The Litigation Process
The procedure by which a legal dispute procedes through litigation in Ontario varies somewhat depending on the amount in dispute and the court in which the proceeding is brought; generally, however, the procedure follows these steps:
The parties will exchange written documents that define the issues in the lawsuit. Typically these will include a Statement of Claim, a Statement of Defence, and possibly a Reply; however, there may be other documents such as a Counterclaim, or a Cross Claim, depending on the identity of the parties to the dispute and the nature of the claims between them.
After the parties to a legal dispute have exchanged their written claims and defences, they proceed to “discovery”. Discovery is a stage of the litigation that consists of two parts: first, the parties exchange all relevant documents that are in their possession, control, or power, and then the parties orally examine one another to learn everything they can about their opponents’ case. Following the discovery phase, the parties should have a complete understanding of the strength and weaknesses of their own case or defence and of their opponents’. This permits the parties to try to settle the dispute without having to expend further funds to proceed to trial; or, if the parties are unable to settle the lawsuit, they can proceed to trial knowing what their opponents’ evidence will be.
From the inception of the lawsuit and all the way up to and including trial, either side may ask the court to resolve procedural disputes by conducting short hearings known as “motions”. Common pre-trial motions in litigation include (i) motions by which the defendant asks the court to compel the plaintiff to improve or clarify the allegations made in the statement of claim, (ii) motions by which one party of the other asks the court to compel the other party to produce documents that have not yet been produced but that are known to exist, or to answer questions that were refused at discovery, (iii) motions by which the defendant asks the plaintiff to pay into court a significant amount of money, which is held in reserve to the benefit of the defendant if the plaintiff is unsuccessful at trial and is ordered to reimburse the defendant some of the defendant’s legal costs, (iv) motions for judgment, and (v) motions for temporary injunctions.
Motions for judgment and motions for temporary injunctions deserve special consideration. Motions for judgment can be brought if a defendant has failed to respond to a statement of claim; in that circumstance, a plaintiff can ask the court to issue a “default judgment”, which is a judgment that grants the plaintiff the compensation sought by the plaintiff in the lawsuit, but without the need for a trial. In some circumstances, a defendant who later learns that it has been the subject of a default judgment may ask the court to set aside that default judgment, and if that judgment is set aside, then the lawsuit proceeds in the usual course. Motions for judgment can also be brought later in the lawsuit by either the plaintiff or defendant; such motions are available if the party asking for judgment can demonsrate that there are no genuine issues requiring a full trial – in other words, there is sufficient evidence already before the court to enable the court to render a judgment without having to conduct a full trial. Motions for temporary injunctions are hearings by which the plaintiff, usually on an urgent basis, asks the court to issue an order temporarily restraining the defendant from engaging in certain conduct, or compelling the defendant to engage in certain conduct, until such time as there can be a trial to determine the parties’ rights and obligations. For instance, a franchisee plaintiff may ask the court to order the franchisor defendant not to terminate the franchise agreement until such time as a trial can take place; a franchisor plaintiff may ask the court to order a former franchisee from desisting from competing with the franchisor.
Mediations and Pre-trials
At any time after a lawsuit has been commenced, the parties are free mutually to retain the services of a neutral third party in order to attempt to broker a private settlement of their dispute. That process is known as “mediation”; mediation is mandatory for most civil lawsuits commenced in Toronto – the plaintiff must prove to the court that mediation has taken place before the court will permit the lawsuit to proceed to trial.
Apart from mediation, the Ontario court itself will attempt to resolve the lawsuit before allowing the parties to proceed to trial; that court-initiated settlement process is known as a “pre-trial” and takes place after the plaintiff has notified the court that the plaintiff is ready to proceed to trial. The pre-trial is presided over by a judge of the Superior Court of Justice who is different from the judge that will be assigned to hear the trial if the pre-trial does not result in a settlement.
The lawsuit will proceed to a trial if it has not been settled by then. The trial may be tried by a judge and a jury, or by a judge alone, depending on various circumstances. A trial may last a few days or a few months depending on the underlying complexity of the dispute. After the trial, the judge will issue a judgment, or if there is a jury, then the jury will issue a verdict.
In some circumstances, it may be possible to appeal the judgment or verdict arising from the trial.
Once a plaintiff obtains a final judgment, whether by default, on summary motion, or at trial, the defendant is legally obligated to comply with the terms of that judgment; for instance, if the judgment requires of the defendant to pay the plaintiff a sum of money, then the defendant must do so. If the defendant does not do so, then the plaintiff must take steps to enforce that judgment. There are a number of tools avaliable to plaintiffs seeking to collect on their judgments, including the ability to collect the amount owed by directly “garnishing” the defendant’s wages or bank accounts, the ability to seize and sell any of the defendant’s assets including the defendant’s real property, and the ability to question the defendant about the defendant’s assets or liabilities.
This general process that we have described here can have significant variations depending on things like the amount being sued for, the subject matter of the dispute, and the location where the lawsuit is commenced.
The time period from the commencement of the lawsuit until a final judgment is obtained will normally take years. The long duration of this process is partly the result of how long it takes to complete some of the steps we described above, including in particular the “discovery” stage, partly the result of systemic delays in the court system in Ontario, and partly the result of other factors such as the financial resources of the respective parties to the dispute. The delay can have the effect of advantaging defendants and discouraging plaintiffs.
The cost of litigation in Ontario is high. In many cases, both sides to litigation can expect to incur legal costs in the six-figure range. The long period of time over which litigation unfolds means that the legal cost, while significant, is spread out over time. Periods of inactivity are common and involve no, or nominal legal expenditure. By contrast, the discovery phase and the trial are particularly expensive since they require a great deal of time spent by the lawyers involved in preparing for, and attending at, the examinations and the trial, respectively.
In Ontario, a party that is unsuccessful at trial or at a motion can normally be expected to be ordered to pay the successful party a significant portion of the succesful party’s legal costs incurred in relation to that trial or motion. The strategic use of offers to settle can have a significant effect on how much of its legal costs a successful party can expect to recover from the unsuccessful party.
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