Dispute Resolution (Nova Scotia) - Part A

This is Wayan Chow. Welcome to dispute resolution part A. In this part, we will look at the courts and civil lawsuits. Let's have a look at all the different steps within the life of a civil lawsuit in Nova Scotia. At the beginning, what we always have is some kind of dispute between people or businesses. Someone owes another person money. someone has caused harm to another person and that dispute cannot be resolved in any kind of amicable way between the pe the people or the businesses involved. So at some point you know one of the involved parties will resort to starting a lawsuit. Now, that lawsuit from a legal standpoint, the what we call a cause of action will usually involve a tort or a breach of contract. A tort very simply is some kind of wrongful act by one person that causes harm or injury to another person. A breach of contract is where a valid contract has been entered into and one of the parties has not lived up to their obligations under that contract. So in that dispute once the person who is owed money decides you know I can't you know we can't resolve this dispute anymore without you know without starting litigation. So that person will say, "I'm going to sue you." And then, you know, they would, you know, they they need to start a lawsuit. So the initial the initial thing that needs to be looked at is whether or not that person is eligible to start the lawsuit. There's something called a limitation period. Limitation period is usually a two-year period within which a lawsuit can be started. So that 2-year time period starts at the time that the plaintiff, so the person who starts a lawsuit, the time the plaintiff becomes aware of a claim that they can make against the defendant. So if there's a breach of contract, you know, they're owed money. Once they're owed the money, once they're aware that there's a breach of contract, that 2-year period starts running. So, assuming the plaintiff starts a lawsuit within that two-year limitation period, the plaintiff would then, usually with the help of a lawyer, prepare two documents, two legal documents called pleadings, a notice of action and a statement of claim. Those those pleadings would be filed with the court and also served on the defendant. A process server would be hired and they would track down the defendant and hand them copies of the notice of action and the statement of claim. The statement of claim is the more interesting of the two documents. It contains the details of the legal basis of the plaintiff's lawsuit. It would, you know, it would say, you know, there's a breach of contract, but would also contain a statement of the relevant facts that the plaintiff is relying on. Once the defendant is served with the notice of action and statement of claim, the defendant then needs to make a decision. Will I should I fight this lawsuit or not? If they if they want to fight the lawsuit, they will they will need to prepare a document, a pleading called a statement of defense. statement of defense would set out essentially the defendant's side of their case, their their version of the facts, you know, their their interpretation of the applicable law. And that statement of defense would need to be filed with the court and and served on the plaintiff. If the defendant decides not to fight the case or does not file and serve a state of defense within a specified time period, the plaintiff is considered to have you won their case by default and they can obtain a default judgment. The default judgment would be a a document issued by the court that would be ordering the defendant to pay the plaintiff a certain amount of money. Usually the amount that's been claimed in the statement of claim. There are also other pleadings that might come into play here. A counter claim may be issued by the defendant if the defendant feels that the the plaintiff owes owes the defendant money. So then a counter claim would be used and another another pleading called a reply could be issued by the plaintiff if the plaintiff wants to specifically address you know some of the allegations that are contained in the statement of defense. After the pleading stage, we move on to the pre-trial stage, which involves a number of different activities. So, this pre-trial period can be fairly long. It can involve a number of years of pre-trial of this pre-trial period before we reach an actual trial. The purposes of these pre-trial activities are to narrow down the issues and to encourage the parties to settle the case to avoid proceeding to a costly trial. A key step here is called discovery which involves discovery of documents and examination for discovery. Discovery of documents involves each party disclosing to the other party all of the relevant documents that they have in their possession. There's a legal obligation to disclose all relevant documents. Documents cannot be relevant documents cannot be hidden or destroyed. And there's also examination for discovery. So this involves each party asking questions of the other party to find out everything that the other party knows about the case. So it's usually one party's lawyer asking questions of the other party and vice versa. And all of that is recorded on a transcript. So everyone starts finding out a lot more about each about the other party's case. And throughout this period there could involve mediation where a third party uh third party mediator is is brought in to try to uh to try to reach a settlement of the case or or even without a mediator the two parties especially through their lawyers could be trying to settle the case without proceeding to trial. Now the reason that there's a lot of settlement discussion here is because you know especially with the discovery of documents and examination for discovery the parties are finding out more about each other's case they're figuring out what are the strengths and weaknesses you know do you know do I you know do I have a strong case do I have a do I have a weak case should I settle this if I have a weak case and also they're they're incurring more legal costs throughout this whole this process so and they may not want to incur any more legal costs. So that's another incentive for settling the case. Another another thing that happens in this pre-trial stage is a pre-trial or settlement conference. So this is a meeting involving both parties and their lawyers with a judge. So, it's not necessarily the judge who would sit in the trial of the case, but it is an actual judge of the court of the let's say the Nova Scotia Supreme Court. The judge would be would receive reports from both parties that set out, you