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Civil Litigation

Real Estate Law

Estate Law

Corporate Service Law

  • The Courts and their Jurisdiction

  • Actions and Applications

  • Court Officials

  • Parties to an Action

  • Commencing an Action - Pleadings

  • The Discovery Plan

  • Discovery of Documents

  • Examinations for Discovery

  • Mandatory Mediation

  • Settlement Conference

  • Pre-Trials

  • Trials

  • Costs Awarded in the Litigation

  • Offers to Settle

The Courts and their Jurisdiction


The Courts within Ontario are created and governed by the Courts of Justice Act.  This Act creates a series of Courts and Court officials.  As well, it defines the monetary jurisdiction of each Court and provides for the administrative and geographic areas for some of the Courts. 


The civil litigation Courts in Ontario are essentially divided into four.  First is the Small Claims Court which, at present, has jurisdiction up to $35,000.00.  If the amount in issue is greater than $35,000.00, you may issue a claim in the Small Claims Court provided you agree to waive any award greater than $35,000.00.  Given the costs and time of litigating in the Courts, you might find that giving up part of the claim has a net economic advantage in the end. 


The next three Courts are all branches of the Superior Court of Justice.


The first branch is the former General Division Court of Justice which is continued as the Court of record and simply referred to as the Superior Court of Justice.  Most civil litigation proceedings are commenced in this Court which is not bound by any monetary jurisdiction.  As a rule, a single Judge presides over the steps within this branch.  


The second branch, the Divisional Court, has jurisdiction to hear certain administrative law matters and to hear appeals from lower Courts where the total amount involved is less than $50,000.00.  As a rule, three Judges preside at Divisional Court hearings, while a single Judge may preside at interim matters such as motions.  Judges appointed to the Superior Court of Justice will also sit, from time to time, as Judges of the Divisional Court. 


The last branch is the Court of Appeal for Ontario which hears appeals from both the Superior Court of Justice and from the Divisional Court.  The Courts of Justice Act sets forth when appeals are available.  Of particular concern is whether the right of appeal is automatic or first requires permission of the Court.


Actions and Applications


Civil litigation proceedings in the Superior Court will fall into one of two categories.  The most common form of proceeding is referred to as an “action”.  The other is referred to as an “application”.  The initial difference between the two is substantial.  It is always open for the Court to convert an application into an action.


Most claims may be initiated by way of an action.  The Rules of Civil Procedure set forth certain claims which may be initiated as an application.  As well, some Provincial statutes provide for a resolution of certain issues by means of an application to the Court.  For example, the interpretation of an agreement, such as a lease, is well suited for an application where the amount of evidence to be tendered is not substantial nor is it likely to be in dispute.  The collection of an outstanding account must be commenced as an action.  In some cases, the matter may start by way of application and then be converted to an action.


Depending on the type of case presented, there may be a choice as to whether you should proceed by way of application or action.  Even when there is a choice, consideration of your particular case may dictate that one process is more advantageous.  Often, the decision on how to start a case is dictated by the result intended, and the expectation of how that result will be generated.  Depending on the type of case, consideration is given to whether the matter should be initiated in the Commercial Court (discussed below) or regular Court.



Civil litigation actions within the Superior Court are further split into three types of lawsuits. 


First, there is the ordinary action.  Here, the pleadings are exchanged, discoveries are conducted, and the matter will proceed to trial after completion of certain other interim steps.  This method is available in all cases where the amount in issue is greater than $200,000.00.  There are certain claims which must fall under the ordinary action, even though they involve less than $200,000.00.  More will be said about this procedure below. 


Second, where the amount in issue is less than $200,000.00, the action must follow the Simplified Rules under Rule 76 of the Rules of Civil Procedure.  This is designed to fast track the case, avoid certain steps, and lower the total costs of litigation.  The method of trial differs from those methods available under the ordinary procedure.  The Simplified Rules are optional for cases exceeding $200,000.00 provided that the defendant does not object.  The Simplified Rules do not apply to actions under the Class Proceedings Act, 1992, actions under the Construction Lien Act (except trust claims), or actions under Rule 77.


Third, there is the Commercial Court branch of the Superior Court which, as the name implies, hears certain commercial or business litigation matters.  It is situated in Toronto.  Commencing any proceeding in the Commercial Court, as opposed to being in a standard Court, is optional.  Often, the Commercial Court can streamline and better manage commercial litigation matters with greater speed.  At present, there must be a connection to Toronto to allow the action to be commenced in the Commercial Court.  For example, one of the parties must be in Toronto.


Court Officials


There are various Court Officials, each of whom have a range of authority, depending on to which Court they are appointed, and in what role. 


For most civil litigation in the Superior Court, the important categories are the Court Registrars, Assessment Officers, Masters and then Judges. 


The Registrars administer the particular office, whether it be the Court of Appeal, Divisional Court, or a local branch of the Superior Court of Justice.  They have the power to grant certain Orders.  In certain circumstances, they can award default judgment and costs to a party. 


The Assessment Officers conduct hearings to determine the amount of costs which one party should pay to another, or the amount which a client should pay to his or her lawyer.  Those hearings may be conducted in an informal manner, or with the formality of a proper trial. 


Masters are officials who hear many motions within the context of an action and perform other duties which are assigned to them.  They have expertise in the procedural aspects of actions.  In some scenarios, they can determine the outcome of an action by awarding judgment to one of the parties.  In a situation such as a construction lien action which is held in Toronto, it is common that the action, including the trial, will be heard by a Master. 


