The 2007 edition of the Montebello Civil Litigation Conference has ended. Our Heather Williams is the conference co-chair and Susanne Sviergula is on the organizing committee.
The conference featured numerous visiting guests, each of whom lavished praise on the conference as the premiere civil litigation continuing education event in Ontario. The guests included Attorney-General Chris Bentley, former Associate Chief Justice Coulter Osborne, Law Society of Upper Canada Treasurer Gavin Mackenzie, Court of Appeal Justice Kathryn Feldman, Superior Court Justice Julie Thorburn, Ontario Bar Association Vice-President Jamie Trimble, CBA Second Vice-President Kevin Carroll, Q.C. and Superior Court Justice Paul Perell. They were joined by an assortment of judges and lawyers from the east region.
Karen McLaurin Retires
Although the conference was a resounding success, the attendees were saddened to hear, on Friday night, that long-time executive director of the County of Carleton Law Association Karen McLaurin, is retiring from the organization effective next March. Karen has served the members of the Association with great energy for 27 years and has been responsible for the organization of the Montebello Conference year in and year out. As Bill Simpson, Justice Chuck Hackland, Heather Williams and LSUC Bencher Tom Conway said in addresses to the conference-goers on Friday night, Karen will be greatly missed.
Coulter Osborne Speaks About Civil Justice Review
Former Associate Chief Justice Coulter A. Osborne addressed the conference on the second day. He spoke about his Civil Justice Reform Report, handed down last Thursday.
He said that in preparing his report, he had had to take into account Mark Twain’s observation that “I’m all for progress; it’s change I don’t like”.
Justice Osborne began by stating something that some might think runs counter to contemporary thinking: that having more trials is not necessarily indicative of systemic failure. In fact, he said that in a better world, we might have more trials but they would be shorter. (Mr. Justice Tim Ray had made similar comments on the first day of the conference, stressing that lawyers should not be condemned for taking cases to trial.)
Justice Osborne said, “Matters are settling now for the wrong reasons, one being the cost of pursuing the action to its conclusion. Brampton is a good example: the black hole of Ontario when it comes to delay. The problem is exacerbated by the position that the non-family civil justice system occupies. We’re squeezed between the constitutional imperatives of having criminal cases tried within a reasonable time and the social imperative of having family cases tried. There is a trial in Brampton set in November, 2006 where a trial date was assigned for April, 2010. That case has settled. I didn’t ask why but I can guess. They’ve solved the delay problem in Brampton by not scheduling trials at all because there’s a systemic embarrassment at the length of delay.”
He said that some judges had advocated the abolition of trial by jury but that juries were “a unifying factor among the bar”, the majority of whom want to retain the system. He has recommended that juries not be used in simplified procedure cases (and he has recommended that the monetary limit for such cases be increased from $50,000 to $100,000).
Justice Osborne noted that many of his recommendations reflect the principle of “proportionality”. (The word appears 26 times in the report, in various contexts. One of these is costs, where Justice Osborne has recommended that proportionality be enshrined as the “overarching” principle.)
Small Claims Court
With respect to Small Claims Court, Justice Osborne said, “there are recommendations in the report for the increase in jurisdiction to $25,000. I recommend no change in the costs structure. Some lawyers will be disappointed; that’s the way it goes. There’s an ‘exceptional circumstances’ exception but ordinarily, costs are capped at $3,750. [15% of $25,000]”
(One member of the plaintiffs’ bar with whom we spoke did indeed voice unhappiness with this recommendation.)
Justice Osborne said that many lawyers in Toronto had wanted a more substantial increase in the simplified procedure limit, to as high as $250,000, and that he had considered recommending increases of different amounts for different regions. But ultimately, he decided that it was inadvisable to balkanize the province and has proposed that simplified procedure apply to actions in which the amount claimed is $100,000 or less.
Justice Osborne admitted that his former court (the Court of Appeal) is to blame for “the unfortunate experience that we’ve had with Rule 20”. Anecdotal evidence indicates, he said, that there are fewer summary judgment motions being brought (few practitioners would dispute this). In Justice Osborne’s opinion, it is imperative that cases in which there is no genuine prospect of success at trial be gotten out of the system, in a fair manner. He used the phrase “no genuine prospect of success at trial” advisedly; this is the standard used by British courts in motions for summary judgment. Justice Osborne has not recommended that it be adopted here. He recommends that the test be left as is (“no genuine issue for trial”) but has pressed for judges hearing these motions to be given greater powers.
