The defendant who lost has to pay the plaintiff his/her damages and costs, as well as the defendant's legal costs of $100,000 and disbursements of $30,000. In other words, the cost of defending the plaintiff's claim cost the defendant $280,000 in costs and disbursements alone–a number nearly twice the amount of the plaintiff's damages. While costs are meant to discourage frivolous litigation, the costs should not be so disproportionate to the relief being claimed so as to lead to unfairness.
To contain costs, Rule 76 (i.e. the simplified procedure) was introduced to streamline claims of lesser monetary value. The idea was that if a lawsuit could be brought to court as quickly as possible, using summary examinations for discovery and a summary trial, the costs of such claims would be proportionate to the relief being sought.
The problem with the simplified procedure, though, is that litigants are not using it. Instead, especially in personal injury cases, plaintiffs are routinely claiming for an insured defendant's policy limit (usually $1 Million or $2 Million) using the ordinary procedure, even for claims where the plaintiff's damages are clearly within the jurisdiction of the simplified procedure or, even worse, the small claims court.
To remedy litigants' apparent reluctance to use the simplified procedure, the Ministry of the Attorney General of Ontario and the provincial Civil Rules Committee have proposed changes to make the simplified procedure more enticing. These changes are being touted as creating a “new and improved” Rule 76. However, whether or not such changes will have the impact as intended remains to be seen.
The Proposed Changes to Rule 76
Background to the changes
A revamp of Rule 76 has been in play since at least October 2016... |
A revamp of Rule 76 has been in play since at least October 2016 (when the Civil Rules Committee began consultations to reform the simplified procedure). In the Fall of 2018, a proposal was approved in principle, with the final wording of the new Rule to be sent to the Attorney General for approval. The proposal has since been figuratively sitting on the Attorney General's desk since prior to the 2018 election.
Considering the Ministry of the Attorney General has been holding information sessions throughout Ontario to obtain feedback on the proposed changes to Rule 76, it seems as though the government is actively studying and potentially moving forward on the issue. If so, then it is simply a matter of time before the proposal is signed into law.
Increase to the monetary jurisdiction
One of the proposed Rule 76 changes is for the monetary jurisdiction of the simplified procedure to be increased from $100,000 to $200,000. As anyone who practices personal injury knows, the new Rule should consequently cover most of the commodity-type, run-of-the-mill bodily injury claims in Ontario.
A criticism, however, is that this presupposes that plaintiffs and their lawyers will have the foresight to assess the value of the claims prior to the Statement of Claim being issued. It also assumes that plaintiffs and their lawyers will be willing to admit, at the outset of the claim, that damages will not exceed $200,000–an admission that clearly prejudices the bargaining position of plaintiffs who routinely claim for policy limits rather than cap damages at a lower amount.
Considering very few bodily injury claims are currently commenced in the existing simplified procedure (despite awards and settlements clearly placing such claims within the current monetary jurisdiction of the Rule), it may be fanciful thinking to believe litigants will use the new Rule simply because the monetary jurisdiction has been increased.
Limits on expert evidence
...limit the number of experts (that the parties can rely upon at trial) to three... |
Another proposed change to Rule 76 is to limit the number of experts (that the parties can rely upon at trial) to three. Examinations-in-chief would be required to be done by affidavit, meaning the only oral evidence that would be permitted at trial would be cross-examination and, if necessary a witness' rehabilitation by way of re-examination–certainly not something that would help plaintiffs or their cases.
These new rules regarding experts would further discourage plaintiffs from using the new Rule. This is especially so for plaintiff lawyers whose practice involves hiring as many experts as reasonable imagination would allow so as to inundate their clients' claims with substantiating evidence. Having a hard limit of three experts would require such practice to abandoned, which seems unlikely.
Limits on costs and disbursements
Further complicating the matter is proposed changes with respect to costs. Under the new Rule 76, a litigant's costs would be capped at $50,000, with disbursements capped at $25,000. These caps do not seem wholly unreasonable, especially since trials under the new simplified procedure would be strictly limited to no more than five days.
However, although these caps would contain costs, they would also certainly discourage the use of the Rule–especially by lawyers who make a practice of increasing their clients' damages by retaining expensive experts. Ironically, these caps on costs could drive litigants to continue to use the ordinary procedure, which would have the effect on keeping costs high rather than contained.
Elimination of civil juries
...eliminates a litigant's right to a jury trial for claims under $200,000... |
All that being said, one key aspect of the new Rule 76 that would encourage plaintiffs to commence their claims under the simplified procedure is the prohibition of juries–the new simplified procedure eliminates a litigant's right to a jury trial for claims under $200,000. This will require an amendment to section 108 of the Courts of Justice Act (meaning the proposed changes will require approval by both the Civil Rules Committee as well as the government of the day).
As anyone who practices in personal injury litigation knows, defendants and insurers love to use juries, whereas plaintiffs rarely file a jury notice. The reason is simple–juries tend to assess damages significantly lower than trial judges. It is, therefore, no secret why personal injury defendants almost always demand the case be heard by a jury. Plaintiffs who commence actions under the new Rule 76 would consequently be taking away a defendant's right to have the matter heard by a jury–a tactic that, based upon trial award statistics, would obviously benefit the plaintiff to the detriment of the defendant.
Conclusion
The new and supposedly improved Rule 76 is meant to deal with the backlog of claims in the ordinary procedure, contain costs by streamlining lawsuits, and encourage personal injury plaintiffs to use the simplified procedure by eliminating civil juries.
Whether any plaintiffs will actually use the simplified procedure remains to be seen, as there are clear pros and cons to the proposed changes. Indeed, it is likely the changes will all be for nought (at least when it comes to personal injury cases) if the current practice of plaintiffs claiming for a defendant's policy limit remains common practice. It is also likely that the limitations on expert evidence will outweigh any benefit a plaintiff may receive by avoiding the risk of a low jury award.
One thing is clear, however–the Civil Rules Committee has determined the current status quo is not acceptable and is simply waiting for the government to make the proposed changes.