The last category are the Judges of the Superior Court of Justice.  In essence, they have no limits on their jurisdiction.


Parties to an Action


We start with a description of the people who are involved in the action (the parties) since they are often referred to by their status as a party. 


The person or corporation that initiates the lawsuit is called the plaintiff. 


The person or corporation against whom the plaintiff seeks relief is called the defendant. 


Under certain circumstances, a defendant can join other persons or corporations against whom the defendant seeks relief, but who are not already parties to the action.  Such additional person or corporation is called a third party.  Here, the defendant is essentially saying that if it is liable to the plaintiff, then it is really due to the fault of the third party who should be found liable to the defendant. 


Third parties can also join other persons or corporations against whom they seek relief, but who are not already parties to the action.  These other parties are called fourth parties.  Again, each level is saying that the true fault lies with the next person.  This chain is usually due to the fact that the plaintiff had no direct connection or relationship to the third party, and had no direct claim against that third party. 


The goal is to ensure that all of the proper persons are before the Court for the adjudication on the relevant issues.


Commencing an Action - Pleadings


Whether you are initiating a claim against another person, or responding to a claim brought against you, there is always a set of documents that serve to define the issues which are to be put before the Court.  Those documents are referred to as the pleadings.  Pleadings will set out the factual allegations of each party so that the issues can be properly defined.  As the pleadings define the issues, they, by implication, determine the scope of relevant evidence that may be required or permitted throughout the litigation process.  Though the action may involve many documents and there may be some interim proceedings before trial, you should expect that the pleadings will be the only material that the Trial Judge will read before actually starting the Trial. 


Within the action, the first document most commonly generated within the group of pleadings is the Statement of Claim.  It names the parties to the action, namely the Plaintiff and the Defendant.  There is a brief portion which identifies the parties and, in most cases, the city or province where they reside.  The identification of the residence is important as, under the Rules of Civil Procedure, there may be certain implications if either the Plaintiff or the Defendant is not resident in Ontario. 


The Statement of Claim will then set out the factual basis for the claim being made against the Defendant and then proceed to detail the amount sought from the Defendant.  In order to properly prepare the Statement of Claim, it is important that you work with us to deliver all of the material which might be required to properly draft the allegations.  This is a somewhat interactive process and one that we will guide you through. 


Once the Statement of Claim is completed, it is issued in the appropriate Court office.  In many instances, this can be done electronically.  For some Claims, such as under the Construction Lien Act, it must be done by physically taking the claim (and the related documents) to the Court.  You should appreciate that, as a rule, the Statement of Claim then becomes a public document. 

As an alternative to the Statement of Claim, the first document may be a Notice of Action.  The Notice of Action lacks the detail and allegations required in a Statement of Claim.  The primary purpose of the Notice of Action is to start the litigation in a very short time.  For example, if you were faced with a limitation problem where the action must be commenced within the next day or two, then the Notice of Action would satisfy that obligation.  The Claim, with the full details, would then follow within 30 days after the Notice of Action is issued. 


Following the Statement of Claim being issued, it must be served upon each Defendant.  Normally, the Statement of Claim will be served by a process server handing it directly to the Defendant.  The Rules of Civil Procedure provide for alternative methods of service.  The important point is to have the document served in accordance with the Rules of Civil Procedure.  Where Defendants make themselves unavailable and difficult to serve, we would apply to the Court for permission to serve the Statement of Claim in some other manner.  This is referred to as substituted service of the Statement of Claim.  The Court may permit the Statement of Claim to be sent by ordinary mail, provided the Court is first satisfied that you could not effect personal service and that the Statement of Claim will come to the attention of the Defendant if sent by that method. 


Once served, the Defendant has various options.  They may file a Notice of Intent to Defend, which automatically gives them an extra 10 days to defend against the Statement of Claim.  They may challenge whether the allegations in the Statement of Claim are complete and properly particularize the claim being made.  They may challenge whether the Statement of Claim discloses a legal cause of action.  They may request that the Plaintiff produce any document which is referred to in the Statement of Claim.  Each of these challenges or requests may delay their delivery of a Statement of Defence.  If no challenges are not made, then the Statement of Defence is to be delivered within 20 days after the Defendant has been served (or 30 days if they serve the Notice of Intent to Defend).  If the Defendant is not resident in Ontario, then that time period is extended.  The amount of extension depends on whether the Defendant resides in another province or in another country. 


If the Defendant does not respond to the Statement of Claim within the required time frame, the Plaintiff may proceed to note the Defendant in default for failure to deliver a defence.  This is the first step in closing the door on the Defendant and proceeding to obtain judgment.  Once completed, the Plaintiff might ask the Registrar to sign judgment against the Defendant.  Depending on the nature of the Claim, the Registrar may have the authority to award default judgment without any evidence being submitted.  Thus, the clarity and completeness of the pleading in the Claim is important.  In cases where the Registrar does not have the authority to award default judgment, or if the Registrar declines for some reason, then the Plaintiff might be required to assemble some evidence and submit same to a Master or Judge who may award judgment based upon the Statement of Claim and the evidence filed.  In some instances, it may still be necessary to have an actual trial before a Judge in order to satisfy the Judge as to the Plaintiff’s claim and amount requested.  By way of example, if the claim is based upon a simple invoice for materials sold and not paid for, then the Registrar ought to award default judgment.  At the other end of the spectrum, consider a claim for defamation and general damages.  A Judge would want to hear evidence from the parties as to the harm caused so that the damages could be assessed. 


