The first question a foreign insurer must ask upon receiving a claim arising in Canada, is which province did the accident occur and in which province is the claim being advanced? Canada has ten provinces and three territories.  The justice systems in all provinces except Quebec are quite similar.  The Quebec legal system, however, is quite different and, similar to the system in Louisiana, is based on French civil law rather than British common law.  As well, legal procedures in Quebec are conducted in French.

However, although the legal systems in all provinces except Quebec are quite similar, the law with respect to motor vehicle accidents is quite different.  Some provinces, notably Quebec, Manitoba, Saskatchewan and British Columbia have government insurance schemes and variations of no-fault motor vehicle schemes.

The laws of the Atlantic provinces (New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland) are more similar to those of Ontario.

Rogers Partners lawyers are licensed to practice law only in Ontario and we would be pleased to assist any foreign insurer with respect to the defense of an Ontario action. If you need advice with respect to an accident that occurred in a province or territory of Canada other than Ontario, or with respect to no fault benefits of a Canadian jurisdiction other that Ontario, we cannot handle the file but can refer you to a lawyer in the proper jurisdiction.

Our terminology is slightly different from U.S. terminology. Here is a short guide to some of the differences:

Most motor vehicle litigation takes place in the Ontario Superior Court of Justice before federally appointed judges who are appointed for life, not elected.  Appeals from final decisions of the Superior Court of Justice go as of right to the Ontario Court of Appeal.  A further appeal to the Supreme Court of Canada is available, but requires leave of the Supreme Court, which is very difficult to get.  The Supreme Court of Canada usually hears matters only of national importance or where there are conflicting decisions of appeal courts in different provinces on the same issue.

Motor vehicle actions are started in Ontario by a statement of claim that must be issued by the court within two years of the date of the accident.  Extensions are available in certain circumstances.  The statement of claim must be served personally on the defendant within six months of the date of issue, although extensions are available if the plaintiff has a reasonable excuse for failing to effect service in a timely fashion.

Once the statement of claim is served, the defendant has 20 days to deliver a statement of defence if the defendant was served in Ontario.  If the defendant was served in the U.S. or another province of Canada, the time for defence is extended to 40 days.

Plaintiffs may waive strict compliance with the time limits for delivering a defence, and it is customary for plaintiff’s counsel to do so on request as a professional courtesy.

By default, civil actions are tried by a judge alone in Ontario.  However, either side may require trial by a six-person jury by delivering a “jury notice”.  A jury notice is typically delivered by the plaintiff with the statement of claim, or by the defendant with the statement of defence.  If either side delivers a jury notice, the case must be tried by a jury, with certain exceptions.  (For instance, jury trials are not available if the federal or provincial government, or a municipality, are parties to the action). 
If neither side has delivered a jury notice with 10 days of the delivery of the statement of defence, the matter will be tried without a jury.  As a result, if the plaintiff has not delivered a jury notice, the defendant must decide at the time of delivering its defence whether to require a jury.

Many of the major auto insurers in Ontario are of the opinion that, on average, juries assess damages lower than judges and as a result provide their defence counsel with standing instructions to require a jury unless specifically instructed otherwise.

However, there are circumstances that mitigate against a jury:

• Concerns about “homer” juries – there is a concern that juries might favour local plaintiffs over non-local defendants.

• If liability is in issue, you may not want a jury where the conduct of the defendant was particularly offensive – drunk driving or racing, for instance – as the jury may punish the defendant by inflating damages.

• Jury trials are much more expensive than non-jury trials.

• Jury results are less predictable.

Following close of pleadings, each side is required to deliver a sworn “affidavit of documents” listing in Schedule A all non-privileged documents and in Schedule B all privileged documents, and are required to exchange their non-privileged documents.  The rules of the court require defendants to reveal their policy limits and include their insurance policies in Schedule A.

Following documentary discovery, the parties arrange “examinations for discovery”.  Examinations for discovery are similar to U.S. depositions, but only the parties to the action may be deposed.  Except in extremely rare situations, depositions of witnesses and experts are not permitted.

Examinations for discovery of the plaintiff can be quite thorough, however. Defendants are entitled to ask plaintiffs to obtain and produce a copy of their SAB (PIP) insurer’s file, copies of prescription summaries from their pharmacy, a list of all treatments provided by the provincial health carrier (OHIP, the Ontario Health Insurance Plan), files from LTD and disability carriers, ambulance call reports, hospital records, physicians’ clinical notes and records (CNR), employment files, any other documentary evidence bearing a semblance of relevance.

Following completion of the examinations for discovery, defendants are entitled to have the plaintiff submit to one or more independent medical examinations by practitioners of the defendant’s choice (but usually not more than one examination per specialty).  However, the defence is required to obtain written reports of such examinations and to provide copies of them to the plaintiff on receipt.

Often the defence will delay taking the opportunity to have a defence medical until all the plaintiff’s undertakings and documentary discovery have been completed to make sure the medical examiner has a complete picture.  Initial expert reports must be filed 90 days prior to trial, and responding reports 60 days before trial.