Justice Osborne did not have enough time to discuss his report in detail. The last area that he discussed was one with which he is quite familiar (having authored a major study of motor vehicle accident compensation in 1987): automobile insurance. He spoke of “the bizarre situation we’re in with the verbal threshold”: “If you accept the need to control premiums, that’s fine, but if the $30,000 deductible is aimed at keeping small cases out of the system, what does the threshold change? Not much. If you look at jury cases, the trial judge charges the jury, the case is basically over and you start arguing whether it should have been there in the first place.”
In his report, he has suggested that FSCO consider what effect the threshold and deductible have had on accident compensation.
Court Approval of Settlements Affecting Persons Under Disabilities
Regular readers of our blawg will know that this year, the Superior Court has taken a much harder look at court approval of settlements. In the past, these settlements were often rubber-stamped (or close to it). But spearheaded by Justice Julie Thorburn in Rivera v. Leblond, judges in a series of rulings have become much more demanding in terms of the evidence that they require from counsel for the plaintiff. This includes various aspects of the settlement: legal fees being charged to the litigation guardian, whether the settlement is truly in the best interests of the disabled person, etc.
We were fortunate to have Justice Thorburn with us at Montebello. She was a member of a panel that included Tom Connolly (past President of the Ontario Trial Lawyers’ Association), Justice Charles T. Hackland and Donald Dow of Gowlings. The panel discussed the procedures for court approval of settlements.
Tom Connolly is a member of a committee that has been struck to review court approval procedures and to devise a set of “best practices”. Unfortunately, that committee’s report has not yet been released, but it is apparently due to come out next month.
Donald Dow gave the conference registrants a primer on structured settlements.
Justice Hackland told us that the procedure for obtaining court approvals is going to change in Ottawa, with himself and three other judges being tasked to handle all of the motions for approvals. He made it clear that there would be no rubber stamp from now on.
One somewhat controversial topic that was discussed was the extent to which the court can look behind the terms of a retainer agreement (usually involving contingency fees) that has been entered into by a litigation guardian. Both Justices Thorburn and Hackland made it clear that they do not consider themselves bound by fee agreements entered into by litigation guardians, when the interests of the person under a disability might be compromised.
However, after the panel had concluded, we were told of a just-released decision of Mr. Justice Robert Smith, Re Cogan, in which His Honour had approved a very large contingency fee, based on the agreement that had been entered into with the litigation guardian. Justice Smith agreed to forward a copy of his reasons to us and we will post them, with a comment, upon receipt. It appears that Justice Smith has taken a much more deferential approach to retainer agreements entered into by litigation guardians than other members of the Superior Court have been prepared to do.
Another interesting issue that arose in the panel discussion was whether the motion materials for court approval must (or should) be served upon counsel for the defence. Tom Connolly, on behalf of the plaintiffs’ bar, felt that plaintiffs could potentially be prejudiced if the defence is served with affidavits and other materials in which the plaintiffs lay their case bare. If the settlement is not approved, the parties go back to the status quo but the defence would then have the benefit of having seen the thinking and strategy of the plaintiffs’ solicitor. Donald Dow (who usually acts on behalf of the defence in medical malpractice cases) said that in some cases, he would want to see the settlement materials but in others, he would not insist on it.
This whole area of the law is in a state of flux; it will be interesting to see what Justice Smith has to say in the Cogan case, how his decision is received by other judges and what the “best practices” panel has to say next month. Stay tuned.
Heather Williams chaired a panel on costs. The panel was made up of Court of Appeal Justice Kathryn Feldman and Ottawa Justices de Lobe Panet, Tim Ray and Denis Power.
Justice Feldman discussed costs in the Court of Appeal. She acknowledged that awards of costs in that court tend to be low: $40,000 is the top end of the range.
There was some discussion of Justice Robert Smith’s recent decision in Dunstan v. Flying J, where a defendant who had offered to consent to a dismissal without costs received substantial indemnity costs after trial. At least two other cases since then have come to similar conclusions. However, at the conference, Justice Ray expressed his disagreement with the Dunstan decision. In his view, Rule 49 did not contemplate substantial indemnity costs for defendants.