For a Defendant who wishes to respond, there are several options available.  First, they must address the Statement of Claim.  As a rule, they will respond by denying many of the allegations made against them in the Statement of Claim.  Then, they ought to be setting out their factual allegations as to why they are not liable and/or why the amounts claimed are not appropriate. 


In some cases, the response of the Defendant is not merely to deny the claim of the Plaintiff, but to set out its own claim against the Plaintiff.  That claim need not be related to the allegations made by the Plaintiff or the reason why they have not given the Plaintiff what was demanded.  The Defendant may not only seek to avoid payment to the Plaintiff, or reduce the amount owing, but, in addition, may seek an even larger amount from the Plaintiff on the basis of something totally different. 


When a Defendant makes a Counterclaim against the Plaintiff, the titles of the parties expand somewhat, as their respective roles change.  The Defendant becomes the Plaintiff by Counterclaim, while the Plaintiff also becomes the Defendant to the Counterclaim.  Where the Plaintiff is met with a counterclaim, then that Plaintiff has an obligation to deliver a Statement of Defence to the Counterclaim. 


In some cases, a Defendant may allege that other persons were responsible for the Defendant being liable to the Plaintiff.  For example, consider a scenario where a home owner hires a contractor to supply and install a wood floor.  The contractor purchases the floor from a supplier, and then hires a labourer to install the floor.  Then, the home owner finds the floor is improperly installed and the material defective. The home owner sues the contractor with whom it had the agreement.  While the contractor may wish to dispute the claim, the contractor may also want to third party the person who supplied the wood flooring for supplying a defective product, and also the labourer for improper installation.  To further complicate matters, the flooring supplier and the labourer may then blame each other. 


In the above scenario, we would have the home owner, as the Plaintiff, commencing the action against the contractor, as the Defendant.  Then the floor supplier and the labourer are both added as Third Parties, who then have a Crossclaim against each other. 


The addition of other persons as parties serves to protect those who are not liable on their own.  As well, it gives the Court the opportunity to adjudicate fully and completely on the issues.  At the same time, it has the risk of greatly increasing the total time and cost it takes for any action to proceed through the Court. 


The goal of the pleadings is to define the issues to be tried before the Court.  Depending on the allegations contained in the Statement of Defence, the Plaintiff may want to respond by preparing and serving a document entitled a Reply.  The Reply does not repeat the allegations contained in the Statement of Claim.  A Reply is not necessary if it is merely to deny the allegations in the Statement of Defence.  A Reply is necessary if the Statement of Defence alleges events beyond merely denying what was originally alleged in the Statement of Claim.  Continuing with the wood floor example above, the home owner may allege an agreement to supply and install four inch boards but only three inch boards were actually installed.  The contractor might allege a change order to reduce the size from four to three.  Here, the home owner, as the Plaintiff, would deliver a Reply denying the change order. 


Once the exchange of pleadings is completed, the next step in the litigation process is the preparation of a Discovery Plan, then the discovery of documents and the discovery of the parties.


The Discovery Plan


The Courts are regularly exploring and implementing methods by which the time and cost of civil litigation can be reduced.  One method to achieve this goal has been the introduction of the Discovery Plan under Rule 29.1.03 of the Ontario Rules of Civil Procedure. 

This particular Rule applies whenever a party seeks to obtain evidence through discovery of documents, examination for discovery or inspection of property.  The Discovery Plan is to be agreed upon before the earlier of 60 days after pleadings are complete, and the attempt to obtain evidence.  Briefly, the Discovery Plan should outline the scope of the document discovery, when affidavits of documents shall be served, how the documents will be exchanged, who will be produced for oral examinations, including the time and duration, and the listing of other information which will make the process more expeditious and cost-effective. 


As the litigation proceeds, the parties have an obligation to update the Discovery Plan. 

A problem may arise when the parties do not agree on the Discovery Plan.  There is no immediate solution to that problem, though, at a minimum, the parties ought to agree as to their disagreement and respective scope of discovery.  There may be instances where that is the best the parties can do. 


There is a provision that, if the parties have not agreed upon a Discovery Plan, then, on any motion which deals with one of the areas of discovery (such as discovery of documents or the oral examinations), the Court may refuse to grant any relief to the moving party, or award costs to the winning party.  The difficulty with that provision is it may penalize the party who has been trying to resolve the Discovery Plan, and who may be trying to move things forward, while implicitly awarding a party who has not openly co-operated.  Hopefully, the Court will intervene and, by using one of their many tools, encourage the non-responsive party to more fully co-operate.


Discovery of Documents


The next step in the discovery process is the production of documents by each party.  This means the gathering of, and production of, all documents which are relevant to any issue involved in the litigation.  The individual documents are then listed in a document known as an Affidavit of Documents. 


Another method by which the Court Rules have sought to reduce the total cost of litigation is the means by which documents are to be produced.  For many years, production was required if the document ‘related’ to any matter in issue.  The common application of this phrase was if there was any “semblance of relevancy” to any issue.  It was a very broad application and often tended to produce documents that touched upon an issue but otherwise had no probative value in the course of any action.  Now, documents are to be produced if they are ‘relevant’ to any matter in issue.  In theory, this should mean that the document and the issue have some type of tangible connection, and not merely be close to each other. 


