The Value of Creativity and Imagineering in Legal Business Strategy
Heather Suttie
The Promises and Perils of AI from a Perosnal Injury Lawyers Perspective
Charles E. Gluckstein
Section 581 Advances Joe Nagy
Vehicle Damage as a Factor in Assessing Causation & Effect of Plaintiff's Injuries
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The contents of The Barrister are for informational purposes only and do not constitute legal opinions by the Alberta Civil Trial Lawyers Association, its members or contributing authors, and should not be relied upon as such.
Statements and opinions expressed by the editors and contributing authors are not necessarily those of ACTLA. The official position or views of the Alberta Civil Trial Lawyers Association will be stated as such. Copyright © 2024 by the publisher, ACTLA. All rights reserved. Reproduction of any material herein without permission of the publisher is prohibited.
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The Barrister is published quarterly by the Alberta Civil Trial Lawyers Association 777-10339 124 Street, Edmonton, AB, T5N 3W1 T: 780.429.1133 | 1.800.665.7248 | www.actla.com
Advocating for a strong civil justice system that protects the rights of all Albertans.
Chair: Mike McVey
Past Chair: Owen Lewis
Vice Chair: Jillian Gamez
Secretary: Laura Comfort
Treasurer: Travis Bissett
Members-at-Large:
Joseph A. Nagy
Clifford Headon
Dana Neilson
Geographical District Representatives:
North West: Leah Paslawski
North East: Waverly Mussle
Edmonton: Karamveer Lahl
Calgary: Peter Cline
Central: Evan Morden
South East: VACANT
South West: Thomas Kannanayakal
ACTLA STAFF
Executive Director
Joy Jeong | executivedirector@actla.com
Communications and Events Services
Administrator & Editor-In-Chief, The Barrister
Nash Calvert | communications@actla.com
Finance & Member Services Administrator
Lochlin Zhao | membership@actla.com
Owen Lewis - 2023-24
Angela Saccomani, KC - 2022-23
Maia Tomljanovic 2021-22
Jackie Halpern, KC, 2020 - 21
Shelagh McGregor, 2019-20
Mark Feehan, 2018-19
Michael Hoosein, 2017-18
Maureen McCartney-Cameron, 2016-17
Nore Aldein (Norm) Assiff, 2015-16
Craig G. Gillespie, 2014-15
Donna C. Purcell KC, 2013-14
George Somkuti, 2012-13
Constantine Pefanis, 2011-12
James M. Kalyta, 2010-11
James D. Cuming, 2009-10
Richard J. Mallett, 2008-09
Arthur A.E. Wilson KC, 2007-08
Walter W. Kubitz KC, 2006-07
William H. Hendsbee, KC, 2005-06
Kathleen A. Ryan KC, 2004-05
Ronald J. Everard KC, 2002-04
Stephanie J. Thomas, 2000-02
James A.T. Swanson, 1998-2000
Gary J. Bigg, 1996-98
Stephen English KC, 1994-96
Anne Ferguson Switzer, KC, 1992-94
Terry M. McGregor, 1990-92
J. Royal Nickerson KC, 1988-90
Derek Spitz KC, 1986-88
The Fall Edition of The Barrister is coming!
We are looking for interesting stories and articles about generalized practice, including Family Law, Corporate Law, and more!
Whether you are an experienced trial lawyer, a law student, or an expert witness, contact communications@actla.com to contribute an article.
Articles should be between 500-2500 words. Longer research articles are accepted as well.
In2024, ACTLA has been focused on advocating on behalf of injured Albertans against no-fault or no-fault like insurance. This has consumed significant financial resources and time commitments from ACTLA members.
On May 27, 2024, the Government of Alberta held an Insurance Summit to bring various stakeholders together for discussions about insurance reform in order to reduce the cost of insurance premiums for Albertans. I attended this summit as ACTLA Chair, as did Past Chair, Owen Lewis and Vice Chair – Public & Government Relations, Jackie Halpern. In addition, Edmonton Representative Karamveer Lahl attended on behalf of his firm, James H. Brown. Mr. Lewis, Mrs. Halpern and Mr. Lahl all presented at the Insurance Summit.
The focus of the Insurance Summit was to discuss various options for reducing the cost of automobile insurance during a time where many Albertans are concerned about affordability. Several key principles were discussed including choice, affordability, stability and simplicity.
One point of focus for some stakeholders was the role of personal injury lawyers in increasing insurance premiums due to increasing legal costs. ACTLA members adamantly maintained that personal injury lawyers are not driving high insurance premiums and that legal fees paid by Plaintiffs to their own lawyers pursuant to Contingency Fee Agreements do not affect claims costs.
Following the Insurance Summit, it became clear that there were many points of agreement between many of the stakeholders. For example, many stakeholders including ACTLA expressed that it is important to preserve the rights of those accident victims who do not recover from their injuries. In addition, all stakeholders agreed that injured Albertans should receive prompt and evidence-based treatment in order to put them in the best position to recover from their injuries. The ACTLA Public & Government Relations team felt that it was important to work with stakeholders to the extent possible to assist in achieving the goal of reducing insurance premiums while maintaining and promoting ACTLA’s core values.
In support of accident Victims, ACTLA’s Government & Public Relations team has been in frequent contact with the Alberta Government, including elected representatives, about these issues. In addition to ACTLA’s opposition to no-fault or no-fault like insurance generally, emphasis has been placed on the importance of maintaining (ie. not expanding) the current definitional restrictions on accident victims’ rights to pursue compensation with the Courts. ACTLA has also put forward additional options to reduce premiums and has emphasized that significant premium savings can result from optional changes in coverage in different areas such as property damage.
I recognize that members are likely looking for ways to help the cause. There are a few ways ACLTA members can help, but one of the most important ways you can assist is to donate to ACTLA’s Access to Justice Fund. Significant advocacy efforts require significant resources and all donations are greatly appreciated.
Finally, I want to take the opportunity to thank all of those assisting with ACTLA’s advocacy efforts over the last several months.
Yours truly,
Mike McVey Board Chair Alberta Civil Trial Lawyers Association
Joy Jeong, Executive Director ACTLA
Dear Members and Supporters,
As we embrace the warmth and energy that summer brings, I find myself reflecting on the incredible momentum we've built together as a community. Your unwavering commitment to the Alberta Civil Trial Lawyers Association has been nothing short of inspiring, and I am thrilled to share some exciting updates with you.
First and foremost, thank you to everyone who joined us at our recent seminars. Your presence and active participation truly make a difference in our shared mission to uphold justice and fairness within our legal system. It was wonderful to see familiar faces and to welcome new members into our growing community. Your enthusiasm fuels our efforts and reaffirms the importance of the work we do.
Looking ahead, we have an exciting lineup of events and initiatives planned for the second half of the year. From educational seminars to networking opportunities, there will be plenty of chances for us to connect, learn, and grow together. I encourage each of you to mark your calendars and join us at these upcoming events. Your engagement not only strengthens our association but also fosters a community of support and collaboration that is invaluable.
I would also like to take this opportunity to remind you to renew your membership with ACTLA. Your continued support is vital as we strive to enhance our advocacy efforts and amplify our collective voice in the legal landscape of Alberta. Your membership not only grants you access to exclusive benefits but also empowers us to pursue our shared goals with greater impact.
At ACTLA, we remain steadfast in our commitment to advocating against No-Fault Insurance through our robust Government Relations efforts. We continue to engage with policymakers, educate stakeholders, and champion policies that prioritize fairness and justice for all Albertans. Your support and involvement are instrumental in these endeavors, and together, we are making a difference.
As we navigate the opportunities and challenges that lie ahead, I am confident in our ability to drive positive change and uphold the principles we hold dear. Thank you once again for your unwavering support of ACTLA. Together, we are shaping a brighter future for civil trial lawyers in Alberta and beyond.
Warm regards,
Joy Jeong Executive Director Alberta Civil Trial Lawyers Association
Dear Members of the Alberta Civil Trial Lawyers Association,
I hope this message finds you well. As we approach the end of another successful quarter, I wanted to take a moment to update you on the current state of our membership and financial standing, as well as to encourage those who have not yet renewed their memberships to do so.
I'm pleased to report that about 70% of our members have already renewed their memberships for the upcoming year. Your continued support and commitment are truly appreciated. However, approximately 30% of our members have yet to renew. If you are among this group, I strongly encourage you to renew your membership at your earliest convenience. Your involvement is crucial to the strength and vitality of our association.
We are also actively looking to expand our community. If you know any colleagues or peers who would benefit from joining the Alberta Civil Trial Lawyers Association, please direct them our way. New members are always welcome and bring fresh perspectives that enrich our collective efforts.
Lochlin Zhao Membership & Finance Coordinator, ACTLA
I'm delighted to inform you that our association is in good financial standing. We are on track to meet our budgeted goals for the year, thanks in large part to the generosity and support of our members. To date, we have received approximately $200,000 in donations. These contributions are instrumental in enabling us to continue our work and further our mission.
We remain open to receiving more donations, which will help us enhance our programs and services even further. If you or your firm are considering making a donation, your support would be greatly appreciated.
If you have any questions or need assistance with your membership, please do not hesitate to contact me at membership@actla.com. Your feedback and suggestions are always welcome as we strive to better serve our members.
Thank you for your ongoing support and dedication to the Alberta Civil Trial Lawyers Association. Together, we can continue to make a significant impact in our field.
Sincerely,
Lochlin Zhao
Finance & Membership Coordinator
Alberta Civil Trial Lawyers Association
B.Ed., LLB., FCIP
Barrister, Solicitor, Mediator, Arbitrator, Conflict Resolution Trainer
Member of the Canadian Academy of Distinguished Neutrals and Member of the BC Mediation Roster Society
Onerefrain I often hear in my work with ACTLA is "why hasn't anyone come and talked about this in Alberta yet?" more often than not in the context of some new tech tool or software advancement that's sweeping practices on either coast. Sometimes it even comes from my counterparts in the United States, which has led us at The Barrister to suspect a simple yet chilling conclusion:
If Canada is known for being slow to adopt new technology, then maybe Alberta is slow even by Canadian standards.
It's certainly not an ideal position to be in, and while there is some understandable reluctance to adopt foundation-shaking (or sometimes, -shattering) new technologies, the unfortunate reality is that Albertan lawyers, courtrooms, and indeed our entire provincial legal system are on the back foot of a technological arms race that firms in other provinces are not only embracing, but trailblazing.
This edition of The Barrister was initially conceived as a way to bring some of the tools used by lawyers across Canada to light and help give you, the reader, some ideas of where you might start looking to introduce or improve new technologies to your practice. In creating this edition, it has evolved into more of a discussion on the place of technology in the practice of law.
Communications & Event Services
We bookend our discussions on tech with two articles by legal market strategy and business consultant and Masterclass 2024 feature speaker Heather Suttie. "The Value of Creativity and Imagineering to Legal Business Strategy" makes an excellent case for keeping an open mind and bringing creativity to a profession not exactly known for imagination and creativity by embracing the things that make you and your practice unique. "A Brave New World: AI and Legal Tech" wraps up our discussion on technology by encouraging embracing AI and technology because it gives you more time to be exactly what you are - a human advocating on another's behalf.
Shelagh McGregor of Weir Bown, Charles E. Gluckstein of Toronto's Gluckstein Law, and Morgyn Chandler of Hammerco Law have been kind enough to provide articles on how their respective firms have embraced different technologies to improve their practices, and the kinds of technologies they think firms should be embracing to remain competitive in the near future. Similarly, Nathan Lee of Calgary's Origin GRC has provided a handy guide to self-assess and optimize your firm's technology for efficiency and growth. I want to make it as clear as possible that neither The Barrister's editorial staff nor ACTLA itself endorses specific solutions for your firm - but we do hope that you can find something within the discussions that works for you and maybe even helps put you ahead of the curve.
Unrelated to tech, we've published the full Section 581 Advances Refresher and Update paper prepared for Plaintiff's Only 2024 by Joe Nagy. Bottom Line's article Vehicle Damage as a Factor in Assessing Causation and Extent of Plaintiff's Injuries rounds out our edition and provides some well-researched points that I hope can be of use to our readers.
Keep an eye on your emails as Masterclass 2024 announcements should be coming your way shortly. If you end up exploring any tools or ideas in this edition, please let us know by contacting communications@actla.com - we love to know when the content of our magazine benefits the membership!
Regards,
Nash Calvert Editor-in-Chief, The Barrister | Communications & Event Services
Alberta
Civil Trial Lawyers Association
By Keith McLaughlin New West Public Affairs
The Alberta Civil Trial Lawyers Association (ACTLA) recently participated in the Alberta Auto Insurance Summit on May 27th, which brought together the insurance industry, medical professionals, and the legal community to discuss practical solutions for lowering auto insurance premiums for Albertans.
Following the summit, ACTLA has had several productive meetings with government officials, the Insurance Bureau of Canada (IBC), and other stakeholders about how best to promote fairness, accountability, and affordability in Alberta’s auto insurance system within an at-fault model and avoid the horror stories we’ve seen from British Columbia, which enacted no-fault insurance in 2021.
Throughout the summer, ACTLA is continuing efforts to engage with government officials and the insurance industry to find commonsense solutions that avoid implementing a no-fault insurance system in Alberta. This push is part of a broader campaign to ensure that any reforms in the auto insurance sector protect the rights and freedoms of Albertans, promote accountability, and offer real consumer choice.
ACTLA has always advocated for auto insurance reforms that focus on promoting affordability, accountability, consumer choice, and protecting the rights and freedoms of Albertans to seek fairness through impartial courts of law.
Jackie Halpern, spokesperson for Fair Alberta Insurance Regulations (FAIR Alberta), has been a prominent voice in the media, articulating the concerns and preferences of Albertans for several weeks now. Halpern has been engaging with radio shows and journalists across the province to discuss how the current at-fault system aligns better with the values of fairness and personal responsibility cherished by Albertans.
Recent polling conducted by Janet Brown Opinion Research, commissioned by FAIR Alberta, revealed significant opposition to the no-fault insurance model. The data indicated that 61% of Albertans oppose the principle of equal treatment for all drivers in a crash, and 71% dislike the inability to sue the at-fault driver. These findings underscore a strong preference for the current at-fault system, which Albertans believe is more just and fair.
The summer will see continued efforts to gauge public sentiment, with more polling planned to further understand and amplify Albertans' views on this critical issue. The consistent message from these polls will inform and strengthen ACTLA's and FAIR Alberta's advocacy work.
FAIR Alberta has rolled out an extensive public awareness campaign to continue informing Albertans about the drawbacks of no-fault insurance and advocate for better solutions to reduce insurance rates. This campaign includes targeted advertisements on radio stations like 630 CHED Edmonton and QR 770 Calgary, strategic placements on urban digital boards, and a robust presence on social media platforms including Facebook, Instagram, and Twitter.
As the fight against no-fault insurance continues, ACTLA and FAIR Alberta remain committed to ensuring that any changes to Alberta's auto insurance system reflect the values and needs of Albertans, and provides a fair, accountable, and affordable framework for drivers that protects civil rights.
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By Heather Suttie
Creativity and imagineering are a powerhouse combination elevating a legal service business into another stratosphere
Strategy pertains to influencing things you cannot control. This is why legal business strategy can be challenging to lawyers who tend to be risk averse by temperament and are trained to hone this characteristic. They prefer to be in control of a situation.
Control is a factor in why the practice of law involves the application of yesterday’s precedents to today’s problems. History is known and usually documented. Therefore, it provides a degree of control. Applying the past to the present is what lawyers do, how they construct arguments, and where they often excel.
However, the business of law is another matter. It requires creativity and imagineering that are future-focused and often without precedents.
Creativity and imagineering in the business of law are not as prized as the learning of law and legal practice. In reality, traditional legal education has little if anything to do with the business of law. Yet, legal service is a business complete with its own industry code: 5411. And the business of law is where strategies pertaining to creativity and imagineering apply most readily.
Creativity and imagination are both nouns. Activating them to become verbs means getting ideas out of your head and executing on them, which makes them real. Otherwise, creativity and imagination dwell in the land of overthinking.
Overthinking tends to be a lawyer trait that goes hand-in-hand with admiring a problem. But problem admiration and overthinking get you nowhere. Solutions are required as well as actions that get them done.
The trick to harvesting the fruits of creativity and imagination is either having the experience of knowing how to execute on them or finding someone who does. Otherwise, creative strategies and imagined ideas become the stuff of magical thinking and fanciful fairy tales that live in your head until they go poof and disappear
Creativity is an often-neglected factor of legal business strategy. Why? Because lawyers rely on evidence and, better yet, proof to support arguments including those related to running their business. This is why the evergreen statement, “We’ve always done it this way” and its pushback cousin, “Who else has done it this way and had success with it?” continues to hobble forward motion within traditional law firms and staid legal management.
It is also why those who may be intimidated by the change management processes that come with creativity and imagineering often mount a defense.
A symptom of this is usually a barrage of aggressive questions that rain down upon the head of whomever is daring enough to propose creative change along with a demand to instantly provide data points that prove beyond a shadow of a doubt that whatever is proposed will work effectively and efficiently the first time.
This mulish stance is vexing to people who are working to move the business of legal service forward, and who are propelled by innovative management objectives, strategies, tactics, and most importantly, execution.
These are the same dogged souls who often find themselves in the equivalent position of pushing a pill up a hill with their nose.
I’m one of them. This is my hill. Sometimes I think I’ve been dead up here for years.
In 2006, Canada’s Lexpert magazine hatched a one-off issue titled “100 Creative Lawyers”. I can’t recall criteria used to measure the creativity of those featured, but do remember that when this publication appeared I was providing interim management for a national law firm that had a number of lawyers listed in this edition. Unfortunately, two of these lawyers had been misidentified, so a correction and compensation was requested.
Since the issue was about creativity, I wrote to the
publisher about the error and my expectations for a make-good arrangement using two stanzas of poetry set in iambic pentameter. The publisher – a non-practising lawyer – responded with an offer also in iambic pentameter. I confirmed our agreement in limerick.
That’s the thing about creativity; it reframes a situation in a unique fashion.
The advantage of creativity is that it enables a mind-wide-open world of possibilities that launch as a result of answering a question asked in first year university Philosophy class. That question is: Why? The answer is not: Because. The answer is: Why not?
While imagineering has been around since the middle of the last century, the first time I heard about it was during my broadcast management years in the mid 1980s. At that time, imagineering was a creative process applied to broadcast engineering and production.
Since 1990, the word “Imagineering” has been registered as a trademark of Disney Enterprises, Inc. that employs imagineering to “make the impossible possible.” Disney describes it as “the creative engine that designs and builds all Disney theme parks, resorts, attractions, and cruise ships worldwide, and oversees the creative aspects of Disney games, merchandise product development, and publishing businesses.”
Even though the word is trademarked, making the impossible possible is not. Impossibilities are made possible all the time in various industries and fields of endeavour, and miracles happen every day.
Devising and implementing new and imaginative concepts are entirely within our reach. So why not use them to advance business within the legal service industry?
Them Together
Creativity and imagineering go together like salt-and-pepper. It’s hard not to think of one without the other. Individually, creativity and imagineering each has a plethora of applicability to the legal service industry. This applicability runs the gamut from education and training, to onboarding and mentoring talent, business development and client work, pricing, billing and collection, and tailoring infrastructures and management structures that enable profitability while also providing flexibility.
But pairing them results in a powerhouse combination.
Together, creativity and imagineering elevate the business of legal service into another stratosphere – one that realizes what can happen when old and tired ways of doing things are jettisoned so that what is new and better-applicable to today’s expectations for getting things done can take off and accelerate unimpeded.
I can tell you from experience that the results of strategically applying creativity and imagineering to a legal service business are real, fulfilling, and exhilarating. This is because the outcome every time is a bright-lined business definition, crisp market distinction, and a clear path forward. And as Disney well knows, there’s nothing Mickey Mouse about a business strategy like that.
This article appeared on Legal Business World, October 2023, republished with permission from the Author.
By Shelagh McGregor
In today’s fast paced legal environment, it is essential to harness technology to allow you to spend your time on what you are good at – composing legal arguments and advocacy – and not on things that technology can do for you, oftentimes faster and more accurately. Technological advances allow you to access information, including from your own file, more quickly, and allow you to ensure you are providing the most accurate information to the Court, your clients, and opposing counsel.
My practice includes a significant amount of trial work, and it includes doing medical malpractice trials across Alberta. If I am to do a trial in another city, it is impractical to haul the entire file in paper form. Courts expect you to move quickly. By having my file entirely electronic, if an issue arises with respect to notice that was given on a particular point or another issue that requires me to access a particular detail on the fly, I have the ability to provide an answer to the Court in very short order – sometimes I would require a short recess, but oftentimes I don’t even need to do that. I cannot count on less than 2 hands how many written submissions my team has had to provide the Court within hours of evidentiary issues arising at trial. A delay in providing the Court the relevant information or your submissions could result in a delay in your trial schedule, and waiting months, or years, to get things back on track.
In order to effectively advocate in today’s courts, you
must have an understanding of the systems that are used during court hearings or trials. Courts expect you to work within their systems, which are increasingly more electronic. For example, the Alberta Court of King’s Bench just rolled out its CCM software, which requires counsel to upload their materials for special chambers applications. If you are not familiar with the software and its requirements, you risk the judge not having your materials for your hearing, which risks you not getting the outcome you are seeking.
Trial judges are increasingly likely to grant the ability to have your witnesses testify remotely via Zoom or WebEx. While most of us are quite familiar with using Zoom for questionings, the procedure for trial witnesses is more complicated than in questioning. For example, cross examination requires thought about what you need to put to the witness and how they will access it. In a recent trial, my neuroradiology expert prepared a PowerPoint with the actual MRI images that he shared during his testimony, which he had marked up to point out his findings. He testified remotely and it was important to ensure that the PowerPoint worked – otherwise his description of what he found on the imaging would have been completely abstract.
I will take this opportunity to advocate for the Court to onboard an electronic system to allow for electronic uploading of exhibits, like Caselines, which I understand is used in Ontario and accessible by all parties in real time. It would eliminate the need to send sealed envelopes to the opposing party’s witnesses in anticipation of cross-examination, which I have seen done in the past.
I am a huge advocate for PowerPoints, so I can pro vide visuals associated with any argument. Triers of fact and opposing counsel retain more information if they have visuals associated with your argument. I have used PowerPoints for special chambers and mediations, as well as opening statements and closing arguments at trial. The feedback I have received from mediators about including PowerPoints is very posi tive.
One should also consider how to incorporate videos into their advocacy. A picture is worth a thousand words, and a video is worth a thousand pictures. It is particularly helpful for giving context to a plaintiff’s injuries and damages. It is important to integrate videos into your argument, and I often will integrate videos into my PowerPoints.
Even the most basic technology – a searchable PDF – can be a very important tool. For example, in the cross examination of your client at trial, having the transcript in a searchable PDF format allows you to ensure what is being put to your client is accurate, and there is no further context. I have had numerous instances where what has been put to my client is not the entirety of the evidence on the particular point. The relevant transcript evidence may not be in the same spot in the transcript as what is put to the wit ness, so key word searches are critical to ensure the Court is not misled.
