Changes to court procedures may make it easier and less expensive for employees to sue their employers

Significant changes have been made to the Ontario Rules of Civil Procedure, the process and framework by which legal actions, including wrongful dismissal actions, proceed. These changes should be of interest to employers because they have the potential to lead to an increased number of claims by employees. On the positive side, the changes should decrease some of the time and effort spent by both sides in litigating these disputes.

Broadly speaking, there are three major changes that will have the largest impact on legal claims by non-union employees in the Civil Courts.

  1. Monetary limits have been increased in Small Claims Court from $10,000 to $25,000, and have increased under Simplified Procedure from $50,000 to $100,000.
  2. The scope of both oral and documentary discovery has been reduced.
  3. The procedure for Summary Judgment Motions has been expanded, perhaps making the early and less involved resolution of wrongful dismissal actions more attractive.

1. Increases to the Monetary Limits — Small Claims Court and Simplified Procedure

Small Claims Court Procedure

The Small Claims Courts of Ontario operate with fewer Rules of Procedure and were designed to increase access to justice. Actions brought in Small Claims Court proceed more quickly and are disposed of with fewer procedural steps as compared to cases in the regular Superior Court of Justice. The pleading documents, by which parties state their case, are much less complicated. There are no Examinations for Discovery and many plaintiffs proceed without the assistance of legal counsel. In the employment context, the system serves to provide access to bringing a wrongful dismissal or other employee claim without the costly expense of retaining counsel. The cost of retaining counsel can quickly displace the amount sought by some employees (in low-paying jobs or with short service) as damages for wrongful dismissal.

Previously, the Small Claims Court had a $10,000 cap on the amount of money it could award by way of damages in a legal action. That cap was increased to $25,000 on January 1, 2010. This will allow employees greater access to the streamlined procedures available in Small Claims Court and may result in a higher number of employees seeking legal redress where the monetary amount at issue is relatively small, but where the Small Claims Court was not previously available.

Simplified Procedure

Actions claiming amounts in excess of the Small Claims limit may be pursued under the Simplified Procedure of the Ontario Superior Court of Justice. The Simplified Procedure is a system that eliminates certain procedural steps, saving time and cost in pursuing a legal action. The Simplified Procedure was mandatory for claims below $50,000. If plaintiffs brought an action under the regular procedure and did not recover at least $50,000 following a trial, there could be cost consequences as a dis-incentive for not using the Simplified Procedure.

The jurisdiction of Simplified Procedure has now been increased to $100,000. This limit will necessarily catch a greater number of employee claims that previously would proceed under the standard rules of procedure.

One of the most notable aspects of the Simplified Procedure is that it did not provide for Examinations for Discovery. Oral Examinations for Discovery will now be available in Simplified Procedure, but must be limited to two hours or less.

2. Curtailing the Breadth of Discovery

Procedural law had developed a system where the discovery of documents was quite expansive, in that any document with a "semblance of relevance" to the issues in dispute was required to be produced by the parties. Changes have been implemented where only documents that are "actually relevant" to the matters at issue will be required.

Claims that are brought for amounts exceeding $100,000 — thus beyond the jurisdiction of Simplified Procedure — have also been given new rules for the discovery process.

Examinations for Discovery are now capped at seven hours of discovery, unless both parties consent or the court orders otherwise. In addition, documentary discovery will also follow the "actual relevance" test and there will be a formal recognition of the concept of proportionality in determining the requirement to produce documents. In other words, the costs associated with answering or responding to certain questions or productions might be completely out of proportion with their direct relevance and perhaps with the amount of money that is claimed in the action. While that consideration may have formed an internal component of how judges and masters dealt with production issues, it will now be a formal codified consideration.

3. Summary Judgement Motions

The mechanism of Summary Judgement was introduced initially again, as a method to provide quicker access to justice and to resolve claims, where they could be disposed of on largely legal grounds. A Motion for Summary Judgment would be brought where there are very little or no factual issues in dispute, such that the matter may be determined on issues of law without the need for testimony.

The changes implemented in January 2010 will permit judges to conduct a mini-trial and to make findings of credibility. Even where an employer alleges substantial mitigation issues, summary judgment may be an appropriate and cost-effective way to determine a wrongful dismissal action.

Summary

The changes to the jurisdictional limits in the Small Claims Court may lead to an increase in the number of claims that are now pursued, where previously the costly mechanisms in the higher courts may have had a chilling effect on claims that were in excess of $10,000, but worth less than $25,000. With a higher jurisdictional threshold, employees may be more inclined to access the Small Claims Court.

The increase to the threshold for Simplified Procedure will mean that more employee claims will be dealt with under the streamlined procedure if the claim is not worth in excess of $100,000. That said, some procedural steps have been added to the Simplified Procedure, including a limited Examination for Discovery.

Please do not hesitate to contact any member of our Labour & Employment Group if you have any questions regarding these developments.