The second method to reduce cost is known as “proportionality”.  In order to curb the unending approach of document production, and to also curtail unending questions on an examination for discovery, the Rules have set out a concept of proportionality.  Here, the Court can look at the time that may be required to answer a question or produce the document, the expense involved, the prejudice involved, the overall progress of the action, and whether the examining party can obtain the information on its own.  The Rule refers to the concept of what is reasonable and what is justified.  Admittedly, this is a mixture of both an objective and subjective view of the case. 


The Affidavit of Documents is broken into 3 parts. 


First, the party will list all documents in their possession, control, or power which are relevant to any matter in issue and which the party agrees to produce to the other parties. 


Second, the party will list documents in their possession or control which are relevant, but which the party will not produce.  Some examples are below.


Third, the party will list document that are relevant to any matter in issue, but cannot be produced for certain reasons.  Again, some examples are below.


If the action is proceeding under the Simplified Rules, then there is a fourth part, where the party must list, to the best of their ability, the names and addresses of persons who might reasonably be expected to have knowledge of the issues in the action.  Listing a person in this Schedule does not mean that the person will be a witness at trial, but merely that the person has knowledge of an issue in the action.  While the Rule does not state how that person came to have knowledge, or the extent of that knowledge, a pragmatic approach ought to be taken.  Consider whether the person has direct, first hand knowledge, as opposed to learning the event from yourself.


A few comments about the Schedule “A” documents.  The goal is for full, fair and open disclosure of documents.  The first issue is whether the document is relevant to an issue.  This includes an issue raised by you or any other party.  We do not consider whether the document is favourable or unfavourable to one party.  The relevancy is based upon the pleadings discussed above.  If there is any doubt as to whether a document is relevant, it is best that we review it and then make that decision. 


Another Schedule “A” issue is whether the document is in your possession, control or power.  The first criterion, possession, is obvious.  The other two, control or power, are not always that clear.  As an example, financial statements might be stored in an off-site storage facility, or be with your accountant.  Though not in your possession, you would have the ability to bring them into your possession.  The Rules of Civil Procedure stop short of making you obtain a document not in your possession if the other party has a reasonable ability to obtain possession on their own. 


The next part is Schedule “B”.  Documents are to be listed, though not produced if there is some form of privilege attached.  The most common example would be correspondence between you and your lawyer wherein legal advice is sought or received.  Another example might be a letter containing a settlement proposal to the other party.  All of these should be reviewed to determine whether they are relevant and under which Schedule they should be listed. 


The third part, Schedule “C”, is to list a document which normally would be under Schedule “A” but, for some reason, cannot be produced.  Common instances of Schedule “C” documents are documents which might have been lost.  Admittedly, it may be difficult to recall and then to properly list the documents in Schedule “C”.  Even with best efforts, we might be obliged to use generic references, such as “text  messages from A to B”.


Completion of the Affidavit of Documents is impossible without a clear understanding of whether an item should be considered a document within the Rules of Civil Procedure.  The catch is the Rules do not actually define the term “document”.  Rather, and to avoid some confusion, they state what is to be included within the definition.  One would expect that letters and agreements are clearly to be considered documents.  As well, books of account, cheques, invoices and delivery receipts are documents.  Over the years, the items to be included have expanded to sound recording, videotape and data stored electronically.  You must keep in mind that the goal is for full and fair disclosure of the information. 


Where an individual person is a party, then the issue of whether a document is in their possession, power or control should be fairly easy to answer.  Where a party is a corporation, then the person nominated to complete the Affidavit of Documents on behalf of the corporation must make reasonable enquiry from other persons who might have documents relevant to the action.  For example, consider a construction case where the project manager has many documents relating to the progress of the project, while the accounting department has documents relating to the costs and invoices, while the drafting department may have drawings or plans.  Each of the departments and, indeed, each of the employees, must be considered and perhaps canvassed to determine if they have documents. 


It is not uncommon that, during the litigation, a party realizes or finds a document that is relevant and not previously produced.  This may occur from a simple mistake.  It may also occur when the issues change due to the flow within the action.  Documents which were not relevant to issues early in the action may become relevant when the issues change.  When that happens, you have a duty to produce that newly found document.  Usually, this is not a problem provided that the other side has a reasonable opportunity to review the document and, if appropriate, ask questions about the document. 


Not disclosing a relevant document can generate various problems.  If the document is favourable to your case, the Court might not allow you to rely upon the document at trial.  If the document is unfavourable and not produced, then you run a serious risk of being reprimanded by the Court.  The reprimand could be very costly.  At all times, the Court expects parties, and their counsel, to act with honesty, diligence and integrity. 


Once the Affidavit of Documents is completed, the Rules of Civil Procedure provide that it is to be served on the other parties.  They then have an opportunity to inspect all of the Schedule A documents.  Often, counsel co-operate by making copies of the documents and sending them to the other side.  Subject to the volume, it is likely that a reasonable photocopy charge would be billed to the other side. 


The Simplified Rules of the Rules of Civil Procedure mandates a slight difference from the ordinary procedure.  In addition to serving the Affidavit of Documents, each party is obliged to serve a copy of their Schedule “A” documents.


Examinations for Discovery


The first part of the discovery process was the documentary stage which was completed by the exchange of the Affidavit of Documents.  The second part is the examination of the opposing parties.  Usually, this is conducted by an oral examination.  Where an action is not in the Simplified Rules, questions might be submitted in writing and answered in writing. 