Most litigation firms have had electronic limitations systems and accounting software for many years. Document management and case management soft ware have been used by larger firms, but we are coming to the point where smaller firms will need to onboard this software.
There are many examples of such software. Our firm onboarded Filevine in January 2023, which is a software that is catered to personal injury firms. Onboarding it was a process that took a long time, but in my opinion, it was well worth it. There are always some lawyers who despise the change. However, there are many benefits I have found in the first 18 months of using it:
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Making Numbers Make Sense
• It streamlines work by staff – things like document generation functions and workflows automate some of the work, ensuring things don’t get missed, letters and pleadings are formatted properly, and are automatically filed in the proper folder in the electronic file. A further benefit is if lawyers are inclined to learn about these functions, they can generate
by your team members to allow you to follow up, and where the majority of your good cases come from, which allows you to allocate your marketing dollars more effectively. I use the report function every week when I meet with my assistant to touch base on what each of our priorities are, to allow me to see what her todo list entails.
"AIwillnotreplacelawyers,butlawyerswhouseAIina smart,effectivewaywillreplacethelawyerswhodonot."
their own documents in a circumstance where your assistant or paralegal is unavailable (such as the Sunday prior to a Monday trial, as I’ve had to do more than once).
• It provides a structure for new staff and lawyers, to allow them to get up to speed quicker. I’ve found this is particularly useful for brand new assistants.
• It streamlines filing of emails – gone are the days when people don’t file their emails, leaving other team members in the dark.
• It enables team work, particularly in a workfrom-home environment. The entire team has access to the entire file, and multiple aspects of the work can be done simultaneously. It also allows you to more fully supervise your junior lawyers when they are not in the office every day.
• It runs reports and provides real data on many metrics – including things like general productivity data, which tasks are not yet complete
The time of artificial intelligence is now. Our case management software has rolled out a service to summarize medical records and draft settlement proposals. The use of AI is something that most lawyers are hesitant to use due to horror stories of how open AI has drafted inaccurate briefs and invented cases. It is incumbent upon us to investigate how AI technology can both help and hurt our practices. It has the potential to allow us to better serve our clients, for less money, allowing for better access to justice. However, we need to ensure any AI technology we use does not expose our clients’ confidential information. The solution to these concerns is not to dismiss AI technology out of hand, especially when the technology is developing so rapidly – it is important to educate ourselves on its risks and benefits as time goes by. AI will not replace lawyers, but lawyers who use AI in a smart, effective way will replace the lawyers who do not.
Shelagh embodies the spirit of justice as a seasoned lawyer dedicated to guiding her clients through the legal system with empathy and skill, relishing the challenges of trial work an advocating for her clients in the courtroom.
As a mother herself, Shelagh understands firsthand the importance of listening and empathizing with her clients, many of whom are also mothers, drawing from her own experiences to ensure their voices are heard throughout the legal process.
Shelagh feels privileged to guide her clients through the legal process, recognizing the weight of their decisions and feeling lucky to assist them in navigating this challenging journey, providing support every step of the way.
Shelagh’s dedication to her clients and her profession has earned her recognition, including the ACTLA President Award in 2015 and the Edmonton Bar Association Eileen Nash Memorial Award in 2019, upholding the highest standards of advocacy and excellence as a member of the Litigation Counsel of America.
By Charles E. Gluckstein, Managing Partner
As a personal injury lawyer with decades of experience, I have witnessed firsthand the profound impact of technological advancements on the legal profession. I have had a personal interest in computers from an early age, and have always prioritized modernizing our firm to include the latest and greatest technology. One positive consequence of COVID-19 was that it forced the profession and Courts to embrace virtual meetings and proceedings, which rewarded those who had equipped their firms with robust document management systems.
Many of us practiced before the emergence of fax machines and word processors. I started practicing in 1999 and took it upon myself to convert our firm into a paperless office as soon as possible. Today, we stand at the cusp of a new revolution with the integration of Artificial Intelligence (AI) in the legal sector, a development that promises to be as transformative as any that preceded it.
Adapting quickly is not only imperative in our practices as we navigate the advancements from Microsoft, Google and Apple, but is also crucial in the courtrooms. Our justice system is becoming rapidly intertwined with the rise of technology with both virtual hearings and document management software, and Courts are divided on how to deal with the rising application of AI.
We have journeyed from the simplicity of paper and
pen, through the digital revolution of emails and the Internet, to now standing at the threshold of the AI era, where machines promise to not just complement, but amplify human intelligence and judgment.
While AI holds great promise in streamlining legal research and document preparation, it also raises important questions about lawyers' responsibility and accountability in the courtroom. This short piece explores our evolving role in our offices and in the courtroom. It also discusses our essential duty to protect our clients’ confidentiality and take ownership of our communications, while also continuing to navigate the complexities of an AI era.
A very short history of how we got to AI in Legal Tech:
Imagine a time when computers were just calculators, and along came Alan Turing with a wild idea: "What if these machines could think?" This was the 1950s, and Turing wasn't just daydreaming; he was planting the seed for what we now call AI. Fast forward through the decades, and AI has taken a rollercoaster ride from science fiction to science fact. In the 1990s, it started to become really smart, learning from the data it was fed. Now, AI is like the cool new wizard in town, transforming everything it touches, including the law. It's not just doing our tedious work but it is also offering advice on complex legal mazes. From Turing’s “Can machines think?” to today’s AI that can almost outthink us, we’ve come a long, exciting way. It’s a
tale of human imagination, tech wizardry, and yes, a bit of magic!
In the context of personal injury law, AI’s role extends from automating administrative tasks to providing sophisticated analysis of legal precedents and case law. Reflecting on the recent advancements in generative AI, I am both intrigued and cautious. This technology, capable of synthesizing vast amounts of legal data, could be invaluable in predicting case outcomes and streamlining document preparation. However, as someone who values the human element in legal practice, I am mindful of the need to balance AI's efficiency with the personal touch that is fundamental to our practice.
The introduction of virtual legal assistants and automation tools is a significant leap from the days of traditional legal research. These AI-driven systems offer a level of efficiency and accuracy that was unimaginable when I began my practice. Yet, I remain vigilant about ensuring that these tools complement, rather than replace, the critical thinking and judgment that lie at the heart of legal decision-making.
The ethical and legal challenges posed by AI are perhaps the most complex that I have encountered in my career. Issues like data privacy, algorithmic bias, and the accountability of AI-driven decisions are new territories that require careful navigation. As a seasoned practitioner, I advocate for a cautious approach, ensuring that these powerful tools are used responsibly and ethically to navigate the challenges that need to be addressed.
Historically, lawyers have been regarded as officers of the Court, with a fundamental responsibility to uphold justice and the rule of law. We are not only advocates for our clients; we are also tasked with ensuring the integrity of the judicial process. This duty is enshrined in legal ethics, where codes of conduct stress the importance of candour, fairness and honesty in all interactions with the Court.
In an age where technology is omnipresent, lawyers must strike a delicate balance between leveraging AI tools and fulfilling their ethical obligations. AI can
be a powerful ally in legal research, data analysis and document review, allowing lawyers to work more efficiently and effectively. However, this should not translate into a wholesale delegation of responsibilities to machines or support staff. Lawyers must remember that they are ultimately responsible for the accuracy and integrity of the information they present to the Court.
One critical aspect of lawyer responsibility is the duty of candour to the tribunal. Lawyers are obligated to provide truthful and complete information to the Court, even if it may not be favorable to their clients' interests. This duty remains steadfast in the face of AI's involvement in the legal process. Lawyers cannot simply rely on AI-generated documents or information without critically evaluating and verifying their accuracy.
Moreover, lawyers must ensure that they maintain a deep understanding of the legal principles and precedents that underpin their arguments. AI can assist in legal research, but it cannot replace the nuanced legal reasoning and judgment that lawyers bring to the courtroom. Lawyers must be able to explain and defend their positions in a manner that demonstrates their legal expertise and commitment to the justice system.
The emergence of “Deep Fakes” – highly realistic and manipulated audiovisual content generated by AI –poses new challenges in the legal arena, especially in personal injury cases. In particular, Deep Fakes can ultimately jeopardize the integrity of evidence presented in Court. They can be used to create false narratives or manipulate existing evidence, complicating the process of establishing facts and determining credibility. For example, there have been instances where lawyers have relied on AI tools to gather case law in support of their clients’ positions, only to discover that the tools relied upon had generated supportive case law that does not in fact exist.1
Further, the impact of Deep Fakes on witness testimony, jury decisions and the overall judicial process
1 See, for example: https://www.nytimes.com/2023/05/27/nyregion/avianca-airline-lawsuit-chatgpt.html
is a pressing concern, forcing Courts and Regulators to consider measures and create rules to address this challenge. For legal professionals, the challenge lies in the identification of Deep Fakes and the counter-measures that must be developed and employed in detecting and preventing their intrusion into the judicial process.
Additionally, there are legal and ethical considerations where the use of Deep Fakes impacts our court proceedings. The justice system needs to strive for a balance between technological advancement and legal integrity, the need for new regulations and laws to address these challenges, and the role of legal education in preparing practitioners to deal with such advanced AI-generated content.
On the one hand, AI's capabilities in data analysis, predictive modeling and automation have the potential to enhance efficiency, accuracy and accessibility in legal services. These benefits include faster legal research, more accurate case outcome predictions and improved case management.
On the other hand, the deployment of AI in legal settings also carries significant risks and challenges. These include concerns about data privacy, the potential for algorithmic bias leading to unfair outcomes, and the lack of transparency in AI decision-making processes. Additionally, there is a risk that an in-
creased reliance on AI could lead to a depersonalization of the legal process, impacting the lawyer-client relationship and the human-centric aspect of legal practice.
The integration of AI in personal injury law is a double-edged sword. While it offers unprecedented opportunities for efficiency and innovation, it also presents new challenges that must be met with wisdom and foresight. As someone who has experienced the technological evolution within the legal field, I am cautiously optimistic about this new era. Embracing AI's potential while safeguarding the values and ethics of our profession will be key to ensuring justice and fairness in the age of digital transformation.2
Charles Gluckstein was called to the Ontario Bar in 1999. His practice focuses on catastrophic injury claims from personal injury including birth trauma, medical negligence, motor vehicle claims, occupier liability issues, and all areas of disability law.
Charles is the owner and Managing Partner of Gluckstein Lawyers and has guided the firm to become the leaders in Personal Injury in Canada. He has been endorsed by his peers as a leading personal injury lawyer in both Best Lawyers in Canada and Lexpert directories. He frequently lectures at conferences for legal organizations, both locally as well as outside of Ontario on all topics of personal injury as well as the modernization of the profession using technology.
Charles served for many years on the Board of Directors rising to become the President of the Ontario Trial Lawyers’ Association from 2013-2014. Since 2014, Best Lawyers® International has consistently recognized him as a leader in the personal injury field. In 2014 he was awarded the LEXPERT Zenith Award for Leading Personal Injury Lawyer in Practice Excellence, recognizing thought leadership and setting new standards for the Personal Injury Bar. In its annual publication, the Canadian Legal LEXPERT® Directory has listed Charles as being repeatedly recommended by his peers in the area of personal injury for the Toronto region.
Charles also acts as an advocate to assist other lawyers in understanding and embracing legal technology and related strategies. In 2021 Charles received the award for Best Use of Technology.
By Nathan Lee
A well-crafted IT strategic plan is essential for aligning technology with your law firm's goals. It's not just about acquiring the latest gadgets; it's about making informed decisions that drive your firm's success. In a highly competitive industry, delivering exceptional services, fostering effective communication between your firm and clients, and providing ongoing support for your staff are critical. Ensuring your team has the tools they need to excel and contribute to the firm's profitability requires a deeper understanding and thoughtful planning.
Lawyers often struggle to allocate sufficient time and resources to running their business. The core reason you became a lawyer was to practice law, spend time with clients, and offer legal advice. Hence, business operations can often get in the way. The harsh reality is that the legal tech landscape is rapidly changing the way legal services are delivered, and opportunities to improve efficiencies and client experience cannot be ignored.
Statistics show that 62% of law firms have adopted cloud-based technology, leading to a 40% increase in efficiency and a 35% reduction in administrative tasks. Moreover, 74% of lawyers who use practice management software report better work-life balance, and firms that implement advanced legal tech see a 20% increase in client satisfaction. By adopting the right technology solutions, more lawyers can streamline their work, improve accuracy, reduce administrative burdens, and provide higher quality services. Embracing these technological advancements is no longer optional; it’s essential for staying competitive and ensuring the success of your practice.
In the legal field, technology should be more than just a tool—it should be a strategic asset that propels your firm forward. One common pain point is the misalignment of technology and business goals. Too often, lawyers try to solve problems by adding new technology before they fully understand the problem they are trying to solve. This leads them into a den of "we can deliver" sales reps, who try to sell them on the next gadget or gizmo. Bombarded with bells and whistles, features and benefits, the lawyer concedes and purchases the software, only to realize that it is not a right fit, or they already have a similar product, or the staff end up creating workarounds to bypass the program altogether. This disconnect can lead to wasted resources, missed opportunities, and frustration.
With every new technology solution, a lawyer may head in the wrong direction, implementing new software, new processes, and new outcomes that do not meet the firm’s goals. This adds complications to an already complex processes and leads to cost overruns in support, licensing, and other technology services. In the end, they’ve lost sight of the end goal.
Aligning your IT strategy with your business goals is crucial for several reasons:
• Maximizing ROI: When technology investments are aligned with your firm's objectives, you ensure that every dollar spent contributes to your bottom line. According to a report by Forrester Research, firms that align IT with business goals achieve a 20% higher ROI on their technology investments.
• Enhancing Efficiency: Technology can automate
tasks, streamline workflows, and improve communication, freeing up your team to focus on high-value activities. The American Bar Association (ABA) found that firms implementing legal tech solutions experienced a 25% increase in efficiency.
• Improving Client Service: Modern legal tech solutions can enhance client communication, provide secure portals for document sharing, and streamline the onboarding process. According to Clio's Legal Trends Report, 79% of clients expect law firms to leverage technology for better service delivery.
• Gaining a Competitive Edge: By leveraging technology strategically, you can differentiate your firm from competitors and attract new clients. The Thomson Reuters survey noted that firms using advanced legal tech tools were 35% more likely to attract new clients.
• Mitigating Risk: Robust cybersecurity measures and data backup solutions protect your firm's sensitive information and ensure business continuity. The ABA reported that 70% of firms without proper cybersecurity measures experienced data breaches compared to only 30% with strong cybersecurity protocols.
Understanding your firm's current IT state is essential for identifying potential areas for improvement. IT assessments provide a comprehensive evaluation of your technology infrastructure, revealing strengths, weaknesses, and vulnerabilities that could pose risks if left unaddressed. To effectively leverage these assessments, it's crucial to consider three key elements: People, Process, and Technology.
People: Leveraging Internal and Client Insights
Your people are a critical component of any IT assessment. Employees, who use the technology extensively, often have valuable insights into the needs of the organization and its clients. Engaging with your
staff during the assessment process ensures that their experiences and suggestions are considered, leading to more effective technology solutions.
Clients, too, play a crucial role in the assessment process. Understanding their needs and expectations can help tailor your IT strategy to enhance client satisfaction. Delivering on client needs not only demonstrates that you are attentive and responsive but also improves their experience and helps attract new business.
Internal assessments of your operational processes, including legal matter management, offer extensive insights into key functions that can be enhanced with the right technology. By streamlining workflows and automating repetitive tasks, technology can significantly improve the delivery of legal services. Evaluating your current processes allows you to pinpoint inefficiencies and implement solutions that create more value for your clients.
By pinpointing bottlenecks and inefficiencies in your IT infrastructure, assessments pave the way for streamlined workflows and improved productivity. A report by Deloitte found that law firms could increase productivity by 20-30% through optimized IT processes. This can translate to more billable hours and better service delivery.
By identifying areas where you can consolidate resources or eliminate redundant systems, assessments can lead to significant cost savings. A PwC survey indicated that firms could reduce IT costs by up to 25% by eliminating redundancies and optimizing resources.
An IT assessment starts with a detailed analysis of your current technology setup. This evaluation helps in identifying outdated systems, security vulnerabilities, and areas where new technology can enhance efficiency. Understanding the present state of your IT infrastructure is vital for planning future upgrades and ensuring your firm stays competitive in an increasingly digital landscape.
According to a study by the Ponemon Institute, the average cost of a data breach in 2023 was $4.45 million. Identifying and mitigating these risks through regular IT assessments can prevent such financial and reputational damages.
The assessment of people, processes, and technology help you understand how your technology aligns (or misaligns) with your firm's strategic objectives, ensuring that your IT investments are driving your business forward. According to a survey by PwC, 80% of law firms acknowledged that aligning IT with business goals was essential for growth and client satisfaction.
Armed with the insights from an assessment, you can make informed decisions about gaps in technology
operations, the following will help you navigate the essential steps. By defining clear goals, assessing your current IT landscape, and setting actionable initiatives, you'll position your firm for a secure and prosperous future.
Here’s a roadmap to get you started:
What are your firm's top priorities? Increased efficiency? Enhanced client service? Cost reduction? Your IT strategy should directly support these goals. According to a survey by Thomson Reuters, law firms that clearly defined their business goals saw a 20% increase in overall efficiency. Stop spending money only in IT maintenance, think innovation, think differently.
"Inthelegalfield,technologyshouldbemorethanjustatool— itshouldbeastrategicassetthatpropelsyourfirmforward."
upgrades, investments, and strategic planning. A Gartner report highlighted that firms with regular IT assessments made better technology investment decisions, leading to a 15% higher return on investment (ROI) on IT expenditures.
The transition from your current IT state to a desired future state involves strategic planning and implementation. By conducting thorough assessments and reviews of your people, processes, and technology, you can identify areas for improvement and develop a roadmap for achieving your future goals. This proactive approach offers a significant advantage over competitors who may not take the time to comprehensively assess and plan their IT strategies.
Aligning technology with your firm's goals is more crucial than ever. A well-crafted IT strategic plan serves as your roadmap to success, guiding you towards greater efficiency, enhanced client service, and cost savings. Whether you're aiming to upgrade your infrastructure, prioritize cybersecurity, or streamline
Take stock of your existing technology infrastructure. Identify strengths, weaknesses, and areas for improvement. A comprehensive IT assessment can provide valuable insights for this step. These assessments are readily available from an IT Managed Services Provider or Consultant: a third-party provider is recommended.
Based on your goals and assessment, outline specific IT projects that will move the needle for your firm. This could include upgrading software, implementing cybersecurity measures, or migrating to the cloud. For instance, the International Legal Technology Association (ILTA) found that cloud migration could reduce IT costs by 30% while improving accessibility and security.
Set realistic timelines and allocate budgets for each initiative. This will help you stay on track and avoid overspending. Annual budget planning is recommended to help avoid rogue projects, and other initiatives from scope creep, leading to
ballooned budgets and cost overruns. The ILTA report highlighted that firms with detailed IT strategic plans were 40% more likely to complete IT projects on time and within budget. If its not in the plan it must be scrutinized.
Protecting sensitive client data is paramount. Make cybersecurity a top priority in your IT strategic plan. Always ask questions around security, policies, and governance when choosing the next technology for your firm. The ABA reported that 26% of law firms experienced a security breach in the past year. Investing in robust cybersecurity measures can mitigate this risk. Check Vendor security as well.
Establish key performance indicators (KPIs) to track the success of your IT initiatives. Regularly review and adjust your plan as needed. Basically, know what you want and regularly review if the technology is giving you the value you need to reach your goals. According to Gartner, firms that regularly evaluated their IT strategies saw a 15% improvement in performance metrics.
Based on my experience working with legal professionals, I've identified several common obstacles that prevent many firms from creating an effective IT strategy. A survey by LexisNexis indicated that 45% of law firms lacked a formal IT strategy.
• Lack of time: Many firms operate out of urgency, working on the side of their desk on business operational initiatives and IT projects.
• Overuse of Committees: Committees in law firms, formed to tackle tasks like implementing new technology, often lead to extensive hours spent in meetings and research and could be better utilized.
• Firm Communication: Firms fail to communicate their IT strategies for the firm and gain buyin from each practice group and department to support overall business objectives.
• Poor IT Processes: Inefficient IT processes will hinder any strategic planning. Addressing productivity and service delivery is a priority.
• Limited Standards: Without standardized IT practices, firms can face inconsistencies and security vulnerabilities. No sense planning for innovation if basic standards are not in place.
• Jump to New Tech: Investing in technology without fully utilizing its capabilities is a common problem. Leaving gaps in the business and added expenses in training and support can put any future plans on hold.
• Lack of Process Improvement: An IT plan requires continuous improvement to maintain an efficient IT environment. Firms should have a process for executing the plans that are well documented and followed by all.
• Poor Tech Understanding and Leadership: A lack of IT knowledge among leadership can impede strategic decision-making. Investing in IT education for firm leaders can bridge this gap.
• Friction with Current MSP: Issues with Managed Service Providers (MSPs) can disrupt IT operations. Clear communication and well-defined contracts can help manage these relationships effectively.
• Confusion About Options: The multitude of technology options available can be overwhelming. Firms should conduct thorough research and seek expert advice to navigate their choices effectively.
A well-crafted IT strategic plan is not just a luxury— it's a necessity. Aligning technology with your law firm's goals is essential for achieving greater efficiency, enhancing client service, and ensuring cost savings. The effort to assess, plan and execute an IT strategic plan offers numerous opportunities to improve productivity, accuracy, and client satisfaction. However, without a thoughtful and strategic approach, these opportunities can quickly turn into pitfalls.
By understanding the common obstacles that law firms face, such as lack of time, poor IT processes, and misalignment between technology and business goals, you can proactively address these issues. Regular IT assessments, clear communication, and ongoing process improvements are critical components of a successful IT strategy. Investing in the right technology and training your staff to utilize these tools effectively can lead to significant benefits, including higher ROI, increased efficiency, improved client service, and enhanced cybersecurity.
Ultimately, embracing technological advancements and aligning them with your firm's strategic objectives will help you stay competitive and secure your firm's future success. Don't let the challenges deter you; instead, use them as a roadmap to build a robust and forward-thinking IT strategy that drives your firm towards excellence.