know, the the details of the case. It also set out all of the information that's been obtained from the discovery of documents and examination of discovery and the the judge will have a good idea of the strengths and weaknesses of each party's case and the judge can can tell the parties you know this is you know you know this is a case that should be settled on this basis. will try to you will try to knock some sense into them to to settle the case without proceeding to trial. Let's say after all that pre-trial activity, the party still cannot reach a settlement. Then the only thing left to move on to now is a trial. So, let's say that our case is a civil case, uh, a personal injury case. A pedestrian has been hit by a car. The driver was allegedly texting while driving and didn't see the pedestrian and seriously injured the pedestrian. The pedestrian is suing the driver civily. uh and also let's say the police have also charged the driver with criminal negligence. So there's both a civil case and a criminal case. So in the in the civil case and in most civil cases the the court would be a judge alone. So, the judge would be the one making a decision about the personal injury case, whether or not the pedestrian or whether or not the driver is liable to the pedestrian for for negligence. In the criminal case, it could either be a judge alone or a judge with a jury. So that case of criminal negligence, the charge of criminal negligence against the driver could be heard by just a judge or a judge with the jury with the jury deciding uh guilt or innocence for the with regard to the driver. Now at trial there will be evidence introduced into court. Evidence is usually introduced using witnesses. We can have either ordinary witnesses or expert witnesses. Ordinary witnesses are testifying about what they actually saw or what they were what they actually heard or what they actually experienced. And expert witnesses testify by reviewing the evidence and applying their specific professional expertise in providing their opinion. So, example of an ordinary witness in the in the uh in the negligence trial of the uh of the negligent driver, the texting driver. We could have witnesses. Let's say there's uh another person who on the street who had who had witnessed the car hitting the pedestrian and had seen the driver looking down at a cell phone at the time of the of the impact. So that would be an ordinary witness. We could also have expert witnesses at that trial. the the uh the victim, the pedestrian would have suffered all kinds of serious physical injuries and we would have the court would have to determine, you know, what what uh what what the damages for those injuries would be. So, usually a medical doctor would be reviewing the evidence and testifying about the about the injuries. So that doctor would be considered an expert witness at the trial when the witnesses are called. When a lawyer calls a witness and ask questions of that witness that is called examination in chief. So let's say the lawyer for the for the pedestrian calls the pedestrian as a witness and asks questions about asks questions to the pedestrian about what what happened to them what they saw what they experienced that would be examination in chief. Now with every witness that's called the the lawyer for the other party for the opposing party has the opportunity to ask questions of that witness and that's called crossexamination. And there are rules of evidence that restrict how evidence or what evidence can be introduced. The most most famous rule of evidence would be the the hearsay rule. The hearsay rule says that for ordinary witnesses, you can only testify about what you actually saw. You cannot you cannot testify about secondhand evidence like or what you had heard. So if you were that person standing on the sidewalk and you saw this accident happen between the car and the pedestrian, that's not hearsay. you actually saw it and you can testify about what you saw. But let's say that that person told a friend about what they saw. So the friend heard about what what the what the person saw of this accident. So that friend who only heard it secondhand cannot testify about what the actual, you know, person at the scene saw. That would be called hearsay. Now at the civil case there there is something called a standard of proof. Oh standard of proof for both the civil case and the criminal case. In the civil case the plaintiff has to prove its case on the balance of probabilities. So that means that in that civil case where the involved the the texting driver, the pedestrian would have to show evidence that makes it that proves or makes it at least more than 50% likely that the that the driver was negligent, that the driver was actually texting at the time of the accident. So, it just has to be more than 50% likely that that that person was texting. In a criminal case, the crown has to prove guilt beyond a reasonable doubt. So, in that criminal negligence charge case, the the crown would have to show that the driver was texting beyond a reasonable doubt. not just more than 50% likely, but but to a a much higher level where there's no reasonable doubt that uh they that they were that they were not testing at the time. Once a trial court has rendered its decision, the losing party at trial has the option to appeal the decision to a higher court. An appeal court can overturn a trial decision only on errors of law, but not on errors of fact. Trial decisions of the Nova Scotia Supreme Court are appealed to the Nova Scotia Court of Appeal and the decisions of the Nova Scotia Court of Appeal can then be appealed to the Supreme Court of Canada. If a plaintiff has won their case and has received a judgment issued by the court, the story is not necessarily over. It can be entirely possible that the defendant who we call now the judgment debtor could refuse to pay the the plaintiff or could say I can't pay you. I don't have any money to pay you. Then the plaintiff can take additional enforcement steps to either garnish the judgment dtor's income. So if the if the if the defendant, the judgment dtor has a job receiving a salary from that job, a court can issue an order ordering the the employer to deduct a percentage of that salary to pay it to the plaintiff. Another order that a court can can issue is an order to seize and sell assets owned by the judgment debtor. So, if the judgment debtor owns a house or a car, that could be seized by the court and sold off with the proceeds being used to pay down the debt that's owed to the plaintiff. Given this very long and ownorous process, most cases never make it to trial. Many of them