The examination is recorded by a reporter who can then transcribe the examination if requested.  The examination may be in a private office, or may be at the offices of any number of reporting services.  Often, it is an informal process of the lawyers sitting down with one of the parties and asking questions of that party.  While the process is somewhat informal, and sometimes relaxed, never disregard the importance of the process and the fact that each word spoken is being recorded. 


There are several goals sought in conducting an oral examination. 

-           Prior to trial, each party will learn something about the evidence that the other party intends to rely upon. 

-           It will enable each party to examine and assess the strengths and weaknesses of the other party’s case. 

-           By learning the evidence to be relied upon, and the strengths and weaknesses, the parties may be more inclined to settle some or all of the issues. 

-           To avoid being surprised at trial. 


There are rules to be followed by parties being examined.  The most important rule being that one should answer honestly.  Another rule is to not answer any question unless you clearly understand the question.  As we near the date for any examination, we will review the procedure in detail and set out all of the rules with meaningful examples. 


During the oral examination for discovery, you might be asked to search for a particular document, or be requested to ask someone else a particular question.  We will deal with all of those scenarios and, where appropriate, have you complete any task agreed upon. 


Oral examinations can be time consuming and costly.  Proper preparation will serve to minimize the total time required.  To force counsel to properly prepare, several years ago, the Courts introduced a time limit for oral examinations. 


Rule 31 sets a time limit for the examination for discovery in an ordinary action.  Here, no party shall examine any other persons or parties for more than seven hours.  This is not a particular concern where there are only two parties to an action.  However, odd results can take place with multiple parties as there is no limitation on how long a party may be examined.  Where there is one Plaintiff, and two Defendants, the Plaintiff must divide his examination time of seven hours between the two Defendants, while each Defendant may have their own seven hours to examine the Plaintiff.  While the Rule was designed to force parties to quickly move to the substance of the litigation, it has an unfair side effect of allowing some considerably more time than others. 


As to whether the seven hours is far more than required, or barely scratches the surface, all depends upon the particular case.  The Rules contain a provision for the Court to allow more than the seven hours. For example, the Court may allow more when it considers the amount of money in issue, the complexity of the action, and the amount of time that ought to be necessary.  The Court will also consider the financial position of each party.  This is an important and realistic safeguard to protect parties who are on a strict budget from the tactics of those who engage in litigation without financial constraints.  The Court can also consider the conduct of the party in determining if the time should be extended. 


The time limit forces counsel to plan their tactics and strategy ahead of time, and not waste time or money on matters of little or no consequence. 


All too often, the questions asked on oral examinations, and the documents to be produced, were far reaching, time consuming to answer, and not necessarily of any direct benefit.  It would not be uncommon for one party to have hundreds of documents, yet at trial only rely upon a dozen.  Nor would it be uncommon for a party to have been asked hundreds of questions on the examination, yet only a few dozen were used at trial.  Along the way, many counsel took the approach of “leave no stone unturned” as opposed to the pragmatic approach of “get in, get what you need, and get out”. 


If your action was commenced under the Simplified Rules of the Rules of Civil Procedure, then oral examinations are limited to 4 hours.  There is no option for written examinations.


Mandatory Mediation


Throughout, the parties are always encouraged to consider and negotiate a settlement of some or all of the issues raised in the action.  This goal is never absent during the course of your legal representation. 


If you are party to an action commenced in Toronto, and some other jurisdictions, then at one point it will be required that you attend a mediation session.  While there is latitude in selecting a mediation date, it must be completed within 180 days after a defence has been filed. 


The time frame of 180 days presumes that documentary production has been completed as required by the Rules.  However, if the documentary production has been delayed, that may delay the mediation.


In a mediation proceeding, the mediator does not have the power to force any resolution or decision upon the parties.  This differs from an arbitration proceeding where the arbitrator can make decisions which are binding upon the parties. 


There are two methods employed to select a mediator. 


The parties may agree upon a particular person to act as the mediator.  There is a large pool of retired judges and senior lawyers available to be retained as  private mediators.  Proper selection can ensure that the mediator has particular expertise in the areas of law which your case is within. 


As an alternative, and where the parties do not agree upon a private mediator, the Court has a roster of approved mediators, one of whom will be assigned to your file.  There are some drawbacks to have a roster mediator appointed .  The mediator, while learned in the skills of mediation, may not be a lawyer.  Then, even if a lawyer, may not have the particular experience in the same area of law of your action. 


The goal of the mediation session is to draw the parties closer together so that they resolve some or all of the action.  The techniques employed by mediators differ from each other. 


The process involves encouraging both parties to depart from their position towards a compromise.  Sometimes it involves convincing each party to better understand and appreciate the view taken by the other party.  Leaving one’s own view for a more independent or objective view is not always easy.  However, when the parties appear before the Trial Judge, they will clearly be subject to an objective view, but with a much greater risk and potential cost. 


The reality of litigation is that there is a cost to winning and seldom any guarantee of the result.  A settlement can avoid further cost, and put certainty to the outcome.  It has the potential for beneficial results.  At the same time, it is not right for everyone in every scenario. 


A mediation session would never be productive if each party felt hindered in having a discussion for fear that whatever was said might be used against them.  To eliminate that concern, or at least reduce that concern, the Court Rules provide that the mediation session is confidential and conducted without prejudice, meaning that whatever one says, it cannot be directly used against them. 


In some instances, the open and frank discussion between the parties greatly helps to promote a compromise.  Unfortunately, there is no guarantee that some of this discussion will not assist the other party in gathering information to help them should the matter proceed to trial.  At first blush, this seems to be greatly unfair.  However, keep in mind that the foundation of the judicial system is for full and fair disclosure.  Thus, the disclosure at the mediation session might actually be something that ought to be disclosed in any event.