Sources:
1. Ponemon Institute. (2023). Cost of a Data Breach Report.
2. Deloitte. (2023). Legal Technology Survey.
3. PwC. (2023). Law Firm Technology Alignment Report.
4. PwC. (2023). Law Firm Technology Cost Savings Report.
5. Gartner. (2023). IT Assessment Impact Study.
6. Thomson Reuters. (2023). Law Firm Efficiency Survey.
7. International Legal Technology Association (ILTA). (2023). Cloud Migration Benefits.
8. International Legal Technology Association (ILTA). (2023). IT Strategic Planning Success.
9. American Bar Association (ABA). (2023). Cybersecurity in Law Firms Report.
10. Gartner. (2023). IT Strategy Evaluation Study.
11. Forrester Research. (2023). Technology Investment ROI Report.
12. American Bar Association (ABA). (2023). Legal Technology Efficiency Report.
13. Clio. (2023). Legal Trends Report.
14. Thomson Reuters. (2023). Legal Tech Adoption Study.
15. American Bar Association (ABA). (2023). Cybersecurity Practices in Law Firms.
By Morgyn Chandler
"Anothertrapthatlawyersfrequentlyfallintoisthemistaken beliefthatlawfirmsaresouniquethatonlylawyerscanbe involvedintheoperations:thisissimplynottrue.Thebusiness oflawisabusiness,andafirmshouldberunlikeone."
It has been a tumultuous several years in British Columbia for personal injury lawyers. We moved from a full tort system, to having caps on “minor injuries” in 2019 and then, in 2021, new legislation came into force transforming us into a no-fault jurisdiction. Some firms adopted a wait and see approach and, with the end of motor vehicle accident claims upon us, they are now reckoning with where to go. Other firms, like Hammerco, saw the writing on the wall and took steps to get in front of the changes and begin a transformation years ago. I took on the role of Managing Partner in 2020 and over the past 5 years have managed an overhaul in our practice areas, our systems and processes, and our technology. Hammerco is a case study for innovation in a mid-size law firm. The challenges and obstacles we have encountered and overcome provide lessons for how to succeed in building a leading edge firm.
For many firms, the pandemic was a catalyst for change because it was forced upon them. Digital transformation became an imperative for firms who were stubbornly clinging to outdated modes of practice to embrace new forms of technology and communication. Now that the dust has settled, many firms are reverting to their previous practices; calling people into the office full-time, over-reliance on paper, and ignoring the mental health challenges lawyers face, to name a few. But there are tremendous opportunities
for firms who want to continue to update and improve their practice. There is more technology in the legal sector than ever before and the market is competitive. It’s not about adding new tools and technology on top of what you already have just for technology’s sake, but about being thoughtful and intentional about how the tools available can improve performance and efficiency. The firms that smartly leverage AI and other tools to build on and add to their existing strengths have the opportunity to pull ahead.
But let’s take a step back. The first thing you need in order to innovate your law practice by any significant degree is a desire for change. In my experience, if a change effort is being led by only one individual, it is doomed to failure. Outside of the cost associated, which will of course be a discussion for the firm leadership, there has to be a firm-wide understanding of why the change is necessary and how it will help each individual. It’s not about what the change will do, but rather how will it improve your efficiency, effectiveness, and your client experience, because there is a direct line from all of these to your bottom line. Enlisting internal advocates early to help you promote the tool or product will be key to its adoption along with a thorough change management plan.
Historically, mid-sized law firms have been slow to change and reluctant to invest in innovation and
technology. There are many reasons for this, but in my view the prevailing issue is that a partnership is often made up of successful lawyers at different stages in their careers who prioritize their own remuneration and exit strategy above that of the law firm as a whole. It is very challenging to get a group of disparate individuals, even those bound by partnership, to agree to make a six or seven figure investment in technology. But this is a limiting, short-term view. For example, moving to the cloud can be disruptive and expensive, but there are immediate and long-term savings that are realized by eliminating on-premises servers and the associated technical support. Once in the cloud, utilizing SaaS (software as a service) platforms can boost automation and integration, leading to further efficiencies. The firm’s leadership should be able to support their position with data and research to persuade their partners that investing in technology is in the best interests of the firm, and all of them.
Often, firms are not using the tools that they already have to their full potential. You should be asking your tech what it is doing for you on an ongoing basis. It’s an investment of time and training to understand how tech platforms work to the fullest and what new
features are being added on. But if you don’t, you may be purchasing and stacking products with overlapping and duplicative tools. A yearly audit of your systems and an update on what features they include can result in significant savings simply by eliminating overlap. Hammerco uses FileVine for our case management software, and FileVine is investing heavily in continuous updates and improvements, which means we see the benefits of new technologies in our practice in real time. The analytics have also given us insight into where we are experiencing obstacles in our processes so that we can make constant improvements. It is worth spending time on researching what tools are out there to understand what the right product is for you. Many case management software platforms are integrating AI and are trying to solve more problems for law firms than ever before. Modern case management software has also recognized that client’s needs have changed. And much of this new tech integrates tools that allow you to contact your clients by text, or share documents within a client portal. Keeping your clients informed and demonstrating that you are on the leading edge in terms of the products you use will give you an edge over your competition.
But, who has the time? Researching the available tech options can be a full-time job, and in a mid-size firm, the partners or owners are already wearing multiple hats and simply don’t have the time or inclination to prioritize the operational work over the legal work. Again, it comes down to a desire to change. For some firms, the solution may be bringing on a COO or office manager who can take on some of this work. But it doesn’t have to require a full-time position. There are consultants and fractional COO’s who can be brought on for a narrowly focused project and help you implement at a fixed cost.
Another trap that lawyers frequently fall into is the mistaken belief that law firms are so unique that only lawyers can be involved in the operations: this is simply not true. The business of law is a business, and a firm should be run like one. Innovation isn’t limited to technology, sometimes it is about changing a mindset. Hiring outside the legal world can give you a tremendous advantage when it comes to the process and systems of delivering your product (the legal service). It can also provide a fresh perspective on the client experience. Modern law firms adopt a client-centric mindset and must recognize that a client’s experience as it pertains to communication, updates, and transparent billing practices will have a direct impact on the bottom line for the firm. Many marketing companies offer client journey mapping as part of their services, and this can be invaluable for identifying pain points and harnessing technology to streamline your systems.
Morgyn Chandler is the Managing Partner at Hammerco Lawyers and leads the firm's civil sexual assault group. She is a forceful advocate with a successful track record of winning exceptional results for her clients.
With over a decade of litigation experience, Morgyn has a reputation for successful resolution based on persuasive and astute legal strategies. She believes that establishing and maintaining open, honest, and ongoing communication with her clients is critical to ensuring the best possible outcome.
In addition to practicing in the areas of personal injury and estate litigation, Morgyn is the practice lead for Hammerco’s civil sexual assault group. She acts on behalf of survivors of sexual assault and is a powerful advocate for her clients against both individual and institutional defendants. Morgyn believes that survivors deserve to be heard, and respected, and deserve the opportunity to hold perpetrators accountable.
Morgyn is a sought after speaker in her field, and has been named for her work in Personal Injury Litigation by Best Lawyers in Canada since 2020.
Part of shifting the mindset when it comes to innovation is also recognizing that our employees’ expectations are not what they used to be. Many employees, both lawyers and support staff, are looking for flexibility. Finding a balance of in-office time to focus on training and mentoring, while also facilitating work from home flexibility is key to maintaining a leading-edge position. Each firm must find what works for them, whether it is a structured schedule of time in office and at home, or more flexibility, but it begins with an exploration of how people work, what work is being done, and what that work requires. Despite the overwhelming evidence that hybrid work is linked to increases in productivity, leaders still lack confidence in the productivity of their staff. Transparent conversations about the challenges of hybrid work, and bringing employees into the conversation, can help rebuild trust, which in turn will help with recruitment, retention, and productivity.
Successful innovation requires time, discipline, and a strategy, but mid-size and smaller law firms are uniquely positioned to adjust. The first step is to identify the problem you are trying to solve and then begin building the business case for change.
By Heather Suttie
Four pillars of legal service business excellence enable achievement of the key objective – to win – and support professional and personal happiness.
Four pillars of legal service business excellence enable achievement of the key objective – to win –and support professional and personal happiness.
Aldous Huxley’s ground-breaking book, “Brave New World” was written in 1932. It explores the perils of a society that prioritizes stability and efficiency over individuality and emotion.
Are we there now?
In March 2023, Artificial Intelligence brain trusts called a six-month all-stop on further development of artificial intelligence. The timing was a tad late since the genie was out of the hard drive, never to be coerced back inside. However, this daunting proposition was one of the reasons for the AI moratorium and the “mind how you go” message.
Minding how you go is serious business in the riskaverse legal services realm, especially when anyone who works with lawyers knows there’s one surefire
way to get their attention: scare them. Scare tactics are often effective because lawyers are trained to be aware of risk, avoid it like the plague, and tend to be worldclass worriers.
So, is it any wonder that for years, lawyers have been scared to death that technology will take over their jobs? It is true that technology has been and will continue to be injected into work of all kinds – including legal services – but being scared solves nothing and only causes inertia and retreat, which are career-limiting moves in themselves.
This is why if ever there was a time to sharpen your market strategy, narrow niche your practice, deliver value consistently, and be your true self, it’s now. That’s because strategy, niche, value, and authenticity are the four pillars of legal business excellence that enable achievement of the key objective – to win – and support professional and personal happiness.
Only you can do this. AI can’t, at least not yet.
High-performance law firms and legal service providers focus on three success factors extraordinarily well, and act and manage accordingly:
1. Commit to long-term objectives, mid-term strategies, and short- term tactics, and execute on them ruthlessly within time boundaries.
2. Attract targeted clientele, and continually grow and retain key client relationships.
3. Hire and nurture client- and firm-aligned talent, and cull with speed and respect those who don’t meet the mark.
Lawyers provide legal service; service being the operative word. Service is a business of caring for others. If, within your target markets, you consistently foster:
• Marketing – building profile
• Business development – nurturing relationships
• Client retention – ongoing care Then sales and referrals can happen more readily and easily.
This is an easy lesson in theory and hard learned in practice. While these are fundamental factors in the business of law, for some unfathomable reason they have yet to be embedded in law school curriculums and often not learned in practice.
This is why law school is rudimentary. Learning the business of law is critical and the first step is to understand that transformative growth hinges on market strategy and that development of market strategy is the critical key to achieving your objective to win.
Successful narrow niche practices require walllike boundary setting, barnacle-like adhesion, and intestinal fortitude to decline work that is not in your wheelhouse.
This strategy is effective because walls enable doorways, adhesion underpins resolve, and declining suboptimal work opens opportunities for referrals and reciprocity.
Anyone who knows me is fully aware that I advocate for a narrow niche practice and industry alignment because this strategy works every time.
For example, professional engineering friends of mine who have narrow niched into select manufacturing sectors have been attracting the very work they want for over 30 years. Medical professionals who specialize in niche facets withing select areas of health care become go-to’s, often receiving and accepting offers to practise in lucrative markets.
I have seen this level of success with my own 25-year legal market practice that has become more narrowly niched over time. And lawyers I’ve coached into a narrow niche practice attract more work from a better class of clientele, and enjoy healthier work styles and more leisure time, which is the true measure of wealth. They have also seen revenue jump by 1,100 per cent –no, that’s not a typo, – make better business decisions more easily, fast-track to the bench, etc.
This is because a narrow niche practice enables you to be one of one and therefore, the go-to for exactly the type of work you want and in which you excel.
Technology is fast catching up to impact lawyers, especially those who churn paper for a living.
Still, technology and artificial intelligence are soulless. At least so far. Some of humanity’s best qualities, such as empathy, consideration, humour, fairness, and care plus the peculiarities that are part-and-parcel of our own personality traits are not apt to be found in tech or AI.
This is where value comes to the fore.
Not so long ago the phrase “value proposition” was all the rage. Was it a fad? No. Providing value is the key to unlocking new opportunities and nurturing relationships you want to retain and grow. The key is to demonstrate and deliver consistently on the value you propose.
Run of the mill value-adds such as thought leadership articles, social events, complimentary CLE sessions,
staffing solutions, and discounts can be on offer until the twelfth of never, but still not deliver value according to clients.
This is because value and price are not as related as you might think.
For example, a client firm of mine charges eyewatering fees, but clients tell me they’ll never leave. Why? Because even though this firm has always been the most expensive on almost every company’s law firm roster, the humanity and care extended by every person with whom clients deal – receptionists, lawyers, paralegals, assistants, couriers, you name it
And why were these firms fired? Because they didn’t listen. Once the dust settled and we talked about replacements, active listening was priority one.
That’s because clients want a proactive partnership with professionals who care about their welfare and provide ideas and paths to success.
Fulfilling this expectation is not hard, but it takes time and thoughtful consideration of needs, wants, and wishes, as does assisting a client to get where they need to go by proactively sharing vision, ideas, and experience that can help smooth their path.
The key to delivering value consistently is to always
"...clientswantaproactivepartnershipwith
...It'sneveraboutyou."
– is thoughtful and genuine, goes above and beyond every client’s expectations, and therefore, provides ongoing value that results in continuous loyalty, goodwill, and referrals.
Value is subjective and emotional. It is intimate and often best delivered on a one-to-one basis. This is because value is perceived differently by every individual and changeable on every matter over the duration of a firm/lawyer/client relationship.
Even though value is based on perceptions, it’s also provable. This is why keeping communication channels open consistently and by design, and not by accident or when working on an active matter, is a critical factor to delivering value when on task and, often more importantly, when off.
Clients want to be listened to – not just to be heard, but also understood. Failing to execute on this simple facet of exemplary value and sterling client service can have severe ramifications.
Such was the fate of three major firms who were fired from a roster of eight Canadian law firms by a mild-mannered General Counsel friend of mine with whom every law firm in the country wanted to work.
remember the cardinal rule: it’s never about you.
The strengths and limitations of AI are set out in its name. While it’s intelligent, it’s also artificial.
You are intelligent and real. And, yes, if you sense you have the personality of a turnip and all the sparkle of a wet Kleenex, AI tools can draft or buff up your bio. But still, it’s better to inject humanity into all areas of your practice since the authenticity of you being you will eclipse AI every time and for the better.
This is why sharpening your market strategy, niching your practice, and providing evidentiary value are key elements of legal business excellence that only you can do.
Easy to accomplish? Oftentimes, no. Life-changing? Absolutely. I’ve seen it happen successfully time and again with law firms and lawyers with whom I’ve worked over the years especially when they are fueled with curiosity, determination, and grit, and supported by experience and patience.
But authenticity – a rather overused word of late – is critically important personally as well as
professionally. That is because you are enough.
Shakespeare got it right in Polonius’s speech in Hamlet, “to thine own self be true.” This quote has always been my north star to the point where it appears on a small plague by my front door. Glancing at it when going out into the world reinforces this pledge to stand in my own power.
As mentioned in my article, One and Only: “‘You are you – whether you are an individual, law firm, or legal service business. Never copy. ‘Imitation is the sincerest form of flattery that mediocrity can pay to greatness,’ said Oscar Wilde who, to simplify his point stated, ‘Be yourself; everyone else is already taken.’” And while you’re focused on being you, get out from behind your desk, pull your face out of your phone, and connect with real live people every day and as often as humanly possible.
Doing so along with developing a legal market strategy, narrowing your practice niche, and delivering value consistently will make all the difference to winning your professional objectives and nurturing your personal happiness, especially in our brave new world.
Heather Suttie is widely acknowledged as one of the world’s leading authorities on legal market strategy and management of legal services firms.
For 25 years, she has advised leaders of premier law firms and legal service providers worldwide — Global to Solo | BigLaw to NewLaw — on innovative strategies pertaining to business, markets, management, and clients. The result is accelerated performance achieved through a distinctive one of one legal market position and sustained competitive advantage leading to greater market share, revenue, and profits.
The effect is accomplishment of the prime objective — To Win.
By Joe Nagy
Any experienced injury lawyer has encountered a similar situation to this. Your client is in a motor vehicle accident. Your client is seriously injured. Your client is disabled from working due to the motor vehicle collision. Your client's spouse takes care of the household and five children. Section B benefits do not cover the family's financial needs or perhaps the Section B benefits have been exhausted. Your client has no private plan that provides disability benefits. Perhaps private disability benefits have been terminated. Your client has to borrow from third-party lenders or sell property to continue to feed their family, or pay for treatment costs. As a compassionate lawyer, how do you help this client?
Section 581 of the Insurance Act, RSA 2000, c I-3 reads:
(1) When an insurer makes a payment on behalf of an insured under a contract evidenced by a motor vehicle liability policy to a person who is or alleges to be entitled to recover from the insured covered by the policy, the payment constitutes, to the extent of the payment, a release by the person or the person’s personal representative of any claim that the person or the person’s personal representative or any person claiming through or under the person or by virtue of the Fatal Accidents Act may have against the insured and the insurer.
(2) Nothing in this section precludes the insurer making the payment from demanding, as a con-
dition precedent to the payment, release from the person or the person’s personal representative or any other person to the extent of the payment.
(3) If the person commences an action, the Court must adjudicate on the matter first without reference to the payment, but in giving judgment the Court must take the payment into account and the person is entitled to judgment only for the net amount, if any.
(4) The intention of this section is to permit payments to a claimant without prejudice to the defendant or the defendant’s insurer, either as an admission of liability or otherwise, and the fact of any payment must not be disclosed to the judge or jury until after judgment but may be disclosed before formal entry of the judgment.
(5) The Lieutenant Governor in Council may make regulations:
(a) authorizing the Court to make an order requiring an insurer to make a payment under this section to a claimant in advance of any judgment;
(b) prescribing or otherwise describing the circumstances under which an order referred to in clause (a) may be made.
Section 581 of the Insurance Act works in conjunction with Section 5.(3) of the Fair Practices Regulation, Alta Reg 128/2001, which reads:
The Court may make an order under section 581 of the Act, on any conditions it considers appropriate, requiring the insurer to make a payment to a claimant who applies to the Court under subsection (2) of this section where the Court is satisfied that
(a) as a result of the injuries of the claimant, the claimant is unable to pay for the necessities of life, or
(b) the payment is otherwise appropriate.
The introduction of Civil Practice Note 1 has made it more difficult to schedule Section 581 Applications. I would strongly discourage anyone from bringing Section 581 Applications in regular chambers with a hearing time limit of 20 minutes. The type of evidence you will require for the 581 Application is abundant. You need to make sure you address all of the statutory requirements and case law requirements with a comprehensive Affidavit sworn by your client. Your client may be cross-examined on their Affidavit. Therefore, you will be required to bring a Special Chambers Application and comply with Civil Practice Note 1. Specifically, 14(a). The time constraints simply do not allow for the Defendants right to cross-examine your client on their Affidavit, or to provide undertakings to the defence before the Brief due date. You will require an Order extending the deadlines. A Consent Order signed by both parties is useful; however, the Court is not bound by the Consent Order. The Consent Order only assists the Court in ordering scheduling deadlines.
In Shannon v 1610635 Alberta Inc, 2014 ABCA 393 (CanLII), Justice Cote writes for the majority of the Court of Appeal in paragraph 37:
Without repeating explanations and qualifications found above, here is a brief recap of the tests:
1. An order for an advance payment requires two things:
At the time of drafting this paper, I have uncovered 13 published decisions on Section 581 advances:
I. Shannon v 1610635 Alberta Inc, 2014 ABCA 393 (CanLII)
II. Stewart v Insurance Corporation of British Columbia, (2014) ABQB 578 (CanLII)
III. Siemens v Co-Operators General Insurance Co., (2015) ABQB 578 (CanLII)
IV. Bexson v Williams (2014) A.J. No 713, ABQB, online: QL
V. Han v Royal & Sun Alliance Insurance Co. of Canada, (2016) A.J. No 569, ABQB, online: QL
VI. Graham v. Peace Hills General Insurance Co., [2018] A.J. No. 497, ABQB online: QL
VII. Macrae (Litigation representative of) v. Intact Insurance Co., [2017] A.J. No. 489, online: QL
VIII. Needham v. Economical Mutual Insurance Co., [2019] A.J. No. 233, ABQB, online: QL
IX. Alexander v. TD General Insurance Co., [2019] A.J. No. 225, ABQB, online: QL
X. Simpson v. Co-operators General Insurance Co., [2017] A.J. No. 298, ABQB, online: QL
XI. Patel v. Certas Direct Insurance Co., [2020] A.J. No. 793 (Q.L.)(K.B)
XII. Bennett v. Certas Home and Auto Insurance Co. [2019] A.J. No. 604 (QL)(K.B.)
XIII. Villeda v. Wawanesa Mutual Insurance Co., [2004] A.J. No. 112, online: QL
Han, Simpson, MacRae, Bennett, and Needham are cases for which I have brought Section 581 applications, all of which were successful.
(a) the defendant is probably liable to the plaintiff for the amount requested (or more); and
(b) without that payment, the plaintiff is likely to go without necessities (or things broadly analogous), or unlikely to be able to prosecute his or her claim for damages.
2. If #1 is satisfied, the court should weigh approximately the plaintiff’s likely loss without an advance payment against the defendant’s likelihood of overpaying (looking at probabilities and money amounts in both cases).
3. The court should flexibly consider imposing terms and conditions on one of the parties, to mitigate the risk to one or both parties.
It is important to provide the Court a range of general nonpecuniary and pecuniary damages where possible. In Stewart v Insurance Corporation of British Columbia, (2014) ABQB 578 (CanLII) the court writes:
There is no doubt that the Applicant should be entitled to some general damages for pain and suffering. There appears to be little doubt that the claim for past or future loss of income will be made out. This will require a careful balancing between this type of loss and the general damages that relate to Mr. Stewart continuing to work with pain.
The difficulty is that the range of general damages is not properly, or adequately made out. At this stage I would simply be pulling a figure out of the air.
This is also emphasized in Siemens v Co-Operators General Insurance Co. (2015), ABQB 578 (CanLII).
The plaintiff might have demonstrated a housekeeping loss, or a care loss corresponding to the husband’s loss of income (he is not a party). She also could demonstrate what her generals would be worth at a minimum. A reference to Goldsmith (Damages for Personal Injury and Death) might be enough, at this stage. But there is none of this.
In Shannon (supra), Justice Cote writes for the majority:
One term should be virtually routine. Any plaintiff getting an advance payment should give a formal written covenant, or an undertaking (promise) enforceable by the court, to repay any ultimate overpayment, with interest. And that plaintiff should charge any other benefits to come from the accident from anyone, with that repayment.
I usually consent to this in the Brief.
One of the tests outlined in Shannon is that the Court should flexibly consider imposing terms and conditions on one of the parties to mitigate the risk to one or both parties. The flexibility is broad and some examples are as follows:
In Bexson v Williams (supra) the Court awarded an advance payment of $35,000 payable in $5,000 monthly installments.
In Han v Royal & Sun Alliance Insurance Co. of Canada (supra) the Court awarded a $40,000 advance in installments of $20,000, $10,000, and $10,000 payable June 2, 2016, August 2, 2016 and October 3, 2016.
In Graham v. Peace Hills General Insurance Co., the Court awarded an advance in the amount of $10,000, payable as a lump sum.
In Macrae (Litigation representative of) v. Intact Insurance Co., [2017] A.J. No. 489, online: QL, the Court awarded an advance in the amount of $75,000, payable as a lump sum.
In Needham v. Economical Mutual Insurance Co., [2019] A.J. No. 233, ABQB, online: QL, Justice Fagnan awarded the Applicant an advance in the amount of $40,000. $20,000 of this advance was to be payable forthwith and the remaining $20,000 was to be paid out in monthly installments of $1,500.
