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Settlement Discussions & Demand Letters
Some disputes can be resolved without formal litigation. Depending on the parties, engaging in pre-litigation settlement discussions can be fruitful, even before the delivery of a demand letter. In other cases, it might make more sense to send a demand letter first, especially where the relationship has soured between the parties. Demand letters can often lead to settlement discussions but are sometimes ignored.
Assess your Case
Litigation is both time consuming and expensive, so before jumping into the litigation battlefield it is important to consult with a lawyer to determine whether you are likely to be successful in litigation, and to identify any leverage.
You need to consider the facts both helpful and unhelpful to your case, what the law is, what evidence you have, whether any limitation periods apply and what type of damages you can claim, amongst other factors.
Before commencing an action, you also need to determine the correct jurisdiction to bring your claim. This refers to both the correct level of court and geographical location.
A claim of more than $100,000 must be brought in the Superior Court of Justice under the normal Rules of Civil Procedure. Claims over $25,000 and up to $100,000 should be brought in the Superior Court of Justice under the Simplified Procedure. Claims up to $25,000 must be brought in Small Claims Court.
Typically, an action will be commenced in the city where the claim arose, but this can vary based on a variety of factors including any contractual terms referring to jurisdiction, or the location of the parties.
Exchange of Pleadings
Litigation is commenced by a Statement of Claim, setting out the material facts supporting the claim, alleged damages and relief sought by the plaintiff.
The defendant has 20 days to respond with a Statement of Defence. A defendant also has the option to commence a Counterclaim or Crossclaim at the same time they deliver their Defence.
After the delivery of all pleadings, counsel will often agree to a discovery timetable which outlines when documentary and oral discoveries will be provided.
Each party must prepare an Affidavit of Documents (“AOD”) which discloses all documents in their possession, power or control that are relevant to any issue in dispute in the action, even if they are damaging to their case. This includes documents such as pictures, letters, e-mails, maps, graphs, and video clips, to name a few. Documents that are privileged must be identified in the AOD but need not be provided to the other side.
The next step is to conduct an oral examination of discovery for each party to the action. During these examinations, lawyers for each party will ask the other parties questions under oath in order to gain an understanding of their position and the evidence they are likely to give at trial.
For more information about the discovery process, please see our article “The Discovery Process in Superior Court: What You Should Understand”.
Any party to the action can bring a motion throughout the litigation process to obtain a Court order to resolve an interim or procedural dispute. For example, motions can be brought for substituted service, to compel answers to undertakings given at discoveries, to exclude evidence, or for summary judgment. Typically, the judge will look at written affidavit evidence on a motion. In most cases there is opportunity for oral cross-examination of written evidence.
Some matters are required to partake in mandatory mediation, where a neutral third party facilitates communication among the parties to assist them in reaching a resolution. This applies to Superior Court actions commenced in Toronto, Ottawa, or the County of Essex, other than actions placed on the Commercial List in Toronto, mortgage actions, actions under the Construction Act, actions under the Bankruptcy and Insolvency Act and actions certified as class proceedings, amongst other exceptions.
The mediation session must take place within 180 days after the first defence has been filed, unless the court orders otherwise and the cost is divided equally amongst the parties. If the action is not resolved, it will continue through the litigation process.
Setting the Matter Down for Trial/Pre-Trial Conference
Once the discovery stage is complete, any party who wishes to have the matter set down for trial can serve and file a Trial Record. This will put the matter on the trial list. It will often take several months before the trial is heard.
Prior to trial, a pre-trial conference will occur with the lawyers and a judge. They will discuss the possibility of settlement, the issues and positions of the parties, witnesses that are likely to be called at trial and any steps that need to be completed before trial.
At the trial, each party will be given the opportunity to make oral submissions, present evidence and call witnesses. Opposing counsel will be given the opportunity to cross-examine any witnesses. Trials often last multiple days for complex matters and require a significant amount of preparation.
Once the trial is complete the judge will often reserve judgment and may take several weeks or months after the trial to issue their reasons for judgment. Typically, costs will be awarded to the successful party on a partial indemnity scale.
Receiving a favourable order from a judge is a huge relief after the lengthy litigation process. While sometimes this means that the losing party will simply pay what they owe to the successful party or abide by the order, more often it is not so simple.
Where the judgement is for a monetary amount, if the losing party (the “debtor”) is not forthcoming in paying, the successful party (the “creditor”) has a few options to enforce their judgment. They can seek compensation through garnishments, seizure and sale of personal property or seizure and sale of land. This largely depends on whether the debtor has any assets and whether there are other creditors in line to collect.
Where the losing party fails to abide by an order that is not for a monetary amount, the successful party can obtain a contempt order against them.
For more information about enforcing judgments, please see our article “Enforcing Judgments: Collecting on Your Wins”.
It is important to understand the various stages of litigation. Parties should consider whether they are willing to invest the significant amount of time and money involved in seeing litigation through to trial. Consulting with an experienced lawyer can assist parties in determining their chances of success, an estimate of costs and what the timeline might look like, amongst other things.
Please contact Michael Paiva for more information, or if you require assistance with a litigation matter in the commercial, construction or municipal spheres.