A successful mediation can have significant benefits for the total cost of the litigation.  However, there are costs in completing the mediation session.  If the mediator is drawn from the Court roster, then the fees are set by the Court.  The initial cost is based upon a mediation session up to 3 hours, and includes the preparation for the mediation.  The cost is then modified by the number of parties involved.  If the parties agree to continue past the 3 hours, an additional charge is levied, usually on an hourly basis.  Whether the parties wish to continue often depends upon the results achieved in the first 3 hours. 


Where the parties select a private mediator, then the hourly rate is set by that mediator.  The hours charged may include the preparation.  There may not be any minimum or maximum time set for the mediation.  As with any other arrangement, one wants to have a fairly good understanding in advance as to the potential charges. 


Another cost to the mediation is the location where it will be held.  It is common that private court reporting services rent out their rooms to accommodate the mediation.  This may involve one room for each party, plus a common larger room to hold all of the parties.  The actual number of the rooms depends on the technique employed by the mediator. 


Prior to the hearing, a document entitled Mediation Brief is assembled, which will set out the issues and positions of each party.  Also to be included will be documents which are very relevant to the issues and the mediation session.  This is delivered to the mediator and the other parties.  As expected, there is a cost to preparing this document.  However, there is a benefit in that it allows each party to have a more global view of their case and the other party’s case. 


Save for rules as to confidentiality and civility towards each other, there are no specific rules on how any particular mediator may conduct the mediation.  The mediator may ask that all parties first meet in one room, and each be afforded time to make an opening statement.  The mediator may start an open discussion between them.  Alternatively, the mediator may split them into separate rooms and speak privately to each side, conveying the views and opinions of each side, all while trying to work towards a compromise. 


A few comments about arbitration are worthwhile.  In some instances, the arbitration could be mandatory, where, for example, it is required pursuant to the terms of an agreement between the parties. In other cases, it is an option, but would require the consent of all parties.  There are benefits and detriments to any arbitration process.  Even though litigation can, initially, move quickly, in reality, it often moves slowly through the Court system.  By moving towards private arbitration, there is an opportunity to greatly reduce the total time for a resolution.  By selecting private arbitration, there will be the cost of the arbitrator and the facilities, all of which could become substantial.  This is weighed against the relatively free access to the Courts and Judicial Officers.  Where there are a few complex issues of law to be considered, then expediting the process to be resolved by a Judge may be the best avenue.  On the other hand, where there are numerous discrete factual issues to be resolved, then the total cost and time before a single arbitrator may be more practical.  Given that many arbitrators are retired judges and masters, then the wealth of knowledge behind the arbitration may be greater than appearing before a current sitting Judge.  All of these are topics to explore in the quest to protect your case in an efficient and effective manner.


Settlement Conference


If the action has been commenced under the Simplified Rules of the Rules, then it is mandatory that the lawyers representing the parties conduct a settlement conference.  This can be done with the formality of an actual meeting or by telephone call.  The Settlement Conference is usually conducted without the parties being present.  The goal is to try to generate a settlement, or at least try to simplify and narrow the issues, including the documents to be produced and the manner in which the action will be conducted. 




After the action is ready for trial, the Court will assign a date when parties and their counsel are to attend at a judicial pre-trial.  The pre-trial will often be held before a Judge.  In Toronto, the pre-trial might be held before a Judge or Master.  Prior to the pre-trial, the parties are required to file material which, in addition to including a synopsis of the action and setting out that party’s position, also informs the Court about that party’s view on their readiness for trial and the management of the trial. 


Historically, if the pre-trial was conducted by a Judge, then that Judge is not allowed to conduct the Trial.  This gave the parties and their counsel the opportunity for a full and frank discussion, without fear that the Judge might form an opinion which might be used against one party at Trial.  The Rules of Civil Procedure were amended such that, with the written consent of the parties, the Judge who conducts the pre-trial may conduct the trial.  This has a benefit in that when the actual trial starts, the Judge has a fair amount of knowledge of the issues.  At the pre-trial, the Judge might form an opinion that the case turns on the evidence of persons who are not at the pre-trial.  Thus, at the Trial, the Judge would see and hear those persons for the first time.  On the other hand, at the pre-trial, the Judge may have become somewhat predisposed as the view towards a particular party, in which case, one would not consent to allowing that Judge to conduct the Trial.  There is no guarantee as to the Judge assigned to the actual Trial. 


At the pre-trial, the topics will include the possibility of a settlement of all or some of the issues, methods by which the Trial can be streamlined and conducted in a cost efficient manner, whether there are any special circumstances which might affect the Trial from proceeding in an expeditious manner. 


The pre-trial will often be a mixture of a mediation session and planning the Trial management.  If a resolution is not reached on the action, a Trial date will probably be assigned.  By having the parties and their counsel present, the Court expects that everyone will be available and ready to proceed on that assigned date. 


A word of caution about assigned trial dates.  You might be assigned a specific Monday.  In many instances, the Court will contact counsel on the prior Thursday or Friday to confirm whether the Trial will start on that Monday.  Managing the Trial calenders is a daunting task as there are so many variables that come into play.  Do not be surprised if the Friday call is to inform you that your Trial will not start on Monday, but might start on Tuesday.  In the world of litigation, it is not unusual to be “on call”.