In Alexander v. TD General Insurance Co., [2019] A.J. No. 225, ABQB, online: QL, the Court awarded an
advance in the amount of $75,000, payable as a lump sum.
In Bennett v. Certas Home and Auto Insurance Co. [2019] A.J. No. 604 (QL)(K.B.), the court awarded $25,000, with $5,000 payable as a lump sum up front, with the remaining funds payable in $1,000 intervals over 20 months.
In Villeda v. Wawanesa Mutual Insurance Co., [2004] A.J. No. 112, online: QL, $3,000 per month for a period of 12 months for a total of $36,000 was awarded.
Tying s. 581 payments to steps in the litigation is clearly inappropriate and would defeat the objective of the Rules of Court and the purpose of S. 581. The reality of personal injury litigation is that the defense can delay the litigation, and accordingly, the payment to the plaintiff. This was discussed in Han.
THE COURT: All right. One of the things I was going -- and here I don't know if this makes any sense or if it could be useful in any way. What if -- and because there -- I know that there was a concern which isn't reflected in the tests or in the regulation or legislation, there's a concern about what the money is going to be spent on, would it make any sense to stage the payments? Like, if -- so if X dollars were paid now and Y dollars were paid and then Z dollars were paid, or whether it should all just come as a lump sum, any thoughts about that? Because, you know, I imagine even in our economic situation now, I mean, she doesn't need $40,000 today. What she needs is enough to get by, but I'm not saying that she should get, you know, a thousand a month. But I'm -- but what if we were to break this up into two or three payments, or something like that?
MR. NAGY: I can't say I would have those instructions from my client. I would not -- I would not be opposed to that myself –
THE COURT: Right.
MR. NAGY: - personally, but I could certainly say that, you know, she is a -- for example, she's got two $5,000 loans to pay off quickly which she'll probably do with the settlement funds.
THE COURT: Right.
MR. NAGY: And then, you know.
THE COURT: So that takes -- that's 10,000 right there.
MR. NAGY: Yeah, 10,000 plus.
THE COURT: So if we -- if we were -- what if we were to have two payments, say one of 20 within, is two weeks too quick?
MS. PROUDFOOT: Sir, I can advise that my adjuster is actually on holidays at the moment. So if I could have until the end of the month –
THE COURT: All right. What if we were to say –
MS. PROUDFOOT: - that would be appreciated.
THE COURT: What if we were to say 20 by -- I'm looking for a calendar [sic] here.
MS. PROUDFOOT: And on that note, Sir, I would add that there are authorities suggesting that the Court is encouraged to impose terms which will facilitate a timely resolution of the matter so that –
THE COURT: Right.
MS. PROUDFOOT: - we don't wind up in a situation where the defendant is paid a settlement advance, and then all of a sudden it's brakes on the action.
THE COURT: Right.
MS. PROUDFOOT: And the courts have suggested that in -- in those circumstances, a staggered approach is appropriate that may also, in fact, impose terms on the litigation suggesting -- not a litigation plan of sorts, but that there will be timelines during which steps will be taken, and payments will be made in accordance with those steps.
THE COURT: All right. What if we were to say -- okay, so we are at the 18th today. Oh. Well, what if we were to say first payment by June 2nd, and I'm thinking $20,000, because, again, she's got the loans outstanding. She needs at least that amount, and that would give her the ability to -- to pay off the 10,000 loan, with a 10,000 cushion, which would carry her for a period of time. And I'm wondering whether the -- so June 2nd for the first payment, 20,000. What if we were to go with 10,000 on August 2nd, and 10,000 on October
3rd? Does that -- does that make sense, because that -- that provides some assurance to the payor in this case that the brakes won't be put on, and -- and that the money won't be just -- just blown, though in -- from one perspective, you know, it doesn't -- who cares? I mean, it doesn't matter. She gets the money, she can do with it what she wants, but that does reduce the financial impact so you don't have -- you're not out-ofpocket immediately.
MS. PROUDFOOT: If I may submit, Sir, that instead of setting forth the payments on -- in accordance with the schedule, like the calendar [sic] months.
THE COURT: Right.
MS. PROUDFOOT: Perhaps we could do it in accordance with some of the next upcoming steps in the litigation. So Mr. Nagy has very promptly provided a number of undertakings –
THE COURT: All right.
MS. PROUDFOOT: - since our -- the examination in January. I don't have any reason to believe that that's not going to continue, and that's certainly not my implication in any sense, but perhaps if we could have the second payment made when answers to undertakings are complete, and then that third payment made perhaps, you know, in accordance with when we determine IMEs will be exchanged, or expert -- you know, we'll notify –
THE COURT: Okay.
MS. PROUDFOOT: - one another of expert reports.
THE COURT: So we'd have 20 that would be coming June 2nd, and then what I'm hearing is 10, completion of undertakings, and then 10 –
MS. PROUDFOOT: Let's say maybe three months after completion of undertakings, the expectation is the parties will notify one another of expert reports.
MR. NAGY: You know, the problem I have with that, My Lord, while it may sound reasonable, we know the real -- what -- the realism of litigation, especially personal injury litigation –
THE COURT: Right.
MR. NAGY: - is that what happens if my friend says,
well, you haven't answered your undertakings.
THE COURT: Right.
MR. NAGY: And what happens if my friend says, well, I don't want to do my DME's at this time? And what happens if my friend says, well, we don't want to set this trial down, set this down? They get to control the steps in the litigation.
Now, the plaintiff has an obligation to move the matter forth in a timely manner, but I don't think there's under -- anything under Section 581 which suggests that the defendant can control the steps –
THE COURT: Right.
MR. NAGY: - procedurally by which payments should be made.
THE COURT: Okay. Well --
MR. NAGY: I would -- I would say, submit that June 2nd, August 2nd, October 3rd, 20,000, 10 and 10, as you have suggested, would be fair.
THE COURT: Okay. That's what -- and that's what we'll go with, then. We'll go with the June 2nd -- June 2nd, August 2nd and -- August 2nd and October 3rd.
Trial grade evidence is not required for a S. 581 advance payment. A Judge must be able to reach a fair and just determination of the merits of the application. The record must allow the Judge to make the necessary findings of fact. In Simpson, Justice Renke writes:
The second reflection on the evidential foundation for an advance payment order is that at this stage of proceedings, we are not in a trial. We haven't heard viva voce evidence, and I take Mr. Nagy's point that a Court must ensure that it's not unfair to plaintiffs by demanding evidence suitable for trial long before the trial, and the way I put this point earlier is that it wouldn't be proper to run the trial before the trial is run.
[...]
Further to this point about the evidential foundation for an advance payment order, the evidence
that will be required is going to be dependent on a particular case. So a case-by-case approach is going to be required, and that's because the amount of evidence or the type of evidence required will vary, depending on the nature of the accident, depending on the medical history of the plaintiff leading up to the accident. It will depend on what's occurred to the plaintiff following the accident, and it will turn on any medical evidence that's available at the time of the application.
So we don't have trial grade evidence at this point, but simply the nature of the proceeding, and I do keep in mind that we can't impose unfair standards relating to the evidential record on a plaintiff at this point.
It is clear that the evidentiary standard on a Section 581 advance application is a balance of probabilities. In Simpson, Justice Renke writes:
During the application, there was discussion of the evidential foundation for an advance payment order, and I'll offer three reflections for considerations. Mr. Matthews has suggested in his materials that a plaintiff is subject to a high standard of proof, and I -- I don't agree with that formulation of the approach as being consistent with the authorities, for these reasons. First, the standard of proof is balance of probabilities, and that's confirmed in paragraph 15 of Shannon and in Justice Crighton's Bexson, [2014] A.J. No. 713 decision. What we read in paragraph 10 is that the applicant need not prove his case on a balance of probabilities at this early stage, and somewhat later in paragraph 10:
. . . but the applicant must demonstrate, on a balance of probabilities and with the evidence available to the Court, that he will probably meet the civil standard of proof at trial for the recovery he seeks.
And the Bexson approach is reflected in the decision of Justice Schlosser in Stewart v Insurance Corporation of British Columbia, 2014 ABQB 578 at paragraph 19, and at item 3 of that paragraph, Master Schlosser
writes that:
An advance payment requires, among other things, that the applicant has demonstrated that it is probable that liability will be established on a balance of probabilities.
Justice Burns, in Alexander, followed the approach taken by the Court in Macrae (Litigation representative of) v. Intact Insurance Co., [2017] A.J. No. 489, online: QL and held that contrary to Rule 3.8(2) of the Alberta Rules of Court, Alta. Reg. 124/2010, hearsay evidence presented by both parties is acceptable in Section 581 applications.
The Applicant should provide a comprehensive list of household income to assist the Court in establishing the necessities of life equation.
In Patel v. Certas Direct Insurance Co., [2020] A.J. No. 793 (Q.L.)(K.B), the court states:
Where a claimant is in a spousal or common-law relationship, the "necessities of life" equation requires an x-ray of household income and assets. If the outcome of a "no advance payment" decision is that the claimant's "basics" will continue to be covered by his partner, the test for funding is not met. He may have some obligation to square up with her down the road -- e.g. after any trial or settlement of this action -- but that does not mean his "necessities" will not be covered in the meantime.
It is important to identify and frame the issues outlined in the statute and case law clearly for the Court. I identify the issues as follows:
Issue #1: Is the defendant probably liable to the applicant for the amount requested or more?
Probability, liability, and damages are key elements, the importance of which cannot and should not be
ignored. Failure to establish these would likely result in an unsuccessful application.
With respect to issue #1, the Affidavit will need to satisfy the Judge that liability is not in issue. In a typical motor vehicle accident case, a collision report form showing that the Plaintiff was a passenger in a rear end motor vehicle collision is useful. Never underestimate the burden of proving liability. You may think that this point should be so obvious that it need not be proven. In Macrae, I was faced with such an argument. My client was a passenger in a motor vehicle. The Defendant operator stopped at a secondary road. He looked, saw no traffic, and proceeded on to the highway when it was unsafe to do so and a collision ensued. I was shocked, but not surprised, when I received the Defendants brief arguing that I had not proven liability. Obviously my Brief was lacking on this point. I was more shocked when the Judge began with “Mr. Nagy, I am not convinced you have proven liability and I would like to hear your submissions on that first.” Justice Ackerl wrote:
In written material, the plaintiff did not reference admissible evidence surrounding the actual accident to support its position of probable liability. This application is an originating application and by virtue of Rule 3.8(2), a statement of facts within the personal knowledge of the person swearing the affidavit must describe the content of such affidavit.
Here the evidence contained in the affidavit of Mr. MacRae discussing his view of the accident was clearly hearsay. The reference I'm speaking to is contained in the March 22nd, 2016, affidavit of Wayne Richard. While describing the accident in general detail, Mr. Richard did acknowledge in questioning that he was not present at the accident and had no personal knowledge of what occurred. In effect, this is hearsay evidence of unknown reliability and presumptively inadmissible. I note no argument was advanced to support admissibility as either a principled or recognized exception.
In oral submissions, counsel for the plaintiff tendered documentation to support his argument that probable liability lies with the defendant. In
particular, he pointed to a questioning for discovery of Keith Toews which, in his view, provides a more fulsome explanation of Mr. Toews' evidence surrounding what occurred. In effect, that transcript contains questions and answers concerning Mr. Toews' behaviour in his viewing of the intersection before entering that particular location. He also applied to enter into evidence a copy of an Information indicating that Mr. Toews, the driver, pled guilty to failing to proceed safely after stopping at an intersection. That conviction relates to events on April 7th, 2014, and, indeed, more particularly to the incident underlying the tort claim in this application.
I do note that, in the transcript I have just referred to, that Mr. Toews did admit to paying that particular fine.
There was some argument advanced about admissibility and whether or not there was technical compliance with the Alberta Evidence Act as it pertained to the Information copy provided, and to the Alberta Rules of Court to admission of the questioning for discovery. I am prepared to admit both documents into evidence for my consideration. In exercising that discretion, I note the philosophy of Mr. Justice Renke in a recent decision in which, in essence, he recognized the importance of attending to this type of application in an expeditious manner, provided the record permitted a fair and just determination. In effect, Justice Renke's approach was to not require a trial before a trial. Given the helpful submissions advanced by counsel, and their willingness to address this particular issue, and recognizing that counsel for the defendant objected to its admissibility, I have come to the opposite conclusion, as already noted.
The use of the word "probably" in issue number #1 is aligned with the evidentiary standard of the balance of probabilities. Liability can usually be proven through the introduction of a collision report form. I've also used portions of transcripts of the Defendant's discovery evidence to assist in proving liability.
The tort action and the 581 Application are separate actions. On the face of it, there is an implied Undertaking not to use information or documents gathered in the tort action in the Section 581 application. The implied undertaking has been codified in the Alberta Rules of Court as rule 5.33. I've yet to encounter an Application where counsel did not agree to waive the implied undertaking of confidentiality. I expect the Court would grant an Order lifting the implied undertaking on request. The issues in the tort action and 581 Application are extremely similar and very intertwined. In L.(P) v Alberta, 2012 ABQB 309, 2012 CarswellAlta, 1001 529, A.R, 21, 64 Alta L.R (5th) 322, Justice Graesser determined that Rule 5.33 is a codification of the common law. He writes:
Considerations in determining whether the implied undertaking should be lifted include the presence of fraud or criminal wrongdoing, whether the information could have been obtained from other sources, whether third parties are involved, and whether the new proceedings are connected with he proceedings in which disclosure was made, in the sense that they involved the same or similar parties, the name or similar issues, and arise out of the same series of events.
One of the Plaintiff's obligations is to provide as much evidence in support of damages for the Court. In my past Applications, I have attached numerous expert reports generated in the tort action to prove damages. There is a pitfall to doing this. Rule 3.13(2), permits a person to be questioned under oath as a witness for the purpose of obtaining a transcript of the persons evidence for use at the hearing of an Originating Application. Combined with Rule 5.33 and Justice Graesser’s comments on lifting the implied undertaking, this would permit the defence to request the clinical records of an expert whose report was relied upon in support of the Originating Application. It effectively allows the same counsel defending the Originating Application and the tort action to cross-examine your expert. This a terrible technical downfall for Applicants in a Section 581 Application. To avoid this, one's
only option is to hold onto the expert reports generated in the tort action and only rely on clinical records. This weakens the strength of the evidence that the Plaintiff is obligated to provide in support of damages. I would avoid introducing any expert reports in support of the 581 Application.
Issue #2: The second issue is, without the advance payment, is the plaintiff likely to go without necessities (or things broadly analogous), or unlikely be able to prosecute his or her claim for damages?
I have faced several arguments from the respondents counsel on this issue which have failed. Among others, these would be that the applicant is an adult living with his parents who have agreed to waive payment for rent until the tort action is resolved. Or, the plaintiff has been able to obtain bridge financing from third party lender. Or, the Plaintiff has been able to sell real or personal property to ameliorate their financial position. These arguments are put forth to argue that without the advance payment, the Applicant is unlikely to continue to go without necessities. It is important to remember that this is a twofold issue. In Simpson (supra), Justice Renke considered similar arguments and writes as follows:
The question then is under 5.6(3)(b): The payment is otherwise appropriate? Am I satisfied that the payment is otherwise appropriate taking into all of the matters that I have discussed up to this point.
I would also make the argument that the applicant was put into their financial position as a result of the Defendant in the tort action, and it would be terribly unfortunate to blame the applicant for mitigating their damages.
Issue #3: Does the risk of overpaying exceed the Applicant's likely loss without the advance payment?
At this juncture, it is important to include evidence of household finances. As mentioned earlier, in Patel (supra) the Court states:
Where a claimant is in a spousal or common-law relationship, the “necessities of like” equation requires an x-ray of household income and assets. If
the outcome of a “no advance payment” decision is that the claimant’s “basics” will continue to be covered by his partner, the test for funding is not met. He may have some obligation to square up with her down the road – e.g. after any trial or settlement of this action – but that does not mean his “necessities” will not be covered in the meantime.
Include general damage awards for the Court and income loss if it can be proven. You want to show that the amount of the advance requested is very conservative and far less than the estimated value of the Plaintiff's claim. Hence, there would be no risk of overpayments.
Issue #4: Should any terms and conditions be imposed on the Applicant to mitigate the Defendants risk?
The Shannon (supra) case states that a covenant to pay is standard and reasonable and I usually do not argue with this.
This is a contractual obligation, and one must first look to the Lenders Loan and Security Agreement for the answer. Generally, there is no question that the loan itself must be repaid upon the settlement of the tort claim. However, the following is a contractual clause taken from one such plaintiff loan security agreement:
Note that if it is anticipated that there may be more than one settlement amount in respect of the claim, each settlement amount shall be used in its entirety to repay obligations outstanding at such
time, until all obligations are repaid in full.
This, undoubtedly, binds your client to pay the advanced settlement amount to the lender to pay off financial obligations. However, this can be negotiated with the lender. I have, on certain occasions, been able to have the obligation deferred until the final settlement of the tort action. Third-party lenders have committees to consider such requests. They will usually want to know if the deferral could be a barrier to settling at a later date. One of the main considerations will be the amount of the loan and the amount of interest accrued until the final settlement of the tort action. If, for example, you would expect the value of the tort action to settle for $250,000 at a mediation in six months time, and the amount of the loan with interest is expected to be less than $50,000, the committee would be more inclined to grant a deferral. However, if the obligation to repay a $75,000 loan (or more) with interest is payable on the expectation that the tort claim will settle in two years, it is rather unlikely a deferral will be granted. In consideration of making your written request to the lender, have them consider that you will defer your contingency fee on the advance until such time the claim is resolved. Sometimes a lender would recommend accepting a partial repayment from the settlement advance and a partial deferral of the remaining balance in future interest from the final settlement.
I hope that this paper will assist in overcoming any potential barriers to obtaining a Section 581 advance for your client. These Applications are difficult. There is plenty of work involved that goes beyond the standard course of action of obtaining a settlement in the tort claim. As Plaintiff lawyers, we bring these Applications on behalf of our clients out of compassion.
Joe has been practicing motor vehicle accident injury law for over 20 years. He has been a member of the Alberta Civil Trial Lawyers Association for his entire career. He is currently a sustaining member and serves on the board as a Member at Large.
Joe has been successful in obtaining 581 advances in many cases without bringing applications and is the guru of Section 581 Applications in Alberta. Joe has five successful published decisions under Section 581 of the Insurance Act, RSA 2000, c I-3:
• Bennett v Certas Home and Auto Insurance Co., (2015) ABQB 578 (CANLII),
• Macrae (Litigation representative of) v. Intact Insurance Co., [2017] A.J. No. 489, online: QL
• Needham v. Economical Mutual Insurance Co., [2019] A.J. No. 233, ABQB; online: QL
• Simpson v. Co-operators General Insurance Co., [2017] A.J. No 298; online: QL;
• Han v Royal & Sun Alliance Insurance Co. of Canada, (2016) A.J. No 569, ABQB, online: QL
Prepared with many thanks to Walter Kubitz K.C. for his helpful feedback and contributions to the preparation of this research.
A successful claim for damages arising from a motor vehicle collision often turns on proof of causation – specifically, whether and to what extent the defendant’s conduct, on a balance of probabilities, was the cause of the plaintiff’s injuries. In the seminal decision in Athey v. Leonati, [1996] 3 SCR 458, [1996] SCJ No 102, the Supreme Court established a number of principles that govern determinations of causation, including the “but for” and “material contribution” tests, and the absence of any requirement to show that the defendant’s conduct is the sole cause of the plaintiff’s injuries. As observed by Major J, “[a]s long as a defendant is part of the cause of the injury, the defendant is liable.
In attempting to establish a causal link between the defendant driver ’s negligence and the plaintiff’s injuries, courts have sometimes been asked to consider the extent of damage to one or both of the vehicles as an indicator of the likely extent of injuries that may be causally related to the accident. Debate on this point may be particularly likely to arise in cases of low-impact collisions causing little vehicle damage, where a defendant may challenge the extent of injury claimed by the plaintiff on grounds that it is disproportionate to the physical damage and impact of the collision.
While recognizing that the extent of vehicle damage is not an irrelevant consideration, courts have repeatedly rejected arguments proposing any straight-line correlation between the scope of vehicle damage and the severity of injuries that may be attributed to the accident. On the contrary, case law affirms that no principle of law precludes a finding of serious injuries resulting from accidents with minimal vehicle damages. In all cases, the proper test remains whether the plaintiff can show on a balance of probabilities that their injuries resulted from the collision.
While both BC and Alberta courts have issued judgments indicating that the dollar amount of damage to a vehicle should not be a predictor of the extent of the injuries suffered by the plaintiff, the BC courts have been more explicit in stating a clear principle to that effect.
A decision that is frequently cited for its clear language on this point is Lubick v. Mei, 2008 BCSC 555, [2008] BCJ No 777. The plaintiff in that case was stopped at an intersection waiting to turn left when the defendant’s vehicle bumped him from behind. The plaintiff described the collision as a “jolt that I wasn’t prepared for” and the defendant said the vehicles "barely touched" and that the impact was "very light, just a little boom". Damage to the vehicles was minimal. Although the plaintiff did not initially seek medical assistance for injuries related to the accident, he subsequently received physiotherapy treatment for low back issues. Macaulay J found that the plaintiff did sustain injuries despite the low impact of the collision, and rejected the defendant’s argument that a nominal award of $1,000 was fair. Macaulay J observed that medical evidence established the injuries, and there is no legal principle barring recognition of injuries based on minimal vehicle damage:
[5] The Courts have long debunked as myth the suggestion that low impact can be directly correlated with lack of compensable injury. In Gordon v. Palmer, [1993] B.C.J. No. 474 (S.C.), Thackray J., as he then was, made the following comments that are still apposite today:
I do not subscribe to the view that if there is no motor vehicle damage then there is no injury. This is a philosophy that the Insurance Corporation of British Columbia may follow, but it has no application in court. It is not a legal principle of which I am aware and I have never heard it endorsed as a medical principle.
He goes on to point out that the presence and extent of injuries are determined on the evidence, not with "extraneous philosophies that some would impose on the judicial process". In particular, he noted that there was no evidence to substantiate the defence theory in the case before him. Similarly, there is no evidence to substantiate the defence contention that Lubick could not have sustained any injury here because the vehicle impact was slight. [emphasis added]
Lubicki was followed in Blackman v. Dha, 2015 BCSC 698, 2015 CarswellBC 1156. The 37-year-old female plaintiff claimed damages for injuries sustained in a motor vehicle accident where the defendant rear-ended her. She said her car moved forward slightly, causing her to press firmly on the brake. She felt discomfort in her neck within a few minutes of her body being jolted. After the accident, she went to meet her family at a restaurant. The cost to repair her vehicle was $1,017.25. The accident caused the plaintiff to suffer chronic cervical spine sprain/strain; chronic mechanical neck pain and possible discogenic neck pain; chronic shoulder interscapular muscle strain with possible scapulothoracic bursitis; and chronic post-traumatic headaches that were suggestive of occipital neuralgia. The defendant argued that the plaintiff’s complaints were out of proportion with the minor nature of the accident. Devlin J held that the medical evidence established on a balance of probabilities that the plaintiff’s injuries were caused by the collision:
[66] It has been well recognized by the courts that the limited amount of motor vehicle damage is not “the yardstick by which to measure the extent of the injuries suffered by the plaintiff”. As Mr. Justice Macaulay stated in Lubick v. Mei, 2008 BCSC 555 (B.C. S.C.) at para. 5:
The Courts have long debunked as myth the suggestion that low impact can be directly correlated with lack of compensable injury. In Gordon v. Palmer, [1993] B.C.J. No. 474 (S.C.), Thackray J., as he then was, made the following comments that are still apposite today:
I do not subscribe to the view that if there is no motor vehicle damage then there is no injury. This is a philosophy that the Insurance Corporation of British Columbia may follow, but it has no application in court. It is not a legal principle of which I am aware and I have never heard it endorsed as a medical principle.