Procedures vary slightly from county to county within Ontario, but most courts require mandatory non-binding mediations to be held before trial.  Payment of the professional mediator’s fee is the parties’ responsibility.  Written mediation memoranda are exchanged prior to the mediation itself, which is usually scheduled for a full day.  Normally the defendant claims handler is expected to attend the mediation, as is the plaintiff, so that a settlement can be completed at the mediation. However, if other counsel can often be persuaded to allow foreign claims handlers to make themselves available by telephone to avoid traveling time and associated expenses.

Mediations are strictly off the record and anything said at a mediation cannot be used in court.  Most cases settle at mediation.

The final step before a trial is a pre-trial conference with a judge.  These are typically one- to two-hour conferences with counsel only, and are attempts by the judge to bring the parties together to settle the matter.  Like mediations, they are non-binding, but unlike mediations, most judges will express a strong opinion as to the likely outcome of the case if it were to go to trial.  The judge who hears the pre-trial is precluded from acting as the trial judge, and the materials submitted by counsel to the pre-trial judge are returned at the conclusion of the pre-trial and do not find their way into the court file.  Claims handlers do not normally attend.  Although procedures vary across Ontario, in most counties the trial date is set at the pre-trial conference.

Trials in Ontario are much like trials in the U.S. except that both the judges and the lawyers wear gowns, with the result that the corridors of our courthouses at 9:30 in the morning look like a Batman convention.  We don’t wear wigs, however.

In addition to damages, by statute, a plaintiff is entitled to be paid “pre-judgment interest” on any award.  Pre-judgment interest is also paid on settlement.

Pre-judgment interest on non-pecuniary general damages for pain and suffering is payable at 5% per annum simple interest (not compound interest) from the date the insured was first given written notice of the claim to the date of judgment or settlement.  Pre-judgment interest is also payable on past pecuniary loss (i.e. wage loss and out of pocket expenses) from when the losses are incurred, but at a rate keyed to the bank rate at the date the statement of claim is issued.  No pre-judgment interest is payable on future pecuniary losses.

Interest is also payable on judgments from the date of judgment, so there is some urgency to pay judgments quickly.

Perhaps the biggest difference between the U.S. and Canadian court systems is the issue of “costs”.  In Ontario and most other Canadian jurisdictions, “costs follow the cause”.  This means that the loser of a lawsuit has to pay a portion of the winner’s legal fees and disbursements.  The loser is also obliged to pay GST (Goods and Services Tax) on the costs.  The GST tax rate is currently 5%.

There are two scales of costs, “partial indemnity costs” and “substantial indemnity costs”.  If partial indemnity costs are awarded, the loser has to pay approximately two-thirds of the winner’s legal fees, and all of the winner’s attorney’s “disbursements”, which would include things such as expert fees (including medical expert’s costs), photocopying and fax costs, costs of transcripts, and court fees.  If substantial indemnity costs are awarded, then the winner’s legal fees are paid more or less in full.  The default scale is partial indemnity costs.

The default cost consequences can be altered by settlement offers made by the parties.  The rules are a little complicated, but in general terms if the defendant makes a written settlement offer and at trial the plaintiff obtains a judgment that is less than the amount of the written offer, the cost consequences are reversed.  The defendant still has to pay the plaintiff partial indemnity costs up to the date of the offer, but the plaintiff then has to pay the defendant’s costs on a partial indemnity basis from the date of the offer to the conclusion of trial.  A realistic written settlement offer by the defence can therefore be a powerful incentive to settlement, since the plaintiff runs the risk of paying the defence attorney’s fees through trial if he is not successful in beating the offer at trial.

The other side of the coin is that if the plaintiff makes an offer prior to trial and gets more than his offer at trial, the obligation of the defence to pay costs is increased to substantial indemnity costs from the date of the offer.

These costs provisions substantially change the settlement dynamic from the U.S. practice.  A realistic settlement offer by either party substantially increases the risk to the opposite side in taking the matter to trial.

Costs are negotiable on a settlement and typically are negotiated at a figure of 10% to 15% of the damages, depending on the size of the claim.  The lower percentage is paid on larger claims.

In Ontario, the liability limits in a policy apply only to damages and pre-judgment interest.  They do NOT apply to costs.  Your obligation for costs is unlimited. 
For instance, if your policy limits are $200,000, on a $200,000 claim you might be obliged to pay $30,000 for costs in addition to the $200,000, plus say $20,000 in disbursements, so your real exposure with a $200,000 policy limit is probably more in the range of $250,000 to $260,000.

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 Currency Conversions:

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 Ontario Statutes:

http://www.e-laws.gov.on.ca/navigation
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 Insurance Act:

http://www.e-laws.gov.on.ca/html/statutes/
english/elaws_statutes_90i08_e.htm

 SABS Regulation:

http://www.e-laws.gov.on.ca/html/regs/english/
elaws_regs_930776_e.htm