Despite the best of efforts to settle, the mediation, and the pre-trial, there remain instances when parties want or need their day in Court and proceed to Trial. 


Considerable work is often required to prepare for the Trial.  The actual attendance tends to represent only a portion of the total time. 


The procedure undertaken at Trial is in the discretion of the Trial Judge.  Typically, the Plaintiff will start with an opening statement, identifying the main issues and informing the Trial Judge of some of the evidence that will be introduced during the course of the Trial.  The witnesses for the Plaintiff, and usually the Plaintiff, will then give their evidence.  The lawyer for the Plaintiff will examine the Plaintiff and its witnesses.  As the examination of each person is completed, the lawyer for the Defendant has the opportunity to cross-examine that person.  Where the cross-examination raises new issues, the lawyer for the Plaintiff might want to re-examine the witness as to those new issues.  As well, the lawyer for the Plaintiff might want to re-examine in order to clarify any answers given on cross-examination.  There is an important qualification: on the re-examination, the witness is not allowed to give evidence that could have, or perhaps should have, been given in the first round. 


Once the Plaintiff has introduced all of its evidence, the Defendant and their witnesses give their evidence.  Again, we have the main evidence, the right to cross-examine, and the possible re-examination. 


To the extent that the Defendant has introduced new evidence, as opposed to merely denying the evidence of the Plaintiff and its witnesses, the Plaintiff is permitted to call witnesses to deal with that new evidence.  An example is where the Defendant has an actual counterclaim which it wants to advance.  In this regard, the Defendant becomes the Plaintiff in the counterclaim.  The Plaintiff becomes the Defendant to the counterclaim.  In the end, everyone is given a fair opportunity to be heard and make the case for their side. 


Following the completion of the evidence, counsel will make submissions to the Trial Judge as to what findings of fact the Trial Judge ought to make, and on how the law applies to the case, given the facts as found.  It is important to note that the Trial Judge decides on what evidence is admissible, then decides on what evidence should be accepted as true and become the facts of the case, then applies the law to those facts. 


All of this procedure is governed by various rules, from the Rules of Civil Procedure to the Evidence Act of Ontario.  The procedure is designed to be fair to both sides, though, admittedly, not everyone after Trial easily shares that conclusion.


Costs Awarded in the Litigation          


In Ontario, the initial rule is that the winning party will be awarded an amount to compensate them for what they have paid to their own legal counsel to conduct the litigation.  That award is generically referred to as the Costs.  The Costs which are awarded are often, but not always, related to the invoices which might be issued by your legal counsel. 


As with many of the Court Rules, there are several factors which come into play, any of which can generate a particular level of compensation to the winning party. 


There is an inherent policy within the Court system to discourage litigation and encourage settlement or out of Court resolution.  To further that policy, the Rules of Civil Procedure create two scales of Costs. 


First is the Partial Indemnity.  On this scale a party might expect to receive an award of Costs to partially indemnify or cover the actual amounts payable to their legal counsel.  Historically, this scale was referred to as party and party costs.  Though there is never a precise percentage, it is fair to say that Costs, on a Partial Indemnity basis, will represent something in the range of 50% - 60% of the actual charges incurred.  Of course, an immediate qualification must be made that, if your counsel has expended hours which are non-productive, it would not be realistic to expect any compensation for same. 


Second is the Substantial Indemnity, or what was previously referred to as the solicitor and client costs.  As the title implies, it is designed to substantially cover one’s actual legal costs.  An award on this scale might cover 80% - 90% of the actual charges incurred.  It is unusual to recover 100% of the charges. 


What options are available to the Court?  The simple answer is anything and everything.  It is entirely within the discretion of the Court as to the scale of award and the amount.  However, fairness to the parties means that one should be able to form fair and reasonable expectations for any given situation.  Remember, fair and reasonable is to be applied equally to both sides. 


In a typical scenario, two parties proceed through litigation, one of whom will be awarded judgment in its favour.  Initially, one would expect the Court to award the winning party costs on a Partial Indemnity basis.  For the winner, they receive some compensation.  For the non-winner, they not only have to pay their own lawyer, but have to pay the Costs awarded to the winning party. 


This initial presumption may not hold true if the winning party acted in a manner which was quite unreasonable.  It is possible that the winning party is denied any award of Costs.  Indeed, it is possible that the winning party might have to pay Costs to the non-winning party.  Sometimes, the Court will utilize its jurisdiction and power to send a message, and that message is sent by the award of Costs. 


To shift from an award of Partial Indemnity to Substantial Indemnity, the Court would look at various factors. 


One such factor is whether there is a contractual obligation to pay costs on a particular scale.  In almost every mortgage document, there is a provision that the borrower will pay to the lender the legal costs of the latter, on a Substantial Indemnity basis.  Similar provisions may be found in other contracts.  The Court would be very inclined to make an award of Costs on a scale to which the parties previously contracted.  While the Court does have the power to not award Costs on the agreed upon rate, the Court might have to be strongly persuaded as to why the contractual rate should not be followed. 


Next, the conduct of one of the parties may encourage the Court to send a message and award costs on a Substantial Indemnity basis.  An example of this scenario is when one party makes very nasty allegations against the other party and then fails to prove any substantial portion of the allegation.  A particular example is the allegation of fraud or other criminal offence.  While the Pleadings afford the parties certain protection from making nasty allegations, there is a balance at the end for failing to prove same.  Frivolous allegations, or allegations designed to embarrass the other party, are never looked upon by the Court with favour. 