He goes on to point out that the presence and extent of injuries are determined on the evidence, not with “extraneous philosophies that some would impose on the judicial process”. In particular, he noted that there was no evidence to substantiate the defence theory in the case before him. Similarly, there is no evidence to substantiate the defence contention that Lubick could not have sustained any injury here because the vehicle impact was slight [emphasis added].
In Boudreau v Zhang, 2019 BCSC 1347, [2019] BCJ No 1523, the plaintiff’s vehicle was struck from the side
by the defendant’s vehicle. The accident did not involve a violent collision - the air bags did not deploy in either vehicle and both parties drove away from the scene of the accident. MacNaughton J nonetheless found that the plaintiff had suffered a mild traumatic brain injury which was causally connected to the accident:
[20] The defendant relies, in part, on an argument that, based on the vehicle damage, and Ms. DeMarco’s biomechanical engineering evidence, it is extremely unlikely that the Accident was of sufficient force to cause Ms. Boudreau to suffer a concussion. The essence of this argument is that the likelihood of Ms. Boudreau suffering a concussion may be assessed from vehicle damage. As discussed below, Dr. Wong also considered the vehicle damage in support of the conclusions in his report.
[21] In Gordon v. Palmer, 1993 CanLII 1318 (BC SC), [1993] B.C.J. No. 474 (S.C.), Mr. Justice Thackray, when a member of this Court, rejected the proposition that vehicle damage can be used as a measure of the likelihood of injury:
[5] Significant injuries can be caused by the most casual of slips and falls. Conversely, accidents causing extensive property damage may leave those involved unscathed. The presence and extent of injuries are to be determined on the basis of evidence given in court.
[23] Even a low-impact collision can cause injury, and it is the whole of the evidence, both lay and medical, that must be considered to determine whether there has been an injury. [emphasis added]
In Duda v. Sekhon, 2015 BCSC 2393, 2015 CarswellBC 3746, the 25-year-old female plaintiff was in two motor vehicle accidents. Immediately following the first accident, in which she was rear-ended, the plaintiff began to experience pain and stiffness in her left shoulder girdle. In the second accident, the injuries from the first accident were aggravated, and the plaintiff began to experience mid and low back pain extending into the buttocks. A collision investigation report found that the speed of the first collision was less than 11 km/hr and caused only minor damage to the plaintiff’s vehicle. An injury biomechanics report found that the plaintiff was wearing a properly functioning seatbelt and did not anticipate the collision. The report concluded that the plaintiff suffered a whiplash injury consistent with collision exposure. The defendant argued that neither of the two accidents caused significant motor vehicle damage. Ball J found that the plaintiff’s evidence concerning her injuries was credible and held that the limited vehicle damage did not provide a reason to doubt her testimony:
[62] Counsel for the defendants spent considerable time and effort making the submission that the two accidents did not cause significant motor vehicle damage. However, it has been clearly established in Canadian law that minimal motor vehicle damage is not “the yardstick by which to measure the extent of the injuries suffered by the plaintiff”. […]
[…]
[67] I find Ms. Duda to be entirely credible. She did not seek to exaggerate and her evidence was present-
ed in a direct manner. She was responsive to questions, including questions posed in cross-examination. I accept her evidence with regard to her symptoms, both past and present. There was no evidence at all of any pre-existing injury or condition. I am satisfied beyond any doubt that her injuries and ongoing symptoms were caused by the two accidents in 2012. While the accidents were not significant and the damage to the vehicles was slight, the evidence points to no other cause of the injuries and symptoms experienced by Ms. Duda [emphasis added].
In Dabu v. Schwab, 2016 BCSC 613, 2016 CarswellBC 927, the 54-year-old female plaintiff suffered from neck, back, and shoulder pain, as well as psychological problems including a major depressive episode and panic attacks after a low velocity rear-end collision. The defendant testified that the accident was a “love tap” and that the plaintiff’s vehicle had pre-existing damage (which the plaintiff later admitted to). Steeves J nonetheless found that the medical evidence established the plaintiff’s physical and psychological injuries, which affected her personal life and work, were causally connected to the accident:
[29] Finally, it is well-established that minimal vehicle damage is not the “yardstick” to measure the extent of a plaintiff’s injuries. That may be the philosophy of insurance carriers but it has no application in court and no medical basis. The presence and extent of injuries are determined on the basis of evidence rather than extraneous theories (Duda v. Sekhon, 2015 BCSC 2393 (B.C. S.C.), at para. 62, citing Lubick v. Mei, 2008 BCSC 555 (B.C. S.C.), at para. 5, citing Gordon v. Palmer (1993), 78 B.C.L.R. (2d) 236 (B.C. S.C.)) [emphasis added].
While not stating the principle as definitively as the British Columbia courts, the Alberta courts have awarded damages for injuries sustained in low-impact collisions with minimal property damage based on the same reasoning. In Pfob v. Bakalik, 2003 ABQB 819, [2003] AJ No 1204, appeal dismissed 2004 ABCA 278, 354 AR 359, the plaintiff initially continued to work after the accident despite experiencing concussion-like symptoms, but several months later, he took ten month off work to heal, based on the advice of his doctors. The defendant argued that the damages claimed were out of proportion to the low impact of the collision and the plaintiff’s injuries could only have been explained by a pre-existing condition. Erb J found that medical evidence to the contrary was compelling:
[33] On causation, the Defendant argued that the damages claimed as a result of the impact for which it has accepted responsibility, are out of proportion to the low impact of the collision and must be explained by a pre-existing condition. This pre-existing condition as submitted by the defendant was a psycho-social disorder which has manifest itself in physical pain.
[34] It is not the amount of damage which is the determining factor in whether an individual is injured in a lower impact collision. Members of the medical profession, among others, have established that an injury can occur where the head and neck are rotated or extended at the moment of impact. The impact on an acceleration-deceleration movement becomes exaggerated and the injury is more severe than it would have been had the plaintiff sat upright with his head against his head rest anticipating the accident and therefore protecting himself against it. [emphasis added]
The reasoning in Pfob is the closest the Alberta courts have come to an explicit statement affirming the principle set out in the BC jurisprudence. However, the manner in which other decisions have applied the principles of causation appear to reflect similar considerations.
In Goertzen v. Sandstra, 2005 ABQB 623, [2005] AJ No 1134, the plaintiff was stopped at a red light when a vehicle that was hit by another vehicle ran into him in a chain reaction collision. It was estimated by an accident reconstructionist and biomechanist that the speed change sustained by the plaintiff’s vehicle was between 3.5 and 12 km/hr. Notwithstanding the minor impact, the plaintiff had not worked since the accident. According to the plaintiff, immediately after the accident he felt a shooting pain in his neck that extended through his shoulder and down to his arm. It was later determined that he had injured his C2 and C3 facet joints in the accident, and this eventually developed into chronic pain, depression, and generalized anxiety disorder. The plaintiff was involved in a second motor vehicle accident approximately two years later that was a more significant impact and exacerbated his injuries. Concerning the first accident, however, Hawco J found that the extent of the plaintiff’s injuries were believable, notwithstanding the low impact of the collision, and applied basic principles of causation:
[70] From early June 2003, Mr. Goertzen’s condition appeared to deteriorate significantly. His depression deepened, his anxiety increased, and his pain increased. By the time of the second accident, Ms. Kim MacIsaac had already determined that he was unemployable.
[71] The first accident would not, in the normal course of events, have done anything more than cause, at the most, a mild whiplash. According to Dr. Russell, that accident could not physically have caused Mr. Goertzen to suffer the injuries which presently plague him. Rather, what has caused Mr. Goertzen’s injuries is not the trauma which he suffered but his reaction to the initial trauma. […] A person such as Mr. Goertzen may have been suffering from [internal] stressors but was functioning and coping prior to the initial accident. Then an incident such as the initial accident occurs which can bring about certain symptoms which then serve to become an acceptable cause of a disability to a susceptible person. Dr. Russell believed that Mr. Goertzen was such a person. In his view, chronic pain reflects various forms of internal stressors. Some people focus on it and worry about it. They restrict their activities because of it. This leads to further symptoms and often to chronic pain.
[75] As earlier stated by Justice Major in Athey, it is not necessary that a plaintiff establish that the defendant’s negligence was the sole cause of the injury. All the plaintiff need do is establish that the defendant’s negligence caused or contributed to the injury. Even Dr. Russell concedes that the initial accident may have been the trigger which brought many internal stressors into play. I am satisfied that it was. The defendants are, therefore, liable to the plaintiff for his injuries, subject to the impact of the second accident and the plaintiff’s duty to mitigate [emphasis added].
In Meehan v. Holt, 2010 ABQB 287, (2010) 485 AR 1, the 42-year-old female plaintiff was a passenger in a vehicle being driven by her friend. The driver hit the brakes and the collision occurred in the middle of the intersection. The plaintiff remembers that her seatbelt locked, and her head went forward and then back. No part of
her body struck any part of the vehicle, and the cost estimate for repairs to the vehicle was under $1,500. Immediately after the accident, the plaintiff felt shock, headache, and neck pain. She felt flushed and hot, neck pain, shoulder pain, a severe headache, and sore jaw. Her mobility was greatly restricted, she had ringing in her ears, and a sharp pain in her mid-thoracic spine. Her back pain worsened over the next few days, and she had trouble sleeping. An expert for the defendant prepared a report that stated that the impact of the collision was minor, with an instantaneous forward speed loss of 4-7 km/hr while in contact with the other vehicle. The plaintiff argued that although the nature of her injuries seemed quite severe and unexpected given the minimal change in velocity identified in the expert report, she was not a crumbling skull plaintiff. The defendant conceded that the plaintiff had suffered injuries but argued that these had already resolved, and the ongoing injuries were not causally linked to the accident. Sullivan J observed that Athey makes it clear that if a defendant’s conduct is found to be a cause of the injury, the presence of other non-tortious contributing causes does not reduce the extent of the liability (at para 224). Applying the “but for” test, the plaintiff would not be suffering from her injuries but for the accident, as the forces involved in the collision either caused or materially contributed to her injuries:
[221] The parties agree that the test for causation in law has been set out by the Supreme Court of Canada in Athey v. Leonati, [1996] 3 S.C.R. 458 (S.C.C.) and Hanke v. Resurfice Corp., 2007 SCC 7, [2007] 1 S.C.R. 333 (S.C.C.). In Athey, the court reiterates that causation is established where the plaintiff proves to the civil standard on a balance of probabilities that the defendant caused or contributed to the injury. The court goes on to state that the general test for establishing causation is the “but for” test, which requires the plaintiff to show that her loss would not have occurred but for the defendant’s negligence. The court recognized that in certain circumstances the “but for” test may not be workable and that in such cases causation may be established where a defendant’s negligence “materially contributes” to the occurrence of the loss: Athey, paras. 13-15.
[222] In Resurface Corp., the court took the opportunity to clarify the test for causation, confirming that the basic test for determining causation remains the “but for” test, which recognizes that compensation for negligence should only be made “where a substantial connection between the injury and defendant’s conduct” is present. The court went on to state that in special circumstances, the “law has recognized exceptions to the basic ‘but for’ test, and applied a ‘material contribution’ test” [emphasis added].
By contrast, the decision in Pettipas v. Klingbeil, 2000 ABQB 378, 260 AR 1 illustrates circumstances where the court found that evidence of the reconstruction experts supported a finding that the plaintiffs’ injuries were not as severe as they claimed. The plaintiffs were a husband and wife who suffered injuries in a motor vehicle accident when they were hit from behind by the defendant. An accident reconstructionist estimated the impact velocity of the defendant’s vehicle was between 8-10 km/hr. The defendant driver was not injured in the accident. Hutchinson J found that the low impact of the collision and the medical evidence together cast doubt on extent of the plaintiffs’ injuries, which they claimed were ongoing seven years post-accident:
[55] A critical review of the totality of all of the claims of both Mr. and Mrs. Pettipas as disclosed in the amendments to their Statement of Claim which have been described above and which remained unaltered at the end of the trial compared to my finding of a comparatively low impact collision resulting from the motor vehicle accident and using the actual available medical evidence leads me to conclude that the
plaintiffs’ claims have been magnified out of all proportion to their actual damages. This includes the quantification of their non-pecuniary losses taking into consideration the extent of their physical and emotional injuries and the period of time over which they actually suffered. In the case of Mrs. Pettipas, I find that she should have recovered on her before the second anniversary date of the accident, that is, December 10th, 1994. [emphasis added].
The above decisions therefore confirm that there is no legal rule supporting a direct correlation between vehicle damage and the extent of a plaintiff’s injuries. In all cases, the basic rules of causation apply. Evidence that a collision was low impact or caused little vehicle damage, while not irrelevant, must be weighed against other available evidence, such as medical records, expert reports, and the plaintiff’s own testimony. Where the plaintiff can provide credible evidence showing that the defendant’s negligence is the cause of his/her injuries, the defendant is liable.
Linda Jensen, LL.B., B.C.L., LL.M.
PHONE: ( 403 )688-2119
linda@bottomlineresearch.ca
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Rules 1.2 (Purpose and Intention of These Rules), 5.2 (When Something is Relevant and Material), 5.6 (Form and Contents of Affidavit of Records), 5.17 (People Who May Be Questioned), 5.33 (Confidentiality and Use of Information) and 13.18 (Types of Affidavit)
The case involved a protracted legal dispute, spanning over a decade. The primary issue at hand was an Application before the Case Management Judge seeking judicial declarations and Orders to recognize certain documents as privileged. The documents in question were supporting documents related to traditional land use studies (“TLUS”) that the Applicant had conducted over the past twenty years. While the Applicant had not claimed privilege over the final reports of these studies, it asserted that the TLUS supporting documents were privileged.
The Respondents in this matter challenged the Applicant’s claim. They argued that the TLUS supporting documents were not privileged. Moreover, they contended that even if these documents were initially privileged, the Applicant had effectively waived such privilege by already disclosing some of these supporting documents to them. Despite their opposition to the privilege claim, the Respondents expressed a willingness to consider the imposition of a confidentiality and/or sealing Order to safeguard any sensitive information contained within the documents in question.
The Court began by emphasizing the overarching purpose and intention of the Rules, as set out in Rule 1.2. Further, the Court considered the specifics of Rule 5.2 regarding the relevance and materiality of evidence, and Rule 5.33 on the confidentiality and use of information, to evaluate the significance of the TLUS supporting documents to the case’s issues. The Court reviewed Rules 13.18, 5.17 and 5.6 to outline who could be questioned and the appropriate form and content of an Affidavit. The absence of a formal definition of “information” within the Rules prompted the Court to adopt a broad interpretation, recognizing information as encompassing knowledge or news, as per the Canadian Oxford Dictionary.
The Applicant argued that the consultations they engaged in were constitutionally mandated, concerning development on traditional territory. The Applicant did not assert class privilege over the documents but claimed a case-by-case privilege, citing the inclusion of highly sensitive personal information collected under confidentiality assurances. The Applicant further maintained that during the interviews for the TLUS, assurances were given to participants about the confidentiality of their information and identity, which, in their view, should be upheld.
The Court applied the Wigmore criteria to determine whether a case-by-case privilege existed concerning certain documents. Noting a prima facie presumption that the records were not privileged, the Court emphasized that the application of the Wigmore criteria is case-specific and requires a principled analysis rather than a formulaic one. Following its analysis, the Court concluded that the communications comprising the TLUS supporting documents originated in confidence, except for parts of the information incorporated into TLUS final reports explicitly recognized for Court use.
Turning to the issue of waiver, the Court found that the Applicant did not take reasonable steps to prevent the disclosure of the TLUS supporting documents. Acknowledging the disclosure was inadvertent, the Court held that it was also intentional. The Court found “the bell ha[d] been rung” on the TLUS supporting documents that were provided and it would be unfair and artificial to expect the defendants to “disabuse their minds” of the information.
In conclusion, the Court found that, upon a case-by-case analysis, the TLUS supporting documents were privileged, with the exception of information already incorporated into TLUS final reports. This excluded information comprising names of participants, names of special medicines, and the pinpoint locations for activities like hunting, fishing, berry picking, medicine harvesting, and identifying family and sacred places. However, TLUS supporting documents pertaining to members who will testify as witnesses were to be disclosed. Further, the Court found that the Applicant had relinquished privilege over TLUS supporting documents that had been previously shared with the Respondents. The Court indicated that the situation could be adequately safeguarded by implementing a confidentiality and/or sealing order.
3.12 (Application of Statement of Claim Rules to Originating Applications), 3.14 (Originating Application Evidence (Other than Judicial Review)) and 3.15 (Originating Application for Judicial Review)
This matter, commenced by an Originating Application (the “Application”), gave rise to an issue of whether this matter could be appropriately dealt with summarily. Marion J. commented that Rule 3.2(2)(a) provides that a Statement of Claim must be used to start an Action unless, among other things, there is no substantial factual dispute. Citing Royal & Sun Alliance Insurance Company of Canada v Co-Operators General Insurance Company, 2023 ABKB 426, Marion J. further commented that, even where there is not a substantial factual dispute, the Courts have significant discretion under Rules 1.4(1), 3.2(6), 3.12, and 3.14(1)(g) as to whether and how Originating Application proceedings proceed.
Marion J., citing Venini v Venini, 2023 ABKB 524, commented that Alberta Courts have confirmed that the test for whether a matter is appropriate for Summary Judgment do apply to Originating Applications, with some modifications.Marion J. reiterated the principles that applied to the situation in the matter at hand. Specifically, whether there was a substantial factual dispute, and the proper approach to summary dispositions set out by the Court of Appeal in Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49. Having found that there was no material factual dispute, that the Applicant’s requested relief was interim, and that no participant at the hearing objected to the Court making a Decision, Marion J. held that it was appropriate for the Court to consider the Application summarily.
BEHIELS V TIBU, 2024 ABKB 12 (LEMA J)
Rules 3.3 (Determining the Appropriate Judicial Centre) and 3.5 (Transfer of Action)
The Plaintiff in the crossclaim sought to transfer a long-running Action from Edmonton to Calgary, primarily based on her long-ago relocation from Camrose to Calgary, her health concerns, and the disproportionate share of witnesses based in and around Calgary.
The Court focused its analysis on the first branch of Rule 3.5, being whether it was unreasonable for the Action to be carried on in Edmonton. The Court then considered Rule 3.3 in the context of determining the issue of who bore the onus in a change-of-venue Application.
The Court noted that Rule 3.3 provides that the appropriate judicial centre is either: (a) the closest judicial centre, by road, to the Alberta residence or place of business of all the parties, or (b) if a single judicial centre cannot be determined, the closest judicial center to the party commencing the Action. Citing Odland v Odland, 2017 ABCA 397, the Court stated that if the Plaintiff’s selection of judicial centre is in compliance with Rule 3.3, then the onus of proving the Plaintiff’s choice was unreasonable is on the Defendant; however, if the Plaintiff’s selection does not comply with Rule 3.3, then the onus shifts to the Plaintiff. The Court determined that the onus was on the Applicant to prove that Edmonton was an unreasonable venue for the remainder of the Action, since the Applicant did not challenge the cross-Defendant’s selection of Edmonton in the first place and filed her crossclaim in Edmonton.
Next, the Court referred to leading authority which provided factors for gauging venue reasonableness, including: (a) the number of parties or witnesses in the current and proposed judicial centres; (b) the nature of the issues in the lawsuit; (c) the relationship between the parties in respect of the issues in the lawsuit; (d) the parties’ financial resources; (e) the stage of proceedings; (f) the convenience of location for pre-Trial motions; and (g) the location of relevant assets.The Court applied the factors to the facts and dismissed the Application, concluding that the balance of convenience favoured the Action continuing in Edmonton. The Court decided the Application based on the following factors: (a) central-events location closer to Edmonton than Calgary; (b) the Applicant had concurred with Edmonton as the place of Trial; (c) the Applicant’s move to Calgary was not a reason for a venue change on its own; (d) the location of witnesses; (e) the Applicant’s financial means and health considerations; (f) the location of counsel; (g) Trial-time availability; (g) remote-appearance aspect; and (h) the Applicant’s self-representing status.
This was an estate matter involving various Applications. One of the Applications was pursuant to section 10 of the Powers of Attorney Act, RSA 2000, c P-20 (the “PAA”), commenced by way of Originating Application, seeking that the Respondent be directed to pass accounts pursuant to the PAA.
In her written argument in response to the Applicant’s Originating Application, the Respondent raised the issue of limitations for the first time and contended that the relief sought by the Applicant was barred by the Limitations Act, RSA 2000, c L-12 (the “LA”). The Applicant argued that the Respondent cannot rely on the LA as a defence since she did not expressly plead it and only raised it in her written argument long after the parties had already spent two years litigating the issues.
The Court observed that according to section 3(1) of the LA, a party can only avail themselves of a limitations defence if they expressly plead the LA. The Court referred to the Rules, specifically Rule 13.6(3), which mandates that a party relying on a limitations defence must specifically plead it. The reason for this requirement, as stated in the Rule, is to prevent surprises. The Court stated that
pleading the LA is a requirement under both the LA and the Rules. Justice Reed further analyzed that since the Applicant initiated the Application through an Originating Application, the Respondent, in the absence of a consent Order or Court Order to the contrary, had no right under the Rules to file a response pleading. The Applicant relied on the decision of Master Hanebury in Geophysical Service Incorporated v Devon ARL Corporation, 2015 ABQB 137, which supports the argument that the statutory requirement also applies to Actions commenced by way of Originating Application.
Justice Reed’s analysis emphasized the importance of notifying the Applicant in writing if a limitations defence is to be relied upon when an Originating Application is the commencement document, and where the Respondent doesn’t necessarily have an opportunity to file a response Pleading, as they would if the Action had been started by Statement of Claim. Justice Reed noted that the Respondent must seek relief under Rule 3.12 to allow the filing of a defence to the Originating Application, at the very least. Failing to do so would undermine the purpose of that section of the LA and result in significant procedural unfairness towards the Applicant. The Court held that it was the Respondent’s responsibility to inform the Applicant of their intention to rely on a limitations defence under the LA. Additionally, the Respondent could have sought leave from the Court to treat the Originating Application as a Statement of Claim, but they neglected to do so. Justice Reed emphasized that pleading the LA when relying on it is crucial to prevent surprise and prejudice to the claiming party.