Abel v. Hamelin (taking future collateral benefits into account in evaluating Rule 49 offers)
Justice Power had prepared a paper in which he had reviewed recent significant decisions on costs. One which we had not yet seen was a November 14, 2007 ruling by Justice Charles Hackland in Abel v. Hamelin. (This was an assessment of damages in an MVA case, the trial decision of which can be accessed here. Justice Hackland agreed to send us a copy of his reasons with respect to costs next week. We have posted a separate discussion of the case here.)
According to Justice Power’s paper though, Abel dealt with issues arising out of the recent Ryder v. Dydyk ruling by the Court of Appeal: how to calculate whether an outcome at trial is better or worse than the amount of an offer to settle.
The plaintiff apparently delivered two offers to settle in this personal injury case. Neither provided for the assignment of future income replacement benefits. According to Justice Power’s paper, the trial judge would be required to order such an assignment under s. 267.8 of the Insurance Act when a claim for future income loss is made. (Justice Hackland’s first set of reasons also say this, at para. 49. Actually, section 267.8(9) says that future income replacement benefits must be held in trust for the person from whom damages are recovered. Section 267.8(12) says that the court may order an assignment of future benefits.)
Justice Power quotes from Justice Hackland’s reasons as follows:
Therefore in assessing whether either of these offers exceeded the plaintiff’s actual recovery of $344,238.48 one would need to know what the plaintiff’s expected IRB benefits would be. This is because the Court’s award of $344,238.48 has the additional stipulation that the defendant is entitled to an assignment of the statutory IRB’s due to the plaintiff, up to her 60th birthday. The net recovery to the plaintiff is the appropriate figure for Rule 49 comparison purposes. The Court does not have this data to assess the plaintiff’s two above mentioned offers.
Power J.’s paper says that Justice Hackland went on to find that, pursuant to Rider v. Dydyk, the $15,000 Insurance Act deductible had to be added to the award in order to compare it to the Rule 49 offers. When this was done, the plaintiff had beaten her last settlement offer.
However, Justice Hackland then went on to say:
But as noted above, the trial judgment requires a set off or assignment of the plaintiff’s future IRB’s, the value of which an actuary has calculated to be $166,938.00. Therefore, the plaintiff’s net recovery is $344,238.48 + $15,000 – $166,938.00 = $192,300.48. this sum is of course much less than the plaintiff’s December 1, 2006 offer to accept $349.735.58 with no assignment of IRB’s.
Thus, it would appear that the plaintiff did not receive substantial indemnity costs. We have some questions about this aspect of the ruling, but we will defer them until we have had an opportunity to review the actual decision.
As Justice Power pointed out in his paper, the costs decision in Abel v. Hamelin is significant for two other reasons. First, His Honour held that in assessing costs, the court should not take into account recommendations made by the judge presiding at the settlement conference. Secondly, he accepted the defence submission that the plaintiff is not entitled to claim costs in the tort action for her counsel’s work in handling her claim for statutory accident benefits.
Denis v. Bertrand (order for interim disbursements)
Another interesting decision mentioned in Justice Power’s paper was Denis v. Bertrand & Frère. (This is follow-up litigation to the concrete case, Alie v. Bertrand. In the Denis litigation, the defendants had agreed to be bound by the findings of liability in Alie.
In this ruling, the plaintiffs had moved for an order that they be entitled to recover interim disbursements from the defendants. They sought $855,782, claiming that they had exhausted their financial resources in the litigation and were unable to proceed further.
Justice de Lotbinière Panet reviewed the jurisprudence and concluded that he had jurisdiction to order payment of interim costs, in an appropriate case.
Here, Justice Panet ordered that the defendants pay interim disbursements in the requested amount ($855,000) because (a) liability was not in issue; (b) the defendants were going to be found liable for damages of at least $8 million to $10 million; and (c) it was not realistic to think that the plaintiffs could contribute the necessary funds themselves.
At Montebello, His Honour discussed his ruling. He wondered whether the fact that the defendants’ admission of liability had been used as a basis for the award of interim disbursements might cause defendants in other cases to think twice before making a similar admission.
In addition to the above, numerous informative papers were presented by various speakers and panellists.
Now, the organizing committee starts back to work, preparing for next year’s conference.