Another example is when a party causes a substantial amount of wasted time.  While counsel should always vigorously represent his or her client, there is a point where it might be regarded as abusive to the other side. 


Last, and perhaps most common, is the consideration of whether the parties made an Offer to Settle.  As the Courts are always encouraging settlement, the proper utilization of an Offer to Settle is a powerful tool employed in the category of awarding costs.  More will be said of this below. 


Who determines the amount of costs?  At any time, the Judicial Officer hearing the particular matter has the discretion to fix or determine the amount of Costs.  For example, after a motion is completed before a Master, or a Judge, they would be in a very good position to appreciate how much time was, or ought to have been, devoted to that motion and fix the amount of Costs.  For shorter Trials, one would expect the Judge to fix the Costs of the action after some submissions and evidence as to the Costs.  For longer and more complicated actions, the Trial Judge might refer the determination to an Assessment Officer who then conducts an informal hearing to make the determination.  In referring the matter, the Judge will also instruct the Assessment Officer as to which scale of Costs should be applied and, perhaps, provide specific instructions to the Assessment Officer.  


When are the costs awarded?  Whenever the parties attend in Court, whether it be on an interim motion or the Trial, there is an opportunity to ask for Costs of that attendance.  For example, after a motion is heard and the decision made by the Court, counsel will be invited to make submissions as to the Costs of that motion.  After a decision is rendered at Trial, counsel will be invited to make submissions as to the Costs of the action, which will include Trial, but not include any motions where Costs have already been determined by the Judicial Officer hearing that motion.  After receipt of submissions from both parties, and receipt of any Offer to Settle, the Court will make an award of Costs as it deems appropriate. 


When are costs payable?  The trial completes the action and any award of costs would be immediately payable, subject to whether an appeal is being taken. 


For attendances such as interim motions, the Court has several options as to when the costs are payable.  Here, the discretion of the Court is broad and often applied to reflect the Court’s view on whether the motion was necessary and/or brought in an efficient and expeditious manner.  The easiest examples are shown by first presuming that the Court has determined or fixed the amount of the costs.  Then the costs could be made payable in any of the following manners: 


-           to the party that won the motion within a very short time (“fixed and to the winner forthwith”);

-           to the party that won the motion at the end of the action (“fixed and to the winner in any event of the cause”);

-           to the party that won the motion, but only if that party also wins the action, (“fixed and to the winner/party in the cause”);

-           to whichever party wins the action (“fixed and in the cause”). 


As you can see, a party who loses the motion might avoid having to pay those costs if that party wins the lawsuit.


Offers to Settle


One method by which parties can often propel themselves to a better award of Costs is the effective use of an Offer to Settle.  As the Courts want to encourage settlement, an Offer to Settle is almost always considered and used as a tool to award additional cost compensation. 


At any time during the litigation process, each party may submit to the other party a formal Offer to Settle.  For now, we will leave aside the technical aspects of an Offer to Settle and briefly review the overall process. 


First, and most important, the terms of an Offer to Settle are never disclosed to the Court until the Court determines the issue of liability.  All too often, clients are hesitant to make an Offer for fear of whether a Judge may interpret the Offer and react in a negative manner towards the party.  The Judge has already made his or his decision before learning the terms of the Offer. 


The Court will compare the Offer to Settle to the actual award made.  At that point, the Court may quickly determine that the other side should have accepted the Offer when it was made and, thus, avoided the additional litigation.  While the winning party should normally receive costs on a Partial Indemnity basis, a winning party who is awarded more than what it was willing to settle for as contained in the Offer, may be awarded costs on a Substantial Indemnity basis for all steps taken after the Offer was served.  For example, you sue someone for $100.00 and, one-third of the way through the action, offer to settle for $80.00.  At Trial, the Court awards you $95.00.  You would expect to be awarded Partial Indemnity Costs to cover your legal costs up to the date of the Offer, and then Substantial Indemnity Costs for all steps taken after the date of the Offer.  This reflects the fact that the Defendant, who could have walked away by accepting the Offer at $80.00, pushed the matter further, and ended up having to pay $95.00. 


The Rules also cover when a Defendant submits an Offer to Settle and, at Trial, achieves a result more favourable than the Offer.  Unfortunately, the Rules for the Defendant do not exactly mirror the Rules for the Plaintiff.  Consider a Defendant who is sued for $100.00 and, part way through the action, offers to pay $80.00 and, at Trial, is ordered to pay to the Plaintiff $60.00.  The Plaintiff was right to sue the Defendant and did win some money.  However, the Plaintiff refused to accept a reasonable offer (the $80.00) and pushed the matter further.  As a result, the Plaintiff might find that it is awarded some Costs up the to date of the Offer, but has to pay the Defendant some Costs for steps taken after the date of the Offer. 


Submitting an Offer to Settle early in the action gives the party an early opportunity to settle.  As well, the number of steps taken after the Offer to Settle will exceed the number of steps prior to the Offer which, hopefully, will generate a greater recovery of Costs. 


A few words of caution.  Submitting an Offer which is quite high may be of little value unless the party is certain that the final Court award will be more favourable than that Offer.  Submitting an Offer which is quite low may mean the party is certain to be awarded a greater amount by the Court.  However, that low Offer might be quickly accepted by the other side, with the result that there is some regret about making the Offer that low. 


Proper use of the Offer to Settle should always be considered as an effective tool, not only to promote settlement, but to maximize the probability of recovering a majority of legal Costs expended. 

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