The Court dismissed the Respondent’s attempt to rely upon the LA, noting that the Respondent failed to comply with the Rules and with the LA
JL ENERGY TRANSPORTATION INC V ALLIANCE PIPELINE LIMITED PARTNERSHIP, 2024 ABKB 72 (HORNER J)
The Defendants applied to summarily dismiss, under Rule 7.3, portions of the Statement of Claim which were time-barred pursuant to the Limitations Act, RSA 2000, c L-12 (the “Limitations Act”). The Defendants also applied to strike, under Rule 3.68, portions of the Statement of Claim for lack of jurisdiction.
Horner J. commented that Hryniak v Mauldin, 2014 SCC 7 sets out the analytical framework for determining whether there is “no merit” or “no defence” to a claim pursuant to Rule 7.3. The Applicant for Summary Dismissal must show that there is no genuine issue requiring a Trial, such that the Court is able to reach a fair and just determination on the merits. This condition is satisfied where the process (1) allows the Judge to make the necessary findings of fact, (2) allows the Judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
Citing Weir-Jones Technical Services Incorporated v Purolator Courier Ltd, 2019 ABCA 49, Horner J. further commented that cases based on the expiration of the limitation period often satisfy the first two parts of the test. The third criterion acts as a final check to ensure that a Summary Judgment would not cause any procedural or substantive injustice to either party.
Having found that the quality of the evidence was such that it was fair to conclusively adjudicate this Action and that Summary Dismissal could fairly resolve the dispute, Horner J. held that the limitation issue could addressed summarily. Horner J. granted the Defendants’ Application for Summary Dismissal.
With respect to the Defendants’ Application to strike the claims to the extent that they included claims for infringement of patents which occurred in the US, and which were committed by companies registered in the US,
Horner J., citing TR Technologies Inc v Verizon Communications Inc, 2011 ABQB 390, commented that Alberta Courts do not have subject matter jurisdiction of US patent matters and held that if the Action had survived Summary Dismissal, the Plaintiff’s claims of patent infringement related to US patents should be struck under Rule 3.68(2)(a).
RK V GSG, 2024 ABKB 121 (MAH J)
Rules 3.68 (Court Options to Deal With Significant Deficiencies) and 7.3 (Summary Judgment)
Multiple parties brought Applications to strike Pleadings for deficiencies, pursuant to Rule 3.68. One such Pleading was a Statement of Claim, in which the Plaintiff failed to connect the facts pleaded with the causes of action alleged. While both were provided, the Plaintiff failed to explain how the facts supported each alleged cause of action.
Justice Mah provided an overview of the jurisprudence on striking a Pleading under Rule 3.68. Having regard to the case law, Mah J. concluded that if there are sufficient facts pleaded to support a cause of action, it should not be struck. Where some facts are missing, the Court could order particulars or amendments. Where there are no facts pled at all which support a legal element of a cause of action, it may be properly struck out.
The Defendant argued that the claim was also barred by operation of the Limitations Act, RSA 2000, c L-12. The Plaintiff argued that a limitations defence is properly the subject of an Application for Summary Dismissal, pursuant to Rule 7.3, rather than an Application to strike, pursuant to Rule 3.68. Justice Mah rejected that argument, stating that if there are no discoverability concerns on the facts pled, the expiry of the limitation period may be patent on the fact of the Pleadings and may be susceptible to an Application to strike. However, in this case, the allegations were not timebarred on their face, and therefore would be properly the subject of a Summary Dismissal Application.
The Plaintiff further argued that the Application to strike was barred because the Defendants had each filed a Statement of Defence. The Court rejected this argument, noting that each Defendant alleged in their Statement of Defence that the Statement of Claim disclosed no valid cause of action.
In reviewing the Statement of Claim, Justice Mah found that claims which had no basis in law could not be fixed through amendment and were therefore struck. Similarly, claims for which an element could not be proven through amendments to provide further detail were struck. Finally, for claims where an absolute defence existed, the claim was struck.
Rule 3.68 (Court Options to Deal with Significant Deficiencies)
The Appellant commenced a medical malpractice action against the Respondents for harm suffered following a medical procedure performed by the Respondent (the “2003 Action”). The 2003 Action was struck out. In May 2022, the Appellant sought to revisit the 2003 Action, first seeking permission to file a late Appeal. When that Application was denied, he commenced a new Action against the Respondents (the “2022 Action”). Counsel for the Respondents asked the Court of King’s
Bench to strike the Appellant’s 2022 Action through the process set out in Civil Practice Note 7, the “Vexatious Application/Proceeding Show Cause Procedure” (“CPN7”). They asked that CPN7 be used on the basis that the 2022 Action sought “to re-litigate a decided issue or issues, is a collateral attack, and/or is a duplicate proceeding”. It was determined that the 2022 Action was a suitable candidate for the CPN7 procedure. The Chambers Justice reviewed the purpose of the CPN7 procedure, noting that it is not for close calls; it is only for matters where the deficiencies in Pleadings are apparent on their face. The CPN7 process considers only “restricted forms of evidence”, including “documents and records that are evidence that the Apparently Vexatious Application or Proceeding is an attempt to litigate an issue that has already been decided”.
The Chambers Justice concluded that the Appellant’s 2022 Action appeared on its face to be a collateral attack on the decision to strike the 2003 Action. The Chambers Justice concluded that it was not appropriate to consider additional evidence, in part because Rule 3.68(3) prohibits evidence in relation to whether a filing “... discloses no reasonable claim or defence to a claim ...”. Thus, the Appellant appealed the striking of his Claim, and asked the Alberta Court of Appeal to consider new evidence.
The Court of Appeal went on to state that CPN7 does not change the substantive law established by Rule 3.68 and cases that applied the Rule. Rather, it changes the procedural entitlements of the party who’s claim is impugned. Ordinarily, a party seeking to strike a claim must file an Application and supporting Affidavit and serve it on the opposing party. The matter is usually decided following an oral hearing in civil Chambers, although the Court has the jurisdiction to resolve a matter in writing. Conversely, under CPN7, a party seeking to strike a claim may write to the Court asking that the CPN7 process be invoked. If the Court is satisfied that the matter is suitable for resolution through CPN7, it notifies the party with the impugned claim that the Court is considering making an Order staying or dismissing their claim. That party has 14 days to file a response, to which the party who requested the CPN7 may respond. The Court then makes its determination based on written materials. Under this process little or no evidence is provided, no oral hearing is conducted and importantly, the burden of proof shifts from the party seeking to strike the claim, to the party who’s claim is in jeopardy of being struck.
After reviewing the relevant jurisprudence on the matter, the Court agreed that CPN7 should only be used where the defect on the Pleading is evident on its face and there is a reason to prefer CPN7 to the ordinary Court procedure under Rule 3.68. That includes cases where a litigant is at risk of using other procedures to abuse the Court’s process, or where the party’s Pleading is so clearly hopeless that the ordinary procedures would be an utter waste of time, money and resources. Ultimately, a Judge must decide whether the circumstances justify placing the burden of proof on the party who’s pleading is impugned and denying that party an oral hearing.
When the Court applied this to the facts before them, the Court concluded that the Chambers Justice did not implement this approach and did not reflect on whether the CPN7 process was preferable to the ordinary process for considering an Application to strike.
That said, the Court was nonetheless satisfied that they could not intervene as the Appeal raised questions of mixed fact and law reviewed for palpable and overriding error, which is a very high standard. In so holding, however, the Court emphasized that CPN7 ought to be reserved for exceptional cases, particularly where the effect of the Decision is to terminate a party’s claim before the Court, and that CPN7 should not supplant the ordinary Rule 3.68 procedure.
LC V ALBERTA, 2024 ABKB 151 (GRAESSER J)
Rule 4.16 (Dispute Resolution Processes)
At a Case Management Conference, the Court asked the Plaintiffs in a long-running Class Action to explain their objections to going to a Judicial Dispute Resolution (“JDR”). The Plaintiffs provided an Affidavit stating, among other things, that they did not want to go to a JDR before getting proper disclosure as they believed the Defendant had something to hide.
The Court considered whether to direct the parties to participate in an alternate dispute resolution process (“ADR”) under Rule 4.16(4) and (5). The Court noted the benefits of ADR such as early settlement, and noted that there is no rule or best practice as to when is the best time for an ADR to occur. The Court also noted that the Rules emphasize party autonomy and party control over their litigation. As such, and given the Plaintiffs’ resistance to ADR, the Court declined to Order that a JDR take place.
The Appellants appealed an Applications Judge’s Decision to dismiss their Action for long delay pursuant to Rule 4.33.
Rule 4.33 requires the Court to dismiss an Action if three or more years have passed without a significant advance in the Action. The Court noted that a significant advance is one that moves the Action forward in a meaningful way and that whether a step significantly advances the Action is determined by a context-sensitive, substance-over-form approach.
The Court agreed with the Applications Judge that each step taken after some of the Defendants served their affidavit of Records did not constitute a significant advance in the Action. One of the steps that the Court considered was the filing of an Affidavit sworn by a non-party witness (the “Niehaus Affidavit”). However, the Court determined that the Niehaus Affidavit did not contain relevant and material information as contemplated by Rule 5.2.
The Appellants also argued that their efforts in a separate Originating Application seeking production of records (the “Records Application”) significantly advanced the Action. The Respondents argued that any records produced in the Records Application would be bound by the implied undertaking set out in Rule 5.33 not to use them for collateral purposes. However, the Court determined that, even if the Appellants could use those records, the Records Application was separate from the Action, was unknown the Respondents, and did not result in the disclosure of relevant and material information.
The Court dismissed the Appeal.
In this matter, the Court aimed to answer two questions: whether the joint filing of a request to schedule a Trial date could be considered a “significant advance” under Rule 4.33, and secondly, whether a Defendant’s unsuccessful efforts to rouse a dormant Plaintiff constituted as “participation” in “proceedings” such that the Defendant should be regarded as having waived the accumulated delay. Ultimately, the Court concluded the answer to each question was no, dismissing the Plaintiff’s Action under Rule 4.33(2).
In arriving at this conclusion, the Court undertook a comprehensive review of the legal principles discerned from previous decisions involving Rule 4.33. At the Application for dismissal, the Defendant who was seeking dismissal argued that the last significant advance was the joint filing of the request for Trial (“Form 37”) on October 28, 2019. Justice Lema concluded that merely filing Form 37 is not a significant advance, especially where the Form is submitted prematurely. In the present case, the Court rejected the Form 37 as a significant advance, noting the parties had not pursued Dispute Resolution or obtained a Dispensation Order (both aspects per Rule 8.4(3)(a)), and no Trial date was set.
In the alternative, the Plaintiff proposed that the “last significant advance” was the Defendant’s unsuccessful requests for Case Management and later a Case Conference (January 20 and February 3, 2022, respectively). Per the Plaintiff, these steps significantly advanced the Action in the sense that options for progress were explored and narrowed. However, the Court disagreed, stating that the rejection of the Defendant’s requests was no guarantee that requests by the Plaintiff would also be denied. The Plaintiff may have raised or emphasized different or additional factors or considerations or otherwise convinced the Court that Case Management or a Case Conference would or could be useful. Further, requests by the Plaintiff at a different time may have been treated differently.
The Court went on to emphasize that a significant advance pursuant to Rule 4.33 requires, at a minimum, an advance. The Court did not accept that a request, which was subsequently denied, represented any real advance, as the Action remained where it was before the requests, and did not move any closer to Trial. Though the Court did mention that Case Management Meetings and Case Conferences can represent or be the framework for significant advances, the requests for Case Management and a Case Conference in this case, being both unilateral (Defendant only) and, in any case, unsuccessful, did not represent significant (or any) advances.
The Court then turned its attention to the possible exception in Rule 4.33(2)(b), and whether there was sufficient participation by the Defendant to qualify as a waiver of the Defendant’s delay-associated rights. The exception in Rule 4.33(2)(b) operates “where Defendants have actively participated in an action to an extent and degree that could lead a Plaintiff to fairly assume that the Defendant has waived the delay.” In this case, no Application was filed at the material time of the litigation the Court was examining. Therefore, and on a threshold point, any “participation” by the Defendant in this Action had to fit within the verbiage of “a proceeding being taken” found in Rule 4.33(2)(b). Thus, the Court asked whether the Defendant’s exploratory steps towards a Judicial Dispute Resolution (“JDR”), Case Management, or a Case Conference, or any of them, amounted to “proceedings”.
The Court concluded that even using the broadest understanding of “proceedings”, the letters from the Defendant proposing a JDR were not “proceedings.” At most, they were preliminary steps towards a proceeding, which a JDR itself would represent. The same logic was applied to the Defendant’s letters to the Court requesting Case Management and, later, a Case Conference. Such letters were preliminary steps, which can themselves also be fairly characterized as “proceedings” since, like a JDR, they are also a component or element of an Action. However, both requests were denied, therefore no such “proceedings” were ever launched.
With none of the letters themselves amounting to “proceedings”, and with no JDR, Case Management or Case Conference actually occurring or even agreed to by the Plaintiff, there was no “participation” by the Defendant within the meaning of Rule 4.33(2)(b). Further, the Defendant’s “let’s get moving” activities not only did not get any results, they also could not be read as unequivocal signs of waiver of or acquiescence to the accumulated delay. As the Plaintiff did not respond to the JDR and as the Case Management and a Case Conference were refused, the Defendant did not have to elect between getting on board (or back onmboard) the Action train or stepping away. As the Court saw it, the Defendant was free to invoke its dismissal-for-delay rights without having signalled waiver or acquiescence to the Plaintiff, at least in any unequivocal sense.
Therefore, the Court ordered that with no significant advance in the Action, no waiver by the Defendant of the accumulated delay, and no other exception explaining or justifying the delay, the Plaintiff’s Action must be struck per Rule 4.33(2).
Rules 5.1 (Purpose of this Part - Disclosure of Information), 5.2 (When Something is Relevant and Material), 5.3 (Modification or Waiver of this Part), 5.5 (When Affidavit of Records must be Served), 5.6 (Form and Contents of Affidavit of Records), 5.11 (Order for Record to be Produced) and 5.12 (Penalty for not Serving Affidavit of Records)
The Plaintiff applied for an Order pursuant to Rule 5.11 compelling the Defendants’ full production of records within a specified period. The Plaintiff had previously been granted an Anton Pillar Order which included injunctive provisions in respect of one of the individual Defendants and which appointed in Independent Supervising Solicitor (“ISS”) to gather and prepare evidence which resulted in the corporate Defendant and an additional individual Defendant later being added as Defendants to the Action.
The Court noted that the parties had exchanged Affidavits of Records pursuant to Rules 5.5 and 5.6 and reviewed Rules 5.1 and 5.2. The Court noted that the records relevant and material to the allegations contained in the Statement of Claim must be identified as required under the Rules which would include records regarding communications with known Plaintiff customers, suppliers, and employees before and after the hiring of the individual Defendant. The Court held that this would also include the records relating to communications amongst and between the individual Defendants and the corporate Defendant prior to their departure from the Plaintiff. The Court ultimately determined that the Defendants did not adequately identify or disclose records that were in their control and which were relevant and material to the Action. The Court ordered that the Defendants’ complete Affidavit of Records be sworn and served within 120 days.
The Plaintiff also sought an injunction, relying on Rule 5.3, which would enable the ISS to oversee document production by the individual Defendants. The Court set out that ordering the ISS to take on a novel and continuing role was not warranted, noting that (1) it was not satisfied that requiring the ISS to undertake a new role would save costs, as the fundamental disagreement as to scope of documents that were producible had been resolved; (2) in the event the Defendants did not provide sufficient Affidavit in Records in compliance with its decision, the Plaintiff was permitted to apply for relief which would be a more economical method than inter-
posing the ISS into the process; and (3) utilizing the ISS as a mechanism for overseeing document production would contravene the fundamental principle, and that such Orders are to be granted sparingly and should be restricted in scope and duration.
The Court found that the Plaintiff was entitled to $1,500 in Costs from each of the Defendants, and that if they failed to provide sufficient Affidavits of Records, they should expect a much higher Costs Award as contemplated in Rule 5.12(1).
Rules 5.3 (Modification or Waiver of this Part) and 5.33 (Confidentiality and Use of Information)
The Defendant, Danica Prpick (“Ms. Prpick”), sent a letter to the RCMP titled “Organized Crime in Redcliff Alberta” that alleged that public officials and members of the media were involved in corruption and criminal conduct in the Town of Redcliff’s administration. Ms. Prpick also sent an email to a lending officer at the Bank of Montreal (“BMO”) alleging that one of the Plaintiffs, Shanon Simon, had engaged in unethical and illegal conduct that damaged Ms. Prpick (the “BMO Email”). The BMO Email came to light when it was produced in a separate Action, which was subsequently joined with the within Action for procedural purposes. The three Plaintiffs were all closely associated with Redcliff in both elected political and public service staff positions; they sued Ms. Prpick for defamation.
Ms. Prpick objected to the admission of the BMO Email into evidence on the basis that its use would breach the implied undertaking rule. The Plaintiffs argued that the implied undertaking rule is not absolute and that the Court may grant dispensation from it where appropriate. Justice Devlin noted that whether the BMO Emailed can properly be used as evidence begins with Rule 5.33, which codifies the common law implied undertaking rule. Further, Rule 5.33 places explicit statutory limits on the collateral use of otherwise private materials produced involuntarily through the civil discovery process. Justice Devlin held that the use of documents produced in one lawsuit to advance another is prima facie an infringement of Rule 5.33 and requires express permission of the Court. The party seeking to use the protected discovery documents bears a “heavy burden” of satisfying the Court that a collateral use should be allowed.
Justice Devlin noted that the factors that must be considered in determining whether to grant relief from an implied undertaking, which equally apply to an inquiry under Rule 5.33(1)(a), were summarized in Iozzo v Weir, 2004 ABQB 359 at para 9 [“Iozzo”]. Ultimately, the analysis turns on the balance between the mutual prejudices at stake and the impact on the administration of justice. The Court declined to follow the ruling in Ochitwa v Bombino, 1997 CanLII 14899 (AB LB) [“Ochitwa”], that “the public interest favours disclosure as the Defendants, if they have defamed the Plaintiff should not be permitted to hide their defamation behind the protection of the implied undertaking rule.” Justice Devlin held that the Ochitwa decision “erases the rule” and “[p]reventing otherwise useful but confidential information from being used or disseminated is the express purpose of r. 5.33.” The fact that this may forestall a party from pursuing an otherwise valid claim is a contemplated outcome of the Rule. Rather, the proper approach under Rule 5.33(1)(a) is to balance the interests that come into competition when an exemption from the Rule is sought. Ultimately, after considering the Iozzo factors, Devlin J. held that allowing an exception to Rule 5.33 would be contrary to the proper administration of justice and declined to admit the BMO Email
Rule 6.14 (Appeal from Applications Judge’s Judgment or Order)
This was an Appeal from an Applications Judge’s Order refusing to compel the disclosure of a settlement agreement as between two of the Respondents and non-party individuals. The Appellant alleged that the settlement agreement amounted to a fraudulent preference designed to defeat the Appellant’s claim for outstanding legal fees.
The Court began its analysis by setting out the standard of review applicable to an Appeal of this nature. Justice Labrenz referred to the following principles as arising from Rule 6.14 and the related case law: (a) an Appeal from an Applications Judge’s Judgment or Order is an Appeal on the record of proceedings before the Applications Judge, but may also be based on additional evidence that is relevant and material; (b) the standard of review on all issues is one of correctness; (c) although an Appeal on the record, the Appeal is viewed as being de novo due to the possible expansion of the factual records from what was before the Applications Judge; and (d) where the record has not been enhanced, it is not an error for the Court to summarily rely on or affirm the Applications Judge’s Decision if the Court views it as correct in fact and law.
Justice Labrez noted that the standard of review on the review of a Decision of an Applications Judge pursuant to Rule 6.14 is correctness. Justice Labrenz noted that the Appellants had put forward no new evidence on Appeal. In the result, Justice Lebrenz found no error in the Applications Judge’s Decision and therefore dismissed the Appeal. The Court granted leave to make submissions on costs should the Parties not be able to reach an agreement on their own.
Rules 6.14 (Appeal from Master’s Judgment or Order), 7.3 (Summary Judgment) and 9.15 (Setting Aside, Varying and Discharging Judgments and Orders)
This was an Appeal of two Orders of an Applications Judge.
The Defendants, a corporation and the individual owner (the “Owner”) (together, the “Defendants”), shared the same legal counsel, who requested the Plaintiff not to note the Defendants in Default without prior written notice. Despite this, the Owner was not included in the Statement of Defence filed by the corporation due to an apparent counsel error. Subsequently, the Defendants applied for Summary Dismissal pursuant to Rule 7.3.
Despite counsel’s request, the Plaintiff noted the Owner in Default without prior written notice. In response, the Owner filed an Application to set aside the Default (the “Setting Aside Application”).
Applications Judge Prowse issued two Orders: (1) Setting aside the Noting in Default against the Owner (the “Setting Aside Order”); (2) Granting Summary Dismissal of the Plaintiff’s claim against the Defendants (the “Summary Dismissal Order”). The Plaintiff appealed both Orders.
The Court noted that, pursuant to Rule 6.14, an Appeal of an Applications Judge’s Decision is de novo, and that the standard of review was correctness on all issues. The Court further noted that, under Rule 6.14(3), an Appeal from an Applications Judge’s Decision is an Appeal on the record of proceedings before the Applications Judge. However, new evidence may be admitted if the Judge hearing the Appeal considers it relevant and material.
In upholding the Setting Aside Order, the Court confirmed that when fairness requires it to be granted, Rule 9.15(3) gives the Court discretion to set aide a Default Judgment. The Court held that the Owner showed that she had an arguable defence because: (1) the failure to file a defence was a mistake on the part of her counsel; (2) her counsel’s correspondence and the Summary Dismissal Application clearly indicated her intention to defend; and (3) the Plaintiff unfairly attempted to take advantage of the mistake made by the Owner’s counsel, while the Owner promptly filed the Setting Aside Application.
With respect to the Summary Dismissal Order, the Court considered the test for Summary Judgment from Weir-Jones Technical Services Inc v Purolator Courier Ltd, 2019 ABCA 49, which requires that the Court be able to make the necessary findings of facts, apply the law to the facts, and be satisfied that Summary Judgment is a proportionate, more expeditious and less expensive means than a Trial to achieve a just result.
Furthermore, Rule 7.3(1)(b) allows a Defendant to apply for Summary Dismissal if “there is no merit to a claim or part of it.” The Court applied the principles from Hryniak v Mauldin, 2014 SCC 7, and held that it was not possible to fairly resolve this dispute on a summary basis, as the Defendants had not adduced sufficient evidence which, on the balance of probabilities, established there was no merit to all of the Plaintiff’s claims.