are settled or many of them are also just dropped by the by the plaintiff along the way. Litigation is uncertain. It's lengthy and costly. And there are and rarely are there actual winners in a litigation process. Let's talk about class actions and let's look at a real case. So this case involves a gas utility in Ontario called Consumer's Gas. So what was happening was that Consumer's Gas was charging uh late payment penalties to its customers and it was discovered that those penalties were charged at a rate that were that were illegal or criminal uh under under the criminal criminal code of Canada. So let's say this particular customer uh was charged an illegal late penalty of $25. So that customer, you know, has a right to sue Consumer's Gas to recoup that $25. But the problem is that, you know, that amount, that $25 amount for that one customer is so small, it's not worth the hassle uh to initiate a lawsuit. and it's just it's just too costly for the customer to uh to start a lawsuit and and you know hire a lawyer to to to carry on that that lawsuit. So in most instances the affected customer will just say you know to hell with it. You know it's not worth it and and do nothing about that uh illegal illegal $25 payment. Now with the ability to start a class action, we can instead of focusing on just one customer, we can look at all of the affected customers. So in this case, there were 500,000 affected customers. So those those customers, so that that whole group of customers were charged illegal late penalties of $150 million in total. So those customers as a group through a class action can sue Consumers Gas for the whole $150 million by being able to use a class action to recover the the late payment penalties. the the customers you have a a a practical and useful way of recovering the penalties that they have paid. Now, a thing to keep in mind too is that the the lawyers are presenting the customers. So, those are the plaintiffs lawyers. You know, they're they're willing to assist uh the customers in w in pursuing this lawsuit. now and they're very happy about that because once there's a judgment or a settlement of the case, uh, plaintiff's lawyers in class actions are usually paid what's called a contingency fee. So, a contingency fee is a fee that is calculated as a percentage of the actual amount that's been recovered in the lawsuit. So, that that rate is usually 25 to 40%. And with a contingency fee arrangement, if no money is recovered, the plaintiff lawyers receive nothing. So they only receive something if there is an amount that's been recovered by way of a judgment or settlement. So if we if we think about uh about this case, let's assume I don't know what the rate was that was applied in this case in terms of the contingency fee. If we assume that plaintiff's lawyers are paid uh let's say the the lowest uh 20 25 uh% Um, so that would amount to about, you know, 30 $38 million that are paid uh to to the lawyers out of the total of $150 million. To be able to proceed as a class action, the court has to certify a case as a class action. There are a number of criteria that have to be met before a court will provide that certification. The first criteria criteria is that there has to be common issues among all class members. With the consumer's gas case, it all of the affected customers had the same issue regarding the illegal late uh payment penalties and there has to be a representative plaintiff. So this is the the one person who represents one plaintiff who represents the whole the whole group the whole class and that representative plaintiff has to demonstrate a workable plan for fairly representing all class members interests and the third criteria is that there has to be a plan to notify all potential members of of the class. If there is a mailing list, uh that can be used to contact all of the affected members. Uh what another method of notification is putting ads in in newspapers or or or posting something posting something online. And the last criteria is is that it has to be shown that pursuing the case via a class action is preferable is the preferable procedure over traditional litigation where where one affected party sues the company. So having a whole bunch of different lawsuits. So the usual argument there is it is that it's much more efficient to have one class action instead of thousands of different and separate lawsuits against the company. Let's have a look at the court structure for civil lawsuits in Nova Scotia. A case always starts at a trial court. The two different trial courts in Nova Scotia are the Nova Scotia Supreme Court and the Small Claims Court. The Supreme Court is for claims over or greater than $25,000 and the small claims court is for is for claims of $25,000 or less. Decisions of those courts can be appealed to either the Nova Scotia Court of Appeal or the Nova Scotia Supreme Court. The court of appeal will hear appeals from decisions of the Supreme Court and the Supreme Court will hear appeals of decisions from the small claims court. The final court of appeal in Canada is the Supreme Court of Canada and that the Supreme Court will hear appeals from decisions of the Nova Scotia Court of Appeal. The reason we have lower and higher courts, we have trial courts, appeal courts, and even higher appeal courts is is a legal principle called the doctrine of precedent. Doctrine of president says that lower courts must follow the legal principles and decisions of higher courts in the same jurisdiction. What that means first of all is that all courts in Canada must follow the decisions of the Supreme Court of Canada. So that would include all of the different courts within Nova Scotia, the Nova Scotia, Nova Scotia Court of Appeal, uh Nova Scotia Supreme Court, as well as the small claims court. All of those courts and all the other courts and all the other provinces in Canada have to follow the legal principles in the decisions of the Supreme Court of Canada. Now within each province, let's say in Nova Scotia, we have a court of appeal. Court of Appeal is usually the highest court in a province. So that means that in Nova Scotia, the decisions of the Nova Scotia Court of Appeal have to be followed by the by the lower courts in Nova Scotia, the Nova Scotia Supreme Court and the small claims court. Now if we have decisions from other from courts in other provinces that may be relevant in helping us trying to decide a case you know in a court in front in Nova Scotia. Those decisions from courts in other provinces are not binding on Nova Scotia courts but may be persuasive and may be used to help the court make a decision in the Nova Scotia case.