How Litigation Proceeds

Litigation is governed by rules of procedure which make most lawsuits exactly the same as the others from a procedural perspective.  However, given the delays inherent in the system and the tactical maneuvering, it becomes quite easy for clients to lose sight of the fact that all lawsuits have essentially three stages:

• Pleadings
• Discovery
• Trial 

Pleadings

Every lawsuit starts with pleadings.  The opening pleading is the Statement of Claim.  In this document, the plaintiff outlines his/her/its case against the defendants.  Its function is to establish the basic outline of the dispute and the bases on which the claim is founded.  It is not designed to fully establish the plaintiff’s evidence, but merely establishes the major facts on which the plaintiff relies.

The defendant responds to the plaintiff’s allegations with a Statement of Defence.  Again, this document sets out the defendant’s general position in the litigation, the major facts on which the defendant relies for those positions and any technical defences (such as limitation periods) which must be pleaded according to the court rules.

The pleadings set out the basic framework on which the lawsuit will be developed.  All facts will be marshalled to enhance or defeat an issue set out in the pleadings.  Whether evidence will be properly before the court will be determine by its relevance to the pleadings.  As a result, it is quite common to see litigation “front end loaded” with a significant amount of time spent on researching the law and drafting the pleadings to ensure that a party puts its best position forward.  In some instances, this work at the preliminary stage can permit a party to obtain summary judgment – usually for the dismissal of the lawsuit – and avoid the need to proceed with discovery or a trial.

Discovery

When all of the pleadings have been exchanged, the parties are then obligated to exchange lists of the documents in their possession.  Each party must swear an affidavit indicating that all documents related to the litigation have been located or, if they are missing, explaining why they cannot be located.  Those documents in each party’s possession must either be produced to the other side upon request or else an explanation must be provided as to why they will not be produced.  The most common reason for not producing documents is because they are protected by privilege between yourself and our office or other counsel.

Until fairly recently, each lawyer would collect and sort the documents provided by the client.  Following the completion of the list of documents to be produced, each law firm would then make many photocopies of the documents and deliver the copies to the other party’s lawyers.  The costs for photocopying and for storage in complex lawsuits often proved exorbitant.  It is now common for large law firms and more sophisticated smaller firms to take the clients’ documents, have the documents scanned electronically, and produce the documents on a single CD-ROM or DVD-ROM.  Our office follows this practice.

The exchange of lists of documents and copies of the documents is known as “documentary discovery”.

Following the exchange of documentation, examinations for discovery will be arranged.  These are verbal examinations made under oath.  Questions are asked of each party or each party’s representative (for example, where a party is a company).  These examinations are not conducted before a judge, but rather before a stenographic reporter.  The object of these examinations is to obtain admissions to be used against the party being examined at trial and to obtain information about the examined party’s case.

Often at examinations for discoveries, the person being examined does not have the information requested available.  As such, “undertakings” to provide that information are given.  The amount of time for examinations for discovery will be comprised of not only the original examination, but also any time necessary to provide answers to the undertakings.  As well, if the answers raise other questions, the party being examined may be required to re-attend at a continuation of the examination to answer those new questions.

Trial

When the discovery process is completed, the action is listed for trial.  There is often a delay between the time that the litigation is set down for trial and the actual trial date.  For example, if the trial is scheduled to take longer than two weeks in Toronto, the delay could be up to three years.  Eventually, you will be notified that your case is ready for trial.  In Toronto, a precise starting date for the trial can be provided.  For other parts of the province, they operate under a “week of” system in which a trial is likely to start sometime in a particular week – although it is not uncommon for the trial to be delayed to the following week or later.  In those instances, all parties are “on call” until the trial commences.

As a very general rule of thumb, very simple actions will be heard at trial within one year of the litigation commencing.  However, on average, it takes between two and three years between the time the litigation commences and the date of trial.

Before the trial is heard, the parties will attend a pre-trial conference at which a Judge will determine whether the litigation can be settled or if it will proceed to trial.  While some judges will give their opinion on the merits of each side’s case, other judges will focus only upon the possibility of a settlement and if the possibility is slim they will send the matter on to trial.

Settlement

Only a few cases actually reach a trial.  Trials are expensive, slow and often inefficient and most litigation settles prior to trial.

Settlement negotiations usually occur at the following stages of the litigation (although they can occur at any time):

In addition, some parts of the province (for example, Ottawa and Toronto) have instituted “mandatory mediation” which requires the parties to attend a mediation session after pleadings are closed but before the trial commences.

Given the expense and delay of litigation, it is preferable to settle –  on terms that are acceptable to you.  As such, it is important that you set a specific goal for the litigation at an early date.  If you can attain your goal through settlement, you will be advised to consider that solution.  If this is a case that should be settled, it is better to settle it at any early stage rather than just before the trial commences, when both sides have run up time and expense.  Our experience has been that one party will try to “high ball” the other party who, in turn, will try to “low ball” the settlement terms.  The usual result is an amount roughly in the middle of those two initial settlement offers.  As such, you should consider your goal with that reality in mind.

The court rules in Ontario permit any party to serve an offer to settle on the other parties.  If a plaintiff serves an offer and receives a judgment for as much as that offer or more, then the plaintiff will receive costs at a higher level for those costs incurred after the date of the offer.  If the defendant serves an offer and the plaintiff receives as much as that offer or less, then the plaintiff must pay the defendant’s costs at a higher level from the date when the defendant made its offer.  This puts pressure on the parties to seriously consider all formal offers to settle.  We will discuss offers to settle and their ramifications in more detail if we decide to serve an offer or if our office receives an offer to settle from the other parties.

Throughout the litigation process, our goal is to provide you with efficient, effective and affordable representation.  We look forward to assisting you to resolve your disputes in a manner that meets your needs for the litigation itself, but also your short- and long-term business needs.