As a result, the Court dismissed the Appeal against the Setting Aside Order and allowed the Appeal of the Summary Dismissal Order.
The Appellant sold a car to the Respondent “as is.” Minutes later, the engine of the car exploded. The buyer won damages at Trial, and the seller appealed, alleging factual errors. The Appellant sought to admit fresh evidence on Appeal pursuant to Rule 6.14.
The Appellant argued that the Court should take a “hybrid approach,” combining an Appeal on the record with a partial de novo hearing based on the fresh evidence. Justice Devlin considered the test for fresh evidence on Appeal. He stated there is no such thing as a hybrid Appeal. Either the Appeal is heard on the record or it is heard de novo. Further, the Appellant failed to meet the criteria for fresh evidence, as the evidence he sought to enter was in the Appellant’s possession before the initial Trial, lacked credibility, and was not available for cross-examination.
Justice Devlin ultimately dismissed the entire Appeal, finding that no palpable and overriding error was shown and the arguable error would not have led to a different result. Pursuant to Rule 14.75, Devlin J. dismissed the Appeal.
Rules 7.2 (Application for Judgment) and 7.3 (Summary Judgment)
The Respondent applied to determine the validity of an immediate Enduring Power of Attorney and Personal Directive. The Applicants sought Summary Judgment to dismiss that Application. Marjory Godsman completed an Enduring Power of Attorney and Personal Directive in 2020, naming the Respondent as her Attorney and Agent. She also completed a second set of the same documents in 2021, naming the Applicants as joint Attorneys and Agents. The Respondent argued that Ms. Godsman lacked capacity to execute the documents in 2021.
The Court considered Rules 7.2 and 7.3 and the relevant case law on the topic of Summary Judgment. In particular, Justice Hartigan considered the proper approach to Summary Dispositions, including that it must be fair to resolve the dispute on the available record, and there must be no genuine issue requiring Trial. Justice Hartigan found that the evidentiary record available was substantial, including Affidavits and filed cross-examination transcripts The Respondent suggested that the evidence of one affiant was subject to issues of credibility that required viva voce evidence, to allow the Court to more effectively assess its veracity. The Court held that this was not a compelling argument, as conflicting Affidavit evidence does not preclude a Summary Decision. Further, the particular evidence at issue was not necessary to determine the ultimate issue.
The Court similarly rejected an argument that new witnesses could be tendered at an oral hearing if allowed, which could provide further evidence. Justice Hartigan found that the record before the Court was sufficient to determine the issues and additional witnesses were not required.Ultimately, Hartigan J. found that the 2021 documents were valid, and summarily dismissed the validity Application.
Rules 7.3 (Summary Judgment), 7.5 (Application for Judgment by Way of Summary Trial), 7.6 (Response to Application), 7.7 Application of Other Rules), 7.8 (Objection to Application for Judgment by Way of Summary Trial), 7.9 (Decision after Summary Trial), 7.10 (Judge Remains Seized of Action), 7.11 (Order for Trial) and 13.18 (Types of Affidavit)
The Plaintiffs, a condo corporation and its owners, applied to proceed by way of Summary Trial against the Defendant condo corporations.
The Defendants objected on proceeding via Summary Trial and sought to have the Plaintiffs’ Affidavit struck for failing to comply with Rule 13.18(3) (which requires an Affidavit in a Summary Trial be sworn on the basis of personal knowledge).
The Court noted that if an Affidavit is sworn on information and belief, the source of the information must be disclosed. While business records may be an exception to the hearsay rule, authentication is usually required. The Defendants also challenged certain paragraphs of the Affidavit, arguing that they provided legal opinion and argument based on the Affiant’s interpretation of certain bylaws. The Court agreed that this type of evidence is generally considered improper, as Deponents should only provide evidence based on personal knowledge of the facts in issue. Consequently, the Court decided to strike some paragraphs of the Affidavit.
Further, the Court assessed whether the case was suitable for Summary Trial under Rules 7.5 to 7.11. The Plaintiffs argued that the case involved a straightforward contractual interpretation, with no credibility issues, and that a full Trial would result in significant Costs for the parties involved, as well as prejudice certain Plaintiffs.
The Defendants disagreed, asserting that the issues were complex and could not be resolved solely through affidavit evidence. They, specifically, argued that the Court needed to hear testimony from key witnesses regarding the enforceability of an agreement. Additionally, the Defendants claimed that the resolution of this matter hinged on the credibility of several witnesses, and that the Court lacked crucial evidence.
Justice Johnston sided with the Plaintiffs, concurring that this case was appropriate for Summary Trial due to its lack of complexity. Justice Johnston referenced the Court of Appeal’s decision in Dunn v Condominium Corporation No 042 0105, 2024 ABCA 38 at paragraph 17, which stated, “Condominium bylaws are more akin to laws and regulations passed by a legislative body than contractual provisions, and courts have interpreted them accordingly,” noting that such cases are particularly well-suited for summary adjudication. The Court emphasized that both parties were expected to present their strongest arguments during Summary Trial Applications, and there was no justification for the Defendants’ failure to submit additional evidence, especially considering their examination of multiple parties during Questioning and their ability to examine more if necessary. Subsequently, the Court evaluated the merits of the case and ultimately granted Judgment in favor of the Plaintiffs.
REININK V ALBERTA (LABOUR RELATIONS BOARD), 2024 ABCA 63 (ANTONIO JA)
Rules 9.4 (Signing Judgments and Orders), 14.8 (Filing a Notice of Appeal) and 14.37 (Single Appeal Judges)
The Applicant in this matter sought extension of time for her Appeal a Decision of the Alberta Court of Queen’s Bench (as it then was).
The Applicant failed to file her Notice of Appeal within the time-period provided by Rule 14.8. She, therefore, asked the Appellate Court to exercise its discretion pursuant to Rule 14.37(2)(c) to extend this timeframe. The Court referenced Cairns v Cairns (1931), 26 Alta LR 69, to outline the factors for such discretion, emphasizing the necessity for the Applicant to demonstrate a reasonably arguable Appeal, a criterion the Court found unmet due to the Applicant’s attempt to re-litigate previously settled matters.
The Court invoked Rule 9.4(2)(c) and prepared the resulting Order.
Rule 9.13 (Re-Opening
The Parties appealed from a Judgment arising from a family dispute. The Trial Judge had issued a written Decision and three follow-up Endorsements.
The Wife in her Cross-Appeal argued that the Trial Judge was inconsistent in his treatment of post-Trial submissions under Rule 9.13. Specifically, the Wife argued that the Trial Judge accepted certain post-Trial submissions from the Husband on one issue, but rejected her post-Trial submission in which she argued the Judge made a palpable and overriding error by not taking Judicial Notice of certain tax liabilities.
Rule 9.13 gives the Court discretion to vary a Judgment before it is entered or, if the Court is satisfied there is good reason to do so, it may hear more evidence in order to modify the Judgment or its reasons for it.
The Court held that the Trial Judge could not be faulted for refusing to take Judicial Notice of the tax liability. Ultimately, it was the responsibility of the Wife to ensure that the record before the Trial Judge adequately addressed the issue.
In turning its attention to Rule 9.13, the Court noted that the Rule must be “used sparingly.” It cautioned litigants that Rule 9.13 is not intended to be used a vehicle to “shore up evidential gaps” nor is it a “new occasion for the losing party to advance new argument which he or she simply did not think of before.” Further, the Court warned that Trial Judges who invite further submissions under Rule 9.13 and then issue subsequent Endorsements “may introduce questions around what properly forms part of the evidentiary record” and thus “open themselves up to criticism as to the proper use of post-trial submissions.
TING V TING, 2024 ABKB 25 (HARRIS J)
Rule 9.14 (Further or Other Order After Judgment or Order Entered)
The Court previously granted a mobility Order allowing a mother to relocate a child to South Carolina (the “Mobility Order”). The parties appeared before the Court to clarify the terms of the Mobility Order and submitted questions about its interpretation.
The Court noted that, once an Order is entered or is otherwise perfected, the Court is generally functus and may not set aside or alter the Order. In other words, the Court has no jurisdiction to revise that Order even if there is a change in circumstances. However, Rule 9.14 provides an exception that allows the Court to make a further or other Order to give effect to the original Order.
As a result, the Court answered each of the questions the parties raised about the terms of the Mobility Order and directed the parties to prepare an Order reflecting those answers.
Rules 9.15 (Setting Aside, Varying and Discharge Judgments and Orders), 9.16 (By Whom Applications are to be Decided) and 10.37 (Appointment for Assessment)
The Applicants brought an Application set aside an ex parte freezing Order (the “Order”) issued by Romaine J. The Order restrained the Defendants from dealing with any of their exigible property and required third party institutions to disclose financial records.
Justice Little noted that while the Applicant’s counsel did not specifically refer to Rule 9.15 or 9.16 in the Application, Rule 9.15(2) requires such an Application to be brought within 20 days of the Order being served or coming to the attention of the Defendants. Counsel agreed that this requirement was waived. Further, under Rule 9.16, an Application brought pursuant to Rule 9.15 to set aside is to be brought before the Judge who granted the Order unless the Court orders otherwise, which was also set out in Romain J.’s Order. However, exceptions can be made when a Judge is not available or when, for example, “it was issued some time ago in morning chambers and the issuing judge would not likely be in a better position than any other judge to re-think the matter.” In this case, counsel agreed that Romaine J. consented to the Application being heard by another
Judge since she was starting a long Trial. Further, two other Justices had heard Applications to vary the Order by permitting funds to be released for living expenses.
The Court ultimately granted the Application to set aside the Order. Counsel for the Applicants sought full indemnity Costs to be assessed pursuant to Rule 10.37. Justice Romaine held that if Counsel were unable to agree on Costs, whether full indemnity or otherwise, they were to provide written submissions on Costs not exceeding five pages.
Rule 9.15 (Setting Aside, Varying and Discharging Judgments and Orders)
The individual Defendant applied under Rule 9.15(1) to set aside a Summary Judgment awarded against him personally and against the corporate Defendant. He claimed that he did not appear in Court on the required day due to two interfering events or circumstances: (1) he was in a remote part of Africa with limited technology resources and unable to attend; and (2) the Court granted a procedural Order on August 9, 2023 setting the matter for hearing on September 6, 2023 based on a misapprehension that the individual Defendant had consented to the September 6, 2023 hearing date.
The Court noted that Rule 9.15(1) permits the Court to revoke a Judgment or Order made following a Trial or hearing at which an affected person did not appear because of accident, mistake, or insufficient notice. Citing Hammond v Hammond, 2019 ABQB 522, the Court also noted that the purpose of the Rule is to remediate the injustice caused to a non-attending party where that party would have attended but for some “interfering” event or circumstance.The Court held that the individual Defendant’s situation did not fall into these categories. This was not a case where any sort of “accident” was alleged that prevented the individual Defendant from attending Court. Nor was it a question of “insufficient notice” since the individual Defendant admitted to having more than two months of advance notice and had been communicating regularly with counsel for the other side regarding the Application during those two months. In addition, not physically being available was not a mistake.,
The Court then addressed the individual Defendant’s alleged interfering circumstances. The Court noted that being unavailable for the Court date on which the other side insists on proceeding behooves the unavailable party to do something, which the individual Defendant failed to do during an entire month before the hearing date. In addition, even if the procedural Order was made under a misapprehension induced by Plaintiff’s counsel, which the Court denied, such misapprehension was not an “interfering event” in that it did not prevent the individual Defendant from attending Court through counsel or remotely.
As a result, the Defendants’ Application to set aside the Summary Judgment Order was dismissed.
2024
Rules 10.2 (Payment for Lawyer’s Services and Contents of Lawyer’s Account), 10.31 (Court-Ordered Costs Award), 10.33 (Court Consideration in Making Costs Award) and 10.39 (Reference to Court)
This Decision dealt with the Costs to be awarded to the successful Defendants following the Trial of a lengthy, high-value Action. The Defendants sought 50% of their actual legal fees and 100% of their recoverable disbursements (amounting to approximately $6 million) or in the alternative, Costs based on Column 5 of Schedule C with a multiplier and 100% of their recoverable disbursements (amounting to approximately $4.5 million). The Plaintiff argued that Costs should be based on Column 5 of Schedule C, but with the application of a smaller multiplier, and the Plaintiff also argued for reductions to the Defendants’ claimed disbursements (amounting to approximately $1.7 million).
The Court begin its analysis by discussing the general principles applicable to Costs Awards: first, that the successful party is ordinarily entitled to Costs; second, that Costs Awards are discretionary, but must be guided by the factors set out under Rule 10.33; and third, that the Court may employ a variety of tools or approaches in determining how to arrive at an Award of reasonable and proper Costs as guided by Rule 10.31. The Court also considered the general rule that Costs awarded on a party-and-party basis should typically provide partial indemnification of approximately 40–50% of the successful Party’s actual fees incurred, but that these fees must be evaluated for reasonableness as guided by Rule 10.2.
The Court considered the parties’ positions as to each of the relevant matters under Rule 10.33 and found both mitigating and aggravating factors. Justice Neufeld held that, in the circumstances, where sophisticated and well-funded litigants are involved in high-stakes litigation, an Award based on a percentage indemnity would be more appropriate than the application of Schedule C, which was not designed with complex commercial litigation in mind.
In the result, the Court directed the parties to an Assessment Hearing before a Review Officer for a determination of the reasonableness of the fees and disbursements incurred by the Defendants. The Review Officer was directed to award Costs on a 45% indemnity basis, in light of the mixed results of the analysis under Rule 10.33. The Court excluded an assessment of the claimed Expert Witness fees from the Review Officer’s purview, and instead ordered some deductions based on the argumentative stance taken by one of the Defendants’ Expert Witnesses. Justice Neufeld also denied the recovery of fees related to certain Interim Applications where the Defendants were not successful, or which were resolved on a without Costs basis. Justice Neufeld noted that a further reference could be brought before the Court under Rule 10.39, if necessary to the Review Officer
BOELMAN V BOELMAN, 2024 ABKB 30 (LEONARD J)
Rules 10.29 (General Rule for Payment of Litigation Costs), 10.31 (Court-Ordered Costs Award) and 10.33 (Court Considerations in Making Costs Award)
This is an Application for Costs by the Plaintiff in a family matter. Citing Shaw v Shaw, 2014 ABQB 165 and Cador v Chichak, 1998 ABQB 881, Leonard J. commented that Costs in family law matters normally follow the same principles applicable to other litigation.
Leonard J. further commented that Rule 10.29 confirms the general rule that a successful party is entitled to Costs against the unsuccessful party, subject to the Court’s general discretion. Leonard J. further noted that, pur-
suant to Lameman v Alberta, 2011 ABQB 532, a Trial Judge’s discretion must be exercised judicially and in accordance with established principles.
Leonard J. cited McAllister v Calgary (City of), 2021 ABCA 25 for the Costs assessment framework, and commented that the starting point in making a Costs Award is to look at the factors outlined in Rules 10.33(1) and 10.33(2). After the factors under Rule 10.33 are considered, the Court is directed to Rule 10.31, which provides options for making Costs Awards. A successful party is entitled either to reasonable and proper Costs, as set out in Rule 10.31(1)(a), or to any other amount the Court considers appropriate in the circumstances, as set out in Rule 10.31(1)(b).
Leonard J. considered the applicable factors under Rules 10.33(1) and 10.33(2). Specifically, the Plaintiff’s substantial success, the complexity of the claim, the importance of the issues, the apportionment of liability, the conduct of the parties, as well as the Plaintiff’s misconduct.
When considering the amount of Costs that should be paid by the Defendant to the Plaintiff under Rule 10.31, Leonard J. commented that it is important that the Costs awarded be balanced; while the Costs Award must reflect the factors set out in Rules 10.33(1) and 10.33(2), it must also not overly penalize the Defendant. To strike an appropriate balance, Leonard J. awarded Costs against the Defendant under Schedule C, Column 3
SERINUS ENERGY PLC V SYSGEN SOLUTIONS GROUP LTD, 2024 ABKB 123 (MARION J)
Rules 10.29 (General Rule for Payment of Litigation Costs), 10.31 (Court-Ordered Costs Award) and 10.33 (Court Considerations in Making Costs Award)
This Application concerned the allocation of Costs following a case with mixed outcomes, specifically in Serinus Energy PLC v SysGen Solutions Group Ltd, 2023 ABKB 625. The Court faced the task of determining appropriate Costs in a context where both parties experienced partial victories. Serinus Energy PLC (“Serinus”) received a net judgment accounting for both the Statement of Claim and the Counterclaim, notwithstanding that the legal expenses incurred by both parties substantially surpassed the financial awards granted.
In its deliberation, the Court invoked Rules 10.29(1), 10.31, and 10.33, highlighting the Court’s extensive discretion in awarding Costs. The Court noted that its discretion aims to ensure an equitable balance between the litigation’s outcomes and the financial burdens shouldered by the parties. Furthermore, drawing upon the precedent set by McAllister v Calgary (City), 2021 ABCA 25, the Court underscored its authority to depart from the “reasonable and proper costs” framework, enabling it to order either reduced or enhanced Costs as it sees fit. The Court underscored the potential inadequacy of applying Schedule C for Costs in a straightforward manner, pointing out that such an application might not achieve reasonable partial indemnification for either party or mirror an amount that the losing party could reasonably be expected to pay, thereby necessitating substantial adjustments to Schedule C.
In evaluating the Costs implications stemming from the mixed successes in both the Statement of Claim and the Counterclaim, the Court also investigated whether either party had attained substantial success during the proceedings. Recognizing the diverse approaches in existing jurisprudence, the Court embarked on a detailed analysis guided by the provisions of Rule 10.33.
After examining the relevant factors, including the success achieved by each party in their respec-
tive claims and the overall divided success across the Action, the Court arrived at its conclusion. It was held that Costs should be awarded to each party for their independent claim, with these amounts subject to mutual offset.
Rules 10.29 (General Rule for Payment of Litigation Costs), 10.31 (Court-Ordered Costs Award) and 10.33 (Court Considerations in Making Costs Award)
This was a Costs Decision addressing whether parties to an agreement can claim contract-based double solicitor-client Costs against each other related to the implementation of the agreement and, if not, whether some other Costs Award was warranted.
The parties separated in February 2021 and entered into a Divorce & Property Contract (the ”Agreement”) in February 2023. The Agreement dealt with, among other things, the sharing of the husband’s employment pension (the “Plan”). The parties each executed a T2220E form for the Plan transfer, which was rejected by the employer’s insurance company plan administrator (the “Administrator”). Subsequently, the parties completed a T2151 form as advised by the Administrator, but this form was also rejected due to missing information. Despite the parties’ attempts to provide the correct information to the Administrator, they received a Plan value with an incorrect accrual end date.
The wife filed an Application seeking various Orders related to the Plan transfer and double Costs on a solicitor-client basis based on a clause in the Agreement, which provided that if one party breached the contract and enforcement was needed by the other party, the breaching party must cover all associated enforcement costs on a double solicitor-client basis (the “Costs Provision”). In contrast, the husband sought $20,000 for his time spent on the matter.
The Court first addressed whether the wife could claim double solicitor-client Costs against the husband. Considering the principles of contractual interpretation, the Court interpreted the Agreement and determined that the purpose of the Costs Provision was to encourage efficient and cooperative implementation of the Agreement.The Court found that the wife’s Application did not engage the “enforcement” of clauses of the Agreement and denied her claim for double solicitor-client Costs. Additionally, the Court expressed doubt about the enforceability of the Costs Provision but did not make any findings on this issue.
After denying the husband’s claim of $20,000 in compensation because he failed to provide evidence to justify his position, the Court then determined the appropriate Costs Award regarding the wife’s Application.
The Court considered the general Costs principles under Rules 10.29, 10.31, and 10.33 and held that neither party should be entitled to Costs because: (1) the wife did not obtain the relief she sought; (2) much of the Court intervention was required because of the Administrator’s uncooperative approach to this matter; (3) much of the Costs associated with the Plan transfer could have been avoided had the wife brought her Application immediately upon learning that the Administrator would not cooperate regarding the Plan transfer, rather than engaging in protracted and unproductive communications with the husband; (4) the husband, being a self-represented litigant, was not entitled to any solicitor-client Costs except in appropriate circumstances, which the Court found
did not exist in this case.
Therefore, both parties were ordered to bear their own Costs.
Rule 10.31 (Court-Ordered Costs Award) and 10.33(Court Considerations in making Costs Award)
The Applicant and Respondent were parties to a formal property and separation agreement (the “Agreement”) and each alleged breaches of the Agreement via Applications which were heard during a Special Chambers Application (the “Special Application”). Following the outcome of the Special Application, the Applicant sought Costs and interest, with Costs to be assessed on a solicitor and client basis under a provision of the Agreement which provided for such indemnity. The Respondent resisted the Application on the basis the Applicant was not entirely successful in her Application and breached a mediation requirement in the Agreement (the “Mediation Requirement”). The Court found that the Applicant was substantially successful in the Special Application but did breach the Mediation Requirement.
Among other things, the Court noted that: (1) a successful party to an Application, a proceeding, or an Action was entitled to a Costs Award against the unsuccessful party, subject to a variety of considerations including the Court’s general discretion under Rule 10.31, but that entitlement may not always obtain; (2) a party need not be successful on each argument or claim to relief to qualify for this Costs entitlement; (3) where success is mixed to the extent that it cannot be said that one party was substantially successful, no order should be made as to costs and the parties will bear their own Costs, but where success is divided on multiple issues, an apportionment of Costs may be appropriate with reference to Rule 10.31(3)(c); (4) the exercise of discretion must be case-specific taking into account not only the degree of success by each party but also such factors as the conduct of the parties, the necessary length of the trial and the nature and significance of the evidence presented; (5) the Court will ordinarily hold the parties to the their bargain to pay Costs on a solicitor and client basis, but the Court has discretion to refuse to enforce that bargain based on litigation conduct, proportionality of the expense related to the amounts in issue, degree of success achieved, harshness, and other factors; and (6) Rule 10.33(2) permits the Court to consider a variety of factors including inefficient conduct of litigation, refusals to admit matters that ought to have been admitted, and misconduct of litigation.
The Court determined that the Applicant was entitled to recover Costs notwithstanding her breach of the Mediation Requirement because the Respondent’s positions in the litigation were so unreasonable and contrary to the foundational principles in Part 1 of the Rules that it would be unjust and inappropriate to deprive the Applicant of Costs or absolve the Respondent from liability to pay Costs, or exercise its discretion to deprive the Applicant of her entitlement to receive them on a solicitor and client basis. More specifically, the Applicant’s conduct in the circumstances did not disentitle her to Costs and the Respondent’s litigation conduct was to be discouraged and deterred. The Court acknowledged that breaching the Mediation Requirement was an error in judgment but that it did not give rise to or excuse the unreasonable positions the Respondent had taken in the litigation.
The Court found that although taking positions without merit is not usually sufficient to justify an award of solicitor and client Costs, the appropriate question in the circumstances was, whether the Court should exercise its discretion relieve the Respondent of his bargain to pay them. The Court
determined that the Respondent did not present a meritorious defence to paying spousal support and had made bare allegations of dishonesty, fabrication of evidence and abuse of process against the Applicant, all of which were unfounded.
