily to be equated with the amount recovered, it should be remembered -- as the cost of the litigation. Since there are at least two parties to litigation, and assuming the losing party has a similar legal bill (plus the party and party costs paid to the winner), it appears that from an overall perspective there is much more that the judgment amount being expended by the litigants in most cases (i.e., the median case). From this, it is easy to conclude that a more economical means of resolving these smaller disputes is necessary.

    That is precisely what the members of the Simplified Rules Subcommittee concluded. In their draft report dated December 1994, they state (at p. 4):

    In considering the causes of the problem of unaffordable litigation, we saw high lawyer fees as more a product of the problem than the cause of it. In General Division litigation involving small amounts, lawyers face a seemingly insoluble dilemma. If the lawyer does not invoke all of the procedures available, even if the cost effectiveness of those procedures is out of proportion to the amount involved, the lawyer may be accused of indifference to the client's interests or be exposed to an allegation of negligence. Alternatively, a lawyer simply may be unable to steer an inexpensive course because the opponent invokes all of the procedures available. We felt that, although the current Rules are admirably suited to litigation involving large sums of money, those same Rules, when applied to disputes over lesser sums of money, generate prohibitive costs.
    To find a way to make litigation more affordable, we were guided by two principles. The first was that it is the procedure and not the lawyers that should be regulated. Thus, we rejected imposing fixed limits on party and party costs or on solicitor and client costs. The second was a proportionality principle that there should be a relationship between the procedures available to pursue or defend a claim and the magnitude of that claim. We tried to reduce the costs by striking a balance between the expense of procedures before trial and the value of the potential outcome. We concluded that there should be a simplified procedure, perhaps more accurately, a truncated procedure, for the lower range of monetary and property claims.

    The lower range which the Simplified Rules Subcommittee settled upon was one the claim in question involves only money or property with a worth not exceeding $40,000. The fundamental changes proposed by the Subcommittee consist of the following:

    1. the elimination of oral examinations for discovery;
    2. the elimination of cross-examination on affidavits in interlocutory proceedings;
    3. a simpler, cheaper and faster method of getting cases on the trial list;
    4. a more limited pre-trial; and,
    5. a modified summary judgment procedure, linked with a new summary time-limited trial procedure.

    Of the foregoing proposals, that relating to the elimination of oral examinations for discovery is the most controversial. Indeed, it is quite controversial, particularly in the areas of the province outside of the large urban areas. Oral discoveries, as we have noted in the Discovery Chapter of this Report, are a central feature of the litigation culture in our system. In some quarters, the proposal is seen as an attempt to impose "a Toronto solution" upon the rest of the Province, the argument being that the litigation culture is different in Toronto than elsewhere and that non-Toronto lawyers can handle smaller non-Toronto cases efficiently and effectively under the Rules as they presently exist.

    There are strong arguments on both sides of this equation, to be sure. However, the Simplified Rules Subcommittee is comprised of judges, lawyers and administrators who are representative of the Province as a whole; and it consulted widely. It gave very careful consideration to all of the arguments, pro and con, on the discovery issue. We quote at length from the Subcommittee's very thorough conclusions in this regard [111] :

    "The elimination of the examination for discovery may be the most controversial aspect of the committee's proposal. We considered at length the pros and cons of eliminating discovery. We felt that the elimination of discovery would both directly and indirectly reduce the costs of litigation. Obviously and directly, eliminating discoveries would eliminate the costs of the discovery itself, but a discovery does not consist only of a few hours in an official examiner's office. There is the preparation for it, including discussions with the client and, perhaps, some of the witnesses; the scheduling and rescheduling of the examinations; the expense of travel time; the conduct of the examination (and it is plain that the examinations themselves are getting longer, often much longer); the advising of the client afterwards; the purchase and analysis of the transcripts; the answering of undertakings; and follow-up examinations. The direct costs to the client for discovery are substantial. Indirectly, eliminating discoveries would eliminate the commonly occurring interlocutory motions resulting from difficulties in scheduling discoveries and from refusals to answer discovery questions or undertakings in a timely fashion.
    Some lawyers see discovery as essential. We do not dispute that discovery has advantages, but we do not agree that its advantages make discovery essential for every case, particularly those at the lower end of the monetary range. In many lawsuits, both parties know their opponent's case before the action is started. Even though there is no discovery, neither party need be taken by surprise or be unable to analyze the merits of his or her opponent's position. It is to be borne in mind that most people are able to settle their disputes without any civil proceedings, that the small claims court functions satisfactorily without discovery, as does the arbitration of labour matters and other disputes, some of which involve large sums of money and complicated issues. Litigation in other jurisdictions functions satisfactorily without discovery. We were told that settlement of civil litigation throughout the world averages about the same regardless of the particulars of the rules of civil procedure.
    The elimination of discovery may mean that some litigants will be less well-prepared to establish their own or to meet their opponent's case at trial; it would be idle to suggest otherwise. But that circumstance must be measured against the cost of the discovery and the magnitude of the money or property in issue. And it must be measured against the standard of whether justice can be done without discovery. We are satisfied that, for the defined range of claims, the simplified procedure will be adequate and that the usual and more elaborate procedure is not necessary to do justice."
    The Civil Justice Review agrees.
  19. RECOMMENDATION

    We recommend the adoption of the proposal of the Simplified Rules of Civil Procedure Committee for all cases in which the claim if for money or property of a worth not exceeding $40,000.


Footnotes:

[110] See generally, the Courts of Justice Act, supra, sections 65-70.

[111] Draft Report of the Simplified Rules of Civil Procedure Committee, December 1994, pp. 6-7. The Committee held 17 meetings itself and attended 13 additional consultation meetings across the Province.