Rules 10.32 (Costs in a Class Proceeding) and 10.33 (Court Consideration in Making Costs Award)
The Court had previously denied the Plaintiff’s request to be granted public interest standing and granted the Defendant’s application to strike the Action. This Decision dealt with the Costs arising from those proceedings.
Justin Martin observed that, at common law, there were previously four factors that the Court would consider when deciding whether to depart from the ordinary rule that a successful party is entitled to Costs in the context of public interest litigation. These four factors were later codified under Rule 10.32: (1) the public interest; (2) whether the Action involved a novel point of law; (3) whether the proceeding or Action was a test case; and (4) considerations related to access to justice.
In addition to these factors, Justice Martin noted that Rule 10.33 provides a list of factors that the Court may consider in making a Costs Award and further factors to consider in deciding whether to deny or vary an amount of Costs. Justice Martin held that the two sets of factors (under Rules 10.32 and 10.33) may both be considered in accordance with their relevance to the matter at hand—they are not mutually exclusive.Here, the Court found that, while the Plaintiff lacked public interest standing, its Action did bring substantial attention to the underlying issues related to the plight of unhoused Edmontonians and unhoused persons throughout Canada. The Court found that the Action did not raise a novel point of law, but that it was a form of test case related to the legality of the Defendant’s policy on dismantling encampments. With respect to access to justice, the Court recognized the difficulties unhoused persons face in bringing litigation forward and the importance of public interest litigation in addressing that difficulty.
In light of those factors, the Court awarded the Defendant $11,500 in Costs, which amounted to approximately half of the amount sought.
Digital Commerce Bank (“DCB”) sought Costs following an Application by Plastk Financial & Rewards Inc. (“Plastk”) to confirm and expand interim Injunctions was dismissed. DCB’s position was that as the successful party, it was contractually entitled to full indemnity Costs in the amount of $256,602.08 but would accept $125,000, representing partial indemnity.
Justice Little agreed that DCB was wholly successful, but disagreed that DCB was entitled to full or partial indemnity Costs. Justice Little held that while the primary contract entitled DCB to Costs of enforcement for breaches of the contract, he was not prepared to decide that any breach was entirely one-sided.
Justice Little then considered whether Costs pursuant to McAllister v Calgary (City), 2021 ABCA 25 (“McAllister”) were appropriate, holding that: “… my read of McAllister is that the quantum of costs it sanctions are more appropriate in sit uations that involve ‘prosecuting a claim from Statement of Claim
to judgment in a protracted piece of litigation involving arguably novel liability’ (para 3).”
The Court found that McAllister Costs were not appropriate because the case was not yet in the “substantive phase” as it involved multiple interlocutory applications to date.
Justice Little then considered the factors in Rule 10.33, holding that most of the factors “are applicable to completed actions” and that “[f]ew of those factors play into this interlocutory application which was but one in a series of related interlocutory applications.” The Court ultimately granted DCB $25,000 in Costs, plus reasonable disbursements, recognizing that the Application was more than a routine Chambers Application, that DCB was required to expend considerable legal resources, and that Schedule C Costs would be inadequate.
Rules 10.52 (Declaration of Civil Contempt) and 14.48 (Stay Pending Appeal)
The Applicant sought a Stay, pursuant to Rule 14.48, of Dunlop J.’s Order that the Applicant physically attend before him on February 29 to show cause why additional sanctions should not be imposed for failing to comply with the terms of a previous Order. Justice Watson began by noting that “… an application for a stay - or in effect an injunction in relation to something - are subject to the same test which is in the nature of an equitable remedy being granted by a court”, citing the threepart test for a Stay from RJR-MacDonald Inc. v Canada (Attorney General), [1994] 1 SCR 311.
The Respondent argued that the lack of the Applicant’s “clean hands” was a barrier to the Application. Justice Watson agreed that the clean hands doctrine falls within the general boundaries of the types of policies that are applied to equitable remedies. However, the doctrine was that not applicable to the specific issue of the Application, being whether the Applicant had to attend in person as ordered by Dunlop J.
Justice Watson found there was an “arguable question” on whether there was a serious issue to be tried, that being whether it was necessary to impose a personal attendance requirement on the Applicant. As to whether the irreparable harm branch of the test was met, Watson J.A. rejected the Applicant’s Affidavit evidence that she was so destitute that she could not travel back to Canada from Thailand. Further, the Court noted, citing Rule 10.52, that the “purpose of civil contempt is to act in a regulatory manner and in a coercive manner to ensure compliance with the orders that are made by the court.” Justice Watson commented that “[c]ivil contempt is used with caution in the sense that it is mainly to make sure that orders of the court are complied with.” As such, “it is difficult for me to see irreparable harm in her favour.”
On a balance of convenience, Justice Watson was not satisfied that the Court of Appeal should interfere with Dunlop J.’s Order, noting that that it was an Order that Dunlop J. could have changed on his own and that the involvement of the Court of Appeal of Alberta in any phase of a process decision, “especially on a small point mentioned here”, would be damaging to the operation of the Alberta Court of King’s Bench as it would be harmful to its ability to make authoritative Orders. In the result, the Application for a Stay was denied.
ZVP (RE), 2024 ABKB 150 (MALIK
Rule 11.29 (Dispensing with Service)
The Applicants applied to adopt a child. The Application included the biological mother’s consent and an Affidavit of Reference, but it did not include the biological father’s consent. The biological father had also not been personally served with Notice of the hearing as contemplated by section 64(1)(g) of the Child, Youth and Family Enhancement Act, RSA 2000 c C-12 (the “Act”). In the biological mother’s Affidavit, she deposed that she had only met the child’s biological father several times, that she did not know the biological father’s last name, that she was sexually assaulted by the biological father the last time she saw him, and that she would not feel safe to contact the biological father and advise him of the child.
Justice Malik held that Notice of a Court Application is a fundamental civil right and should only be deviated from in exceptional circumstances. However, while the Act requires that the biological father be personally served, section 64(8) of the Act, which addresses alternative means of service, does not preclude the application of Rule 11.29 in exceptional circumstances. Justice Malik held that if the biological mother swore and filed a further Affidavit that satisfied the Rule 11.29 requirements, he would be prepared to issue an Order dispensing with service to allow the adoption process to move forward.
Rules 14.1 (Definitions) and 14.57 (Adding, Removing or Substituting Parties to an Appeal)
ITP SA (“ITP”) applied to be named or added as a Respondent on an Appeal by the Plaintiff CNOOC Petroleum (“CNOOC”) regarding disputed privilege claims advanced by CNOOC over certain records. During a prior application, one of the Defendants contested some of CNOOC’s privilege claims, and ITP actively participated in that Application by filing written materials and making submissions. Subsequently, CNOOC appealed the Order resulting from that Application but identified ITP’s status in the Appeal as “not a party on Appeal.”
Citing Rule 14.1(1)(m), which defines “Respondent” as a person named as a Respondent to an Appeal, Strekaf J.A. noted that ITP was not named by CNOOC and rejected ITP’s submission to be confirmed as a party. Strekaf J.A. then laid out the test for adding an Applicant as a Respondent under Rule 14.57: (i) whether the Applicant has a legal interest in the outcome of the proceedings; (ii) whether it is just and convenient to add the Applicant; and (iii) whether the Applicant’s interests can be adequately protected only if it is granted party status.
Applying the above test, Strekaf J.A. held that ITP should be added as a Respondent. Strekaf J.A. determined that ITP had a legal interest in the proceedings, brought this Application promptly, and were entitled to have their own counsel address the issues. As such, the Application was granted.
CARBONE V DAWES, 2024 ABCA 13 (STREKAF JA)
Rule 14.5 (Appeals Only with Permission)
The Applicant sought permission to Appeal a decision dismissing her Application to vary a Scheduling Order in respect of a Security for Costs Application filed by the Respondents. The Applicant commenced an Action for alleged wrongdoings in relation to a cosmetic surgery. The Respondents filed Security for Costs Applications.
An Applications Judge granted a scheduling Order for the Security for Costs Applications, which was varied. The revised schedule required the Applicant to conduct cross-examination on Affidavits between September 14 and 22, and to file and serve all Affidavit evidence by September 29.
The Applicant did not receive the transcripts of the cross-examination before her Affidavits were due, and applied on September 28 for an extension. The Chambers Judge determined that the deadlines in the scheduling Order were peremptory on the Applicant, and she could have requested expedited transcripts. The Application was therefore dismissed, and the Applicant was required to file her Affidavit evidence the next day. The Applicant served unfiled copies of her Affidavit evidence on September 29, and filed copies on October 3. The Applicant sought to Appeal the Decision.
The Court of Appeal considered whether permission to Appeal was required, pursuant to Rule 14.5. Justice Strekaf noted that Rule 14.5 requires permission to Appeal any pre-Trial decision respecting adjournments, time periods, or time limits, or on Applications to vary an Order scheduling limitation steps. Strekaf J.A. determined that Rule 14.5 therefore applied, and permission to Appeal was required.
The Court stated that, to obtain permission to Appeal under Rule 14.5, the Applicant must establish: (1) a serious question of general importance; (2) a reasonable chance of success on Appeal; and (3) that the Appeal will not unduly hinder the progress of the Action or cause undue prejudice without any proportionate benefit.
On the first branch, a “serious question of general importance” was stated as a matter of policy, principle, or law that might have precedential value. The Court determined that the Applicant did not meet this part of the test, as the Applicant argued that Chambers Judge was not impartial and denied her procedural fairness. These were not serious questions of general importance, nor did they have a reasonable chance of success. The Application was dismissed.
The Applicant sought permission to Appeal a Costs decision. Justice Antonio noted that since the proposed Appeal concerned Costs only, permission to Appeal was required pursuant to Rule 14.5 and the Applicant was required to establish the criteria set out in Brill v Brill, 2017 ABCA 235.
The Court held that the Application for permission to Appeal did not involve a question of general importance and the issues revolved around the specifics of the family-law case, which were fact sensitive. The Applicant argued that the Appeal raised important questions of finality and enforceability of Court Orders because the Chambers Judge varied an earlier Order which required each party to pay part of the Costs of an aborted reunification process. Justice Antonio rejected this argument, noting that the prior Order was not brought to the attention of the Chambers Judge. Ultimately, Antonio J.A. denied the Application for permission to Appeal.
Rules 14.5 (Appeals Only with Permission), 14.16 (Filing the Appeal Record) and 14.88 (Cost Awards)
The Applicant applied for permission to Appeal a Decision of the Court which denied the Applicant’s second application to restore his Appeal after it was struck for failing to file the Appeal Record by a date set by the Court (the “Second Restoration Application”). The Applicant filed an Appeal of a Trial Decision which was struck for failing to file the Appeal Record by the deadline set out in Rule 14.16(3). The Applicant’s first Application to restore the Appeal was allowed but the Applicant was directed to file his Appeal Record by a specified date, which the Applicant failed to meet, and the Appeal was struck for a second time.
The Applicant applied pursuant to Rule 14.5(1)(a) and Rule 14.5(2) for permission to Appeal the Second Restoration Application. The Court noted that: (1) its role under Rule 14.5(1)(a) is that of a gatekeeper; (2) permission to Appeal a Decision of single Judge of the Court of Appeal is to be granted rarely; and (3) an Applicant must show a compelling reason to require the Applicant and Respondent to reargue the issue, and for three Judges of the Court of Appeal to decide the issue.
The Court further noted that an Application for permission to Appeal is not a rehearing of the Applicant’s Second Restoration Application, but rather an Applicant must demonstrate a reviewable and material issue of law worthy of review by a full panel of the Court which on the facts was required to arise from the Order of the Court denying the Second Restoration Application and not the original Trial Decision.
The Court noted jurisprudence which set that pursuant to Rule 14.5(2), the Applicant must establish that the Order of the single Judge being reviewed: (1) raises a question of general importance which on its own deserves panel review; (2) rests on a reviewable and material issue of law worthy of panel review; (3) involves an unreasonable exercise of discretion which had a meaningful effect on the outcome of the decision and the outcome is worthy of panel review; or (d) rests on a palpable and overriding error of important facts affecting the Order made and the order is worthy of panel review (together the “Permission to Appeal Factors”). The Court additionally noted that other factors that may be considered include: whether there are conflicting decisions on the point; the standard of review that would be applied on the Appeal; and whether there are other good reasons why a full panel of the Court should review the Order under Appeal.
The Court determined that the Applicant’s submission failed to demonstrate that the interests of justice would be served by allowing a further level of review, noting that the Applicant provided an inadequate explanation for the delay in the matter and his stated desire to Appeal the Trial decision alone, did not serve to meet the significant burden on him to establish that the Court’s decision warranted a panel review. The Court also noted that the Applicant had failed to establish any of the Permission to Appeal Factors. The Court accordingly denied the Application and awarded the Respondent Costs pursuant to Rule 14.88
Rule 14.5 (Appeals Only with Permission)
Significant Costs were awarded against the Plaintiff after its claim was dismissed as limitation barred. The Plaintiff filed two Appeals, one regarding the substantive issues between the parties, and the second regarding the Costs Award. Eventually, the Plaintiff discontinued the substantive Appeal but pursued the Costs Appeal.
Rule 14.5(1)(e) makes it clear that a Costs Decision cannot be appealed to the Court of Appeal without permission. Costs Decisions are highly discretionary and permission to Appeal is granted sparingly. The purpose of the Rule is to “bring finality to costs orders and to conserve this Court’s time by screening out hopeless appeals on the issue of costs.” Therefore, parties face a high threshold in seeking permission to Appeal Costs decisions, and they are not set aside unless they are plainly wrong or the Judge below made an error in principle.
The test for permission to Appeal a Costs Award requires: (a) a good arguable case having sufficient merit to warrant scrutiny by a panel of the Court; (b) issues of importance to the parties and in general; (c) that the Costs Appeal has practical utility; and (d) that no delay in the proceeding will be caused by the Costs Appeal.
The Court found that Plaintiff failed to establish that, on its facts, the Costs Decision raised an issue of general or public importance. Questions of general or public importance involve matters of “policy, principle or law that might have precedential value”. None were present on the facts. Accordingly, the Appeal was dismissed.
BEHRISCH V BEHRISCH, 2024 ABCA 101 (FETH JA)
Rules 14.5 (Appeal Only with Permission) and 14.37 (Single Appeal Judges)
The Application was regarding permission to appeal a Consent Order granted during an early intervention case conference and to extend the time for filing the Appeal. This case involved a family law matter between a husband and wife with five children.
The Court reviewed Rule 14.5(1) and Rule 14.37. According to Rule 14.5(1)(d), an Appeal of a Consent Order requires permission to appeal. The Applicant must show that the Appeal raises an important legal question, has a reasonable chance of success, and any delay will not hinder the progress of the case or cause prejudice. Rule 14.37(2) allows for an extension of time to file an Appeal Application. The Court considered the factors outlined in Wandler v Crandall, 2017 ABCA 115, and concluded that an extension was justified in this case.
The Applicant’s health issues and the timing of receiving the Consent Order significantly affected her ability to file the Appeal on time. The Court found that granting an extension is in the interest of justice. The Application also met the requirements for permission to appeal under Rule 14.5(1). The Applicant’s request for an extension of time to file her permission to Appeal the Application was granted, along with the permission to Appeal the Consent Order.
MARSHALL V LEE, 2024 ABCA 86 (GROSSE JA)
Rules 14.14 (Fast Track Appeals), 14.16 (Filing the Appeal Record), 14.55 (Responsibility of Parties to Manage an Appeal) and 14.65 (Restoring Appeals)
The Applicant sought to restore her Appeal of a Decision of the Court of King’s Bench that addressed parenting and child support (the “Application”). Grosse J.A. granted the Application and extended time for the restoration of the Appeal to the date of the Order.
The Applicant filed her Notice of Appeal on July 21, 2023, without the assistance of counsel. The Appeal was a fast-track Appeal. As a result, the Applicant had one month to file her Appeal Record pursuant to Rules 14.14(2) and 14.16(3). The Applicant submitted her Appeal Record on August 18, 2023, but it was rejected on the basis that she did not upload a separate copy of the transcripts. On the same day, the Applicant took steps to rectify the error and submitted a separate copy of the transcripts. On August 21, 2023, the Applicant served counsel for the Respondent with unfiled copies of the Appeal Record and transcripts.
On August 22, 2023, the registry rejected the Applicant’s transcripts because it was not apparent that the submission was copied to opposing counsel. On August 22, 2023, the Applicant’s Appeal was struck because the Appeal Record was not filed within the time mandated by the Rules (the “Struck Notice”). Upon receiving the Struck Notice, the Applicant retained counsel who help her prepare and file the Application three days after receiving the Struck Notice.
The Respondent argued that the Appeal must be deemed abandoned pursuant to Rule 14.65(3)(b) because more than three months had passed since the Appeal was struck and the Application had not yet been granted. In response, Grosse J.A. commented that when an Appeal is struck, it may be restored with the filed written consent of the parties, which did not happen in this case.
Grosse J.A. further commented that parties and counsel should be mindful of Rule 14.55(1), which provides that parties to an Appeal are responsible for managing the Appeal and for planning its resolution “in a timely and cost-effective way”. Grosse J.A. further cited 1664694 Alberta Ltd v Beljan Development Management, 2022 ABCA 41 for the proposition that responsible management of an Appeal includes reacting responsibly to non-prejudicial slips.
Rule 14.16 (Filing the Appeal Record – Standard Appeals
The Applicant applied to restore his Appeal, which was struck due his failure to file an Appeal Record in accordance with Rule 14.16(3)(a).
The Court noted that the onus was on the Applicant to demonstrate that restoring the Appeal was in the interests of justice considering the factors set out in Shenner v Tornqvist, 2023 ABCA 240. Antonio JA determined that Applicant’s evidence did not assist in determining whether the Appeal could succeed. The Court noted that the Applicant did not apply to restore his Appeal for two months and determined that restoring the Appeal would prejudice the Respondents.
The Court denied the Applicant’s Application and awarded enhanced costs to the Respondents.
Rule 14.32 (Oral Argument)
The Plaintiff appealed an Order denying his Application to strike the Statement of Defence and to enter Judgment against the Defendant.
The Plaintiff sought a virtual hearing of the Appeal, which was denied. The Plaintiff indicated on his Notice of Appeal that the matter could be dealt with in writing. As a result, the Appeal was considered in writing, and
without oral argument, pursuant to Rule 14.32(2).
The Plaintiff sought to strike the Statement of Defence as disclosing no reasonable defence, and that the Statement of Defence was frivolous, irrelevant, improper, and constituted an abuse of process. The Application to strike was dismissed and the lower Court had ordered the Plaintiff to provide Security for Costs which was previously ordered. The Chambers Judge referred to the decision for Security for Costs, as it suggested that there was some merit to the Statement of Defence. He also noted that there were factual and legal matters not suitable for an Application to strike.
On Appeal, the Plaintiff argued that the Chambers Judge erred in relying on the Security for Costs Decision to determine whether there was merit to the defence. The Court of Appeal noted that Decision not to strike a Statement of Defence is discretionary and entitled to deference. There was no error identified that would warrant appellate intervention. Therefore, the Appeal was dismissed.
Rule 14.48 (Stay Pending Appeal)
The Applicant applied for a Stay pending Appeal of an Order releasing $223,726.50 to the Respondent in respect of the net proceeds from the sale of their family home (the “Underlying Order”) and, in the alternative, sought an Order setting the disputed amount of $83,769.23 (the “Disputed Amount”) in trust, pending the outcome of the Appeal. The Underlying Order was granted in response to an Application to interpret a Consent Order that determined how the proceeds of the sale of the family home would be distributed between the parties (the “Consent Order”).
The Court noted that the exercise of the Court’s discretion to grant a Stay pending Appeal pursuant to Rule 14.48(b) is guided by a threepart test, which requires that (1) there is a serious question to be tried; (2) there will be irreparable harm if the Stay is not granted; and (3) the balance of convenience favours granting the Stay.
The Court set out that an Appeal presents a serious issue if it is not frivolous or vexatious and determined that the Applicant’s arguments asserting that the Chambers Judge erred in interpreting how the Consent Order should be applied had sufficient merit to satisfy the first element of the test. With respect to the second element of the test, the Court noted Court reluctancy to grant Stays for money judgments and set out that the Applicant needed to establish a reasonable prospect that the Respondent would not be able to repay any amount ordered on Appeal. The Court concluded that there was a reasonable prospect that the Respondent would not be able to repay any amount ordered on Appeal. With respect to the third element of the test, the Court rejected the Applicant’s assertion that because the Respondent earned a for midable wage and would, therefore, not be inconvenienced by an Order restraining the entire amount of the sale proceeds. The Court, in any event, found that that the balance of convenience was satisfied by granting the alternate relief sought by the Applicant.
The Court accordingly granted the Application in part by determining that the Disputed Amount was to be held in trust pending the outcome of the Appeal, and interest in respect of the restrained amount, was to be accounted for, according to the terms of the Consent Order.
Rule 14.88 (Cost Awards)
The Respondent was successful on two Appeals. The first Appeal was in relation to an Application for advice and direction in an Estate Matter. The second Appeal was of the Costs Award. The Respondent applied to have costs of the Appeals settled but the Application raised several issues.
First, Rule 14.88(3) states that, unless otherwise ordered, Costs of an Appeal will be determined on the same scale that applied to the Order or Judgment in the Court below. While Costs were awarded in the Court below at two times Schedule C, Column 5, the Court of Appeal noted that automatic doubling of Costs should not be the norm. For example, in the Court below there were findings of misconduct. However, there was no misconduct by the Appellants in relation to the Appeals.
Second, Costs were awarded in the Court below under Column 5 because of the value of the Estate. Accordingly, Column 5 was the proper column for the Appeal on the merits. However, the appropriate column for the Costs Appeal was Column 1 since the amount of Costs awarded in the Court below fell within that column.
Third, the Appellants argued for only one set of Costs. The Court of Appeal disagreed and noted that it was the Appellants who commenced two Appeals. Since factums were necessary on both Appeals, Costs were awarded in relation to both.
Fourth, at the end of the oral hearing, the panel requested supplemental submissions on a point of law. The Appellants proposed that Item 22 of Schedule C was the relevant item, as it dealt with appearances on contested Applications before the Appeal Court, including brief. The Respondent proposed Item 12 of Schedule C as the relevant item, as it dealt with written argument at the request of the Trial Judge. The Court of Appeal was persuaded that Item 22 was the proper item for both the supplemental submissions and the appeal Costs submissions.
Lastly, the Respondent had made two Calderbank offers. The first offer after the factums in the merits Appeal were filed but before factums in the Costs Appeal were filed. The second offer, after the release of Judgment. The Court of Appeal found the first Calderbank offer to be a genuine offer which was bested. The second Calderbank offer had not been bested as it sought quadruple Costs. Therefore, the Respondent was entitled to double Costs from the date of the first Calderbank offer
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