The Simplified Procedure In Long-Term Disability Claims

Overview

The Simplified Procedure provided for in Rule 76 of the Rules of Civil Procedure was introduced into our litigation system in 1996 and expanded in 2002 to encompass claims for up to $50,000.00. The purpose of the Simplified Rules is to reduce the procedure and attendant cost associated with such claims and thereby promote access to justice. In my view, the Simplified Procedure is tailor made for long-term disability claims. The reasons are at least four-fold: (1) speed; (2) a judicial determination on the merits which can be used in future; (3) preclusion of an examination for discovery of the Plaintiff; (4) a greatly reduced standard for the granting of summary judgment. I will deal with each of these in turn.

Speed

When bringing a claim under the Simplified Procedure, it is strongly advisable to front-end load your efforts, by conducting the necessary interviews, gathering the relevant documents and obtaining the names and addresses of persons who might have knowledge of the matters in issue, all prior to the issuance of the Statement of Claim. This will allow you to prepare and deliver your client’s Affidavit of Documents after the Statement of Defence is delivered. In turn, this will allow you to arrange a settlement discussion with opposing counsel so as to satisfy the precondition for the filing of a Notice of Readiness for Pre-trial Conference provided for in Rule 76.09(3). Once the Notice of Readiness has been filed, the Court will schedule a Pre-trial Conference at which a trial date will be set. Proceeding in this manner will move the action forward with lightning speed and there is not a thing the defence can do about it. Just as importantly, I see nothing in the Rules to provide that delivery of a Notice of Readiness for Pre-trial Conference precludes the bringing of a motion, such as is the case under Rule 48.04 on the filing of a Trial Record. Thus, if the Defendant’s Affidavit of Documents should prove to be deficient, a motion can be brought while the action works its way onto the trial list. It can accordingly be seen that the use of the Simplified Procedure in this manner is entirely within the Plaintiff’s control and cannot be stalled by obstructionist tactics of the defence.

A slight wrinkle with this is found in Rule 78, which requires that a mandatory mediation be held in Simplified Procedure actions within 150 days after the close of pleadings. In my experience, the Court staff in Toronto will not permit the filing of a Notice of Readiness for Pre-trial Conference until a mandatory mediation has been held. I cannot find anything in the Rules to support this practice and other judicial centres may differ. (Rule 24.1.09(2)(b) provides that mandatory mediation applies only where assigned by the Regional Senior Judge, and I understand there is mandatory mediation in Simplified Procedure actions in Ottawa for example but not in London.) The point here is that, either way, the action can move forward on a vastly expedited basis. I expect that under the scenario outlined above, an action would come to trial within a year in most judicial centres, if not settled at a mediation or Pre-trial Conference. For Plaintiffs dependent upon disability benefits as their sole source of income, the advantages associated with the Simplified Rules cannot be underestimated.

A Judicial Determination

A secondary benefit of the Simplified Rules is the prospect of a judicial determination on the merits of the claim. While it is undoubtedly the case that a Court can only award benefits up to the date of trial and cannot make a finding or declaration of ongoing disability, an insurer faced with a judicial determination that the Plaintiff is entitled to disability benefits will be hard pressed to later terminate the benefits in the absence of a clear change in circumstances. There is no doubt a Court would take a highly unfavourable view of “litigation by instalments” forced on a Plaintiff by a termination of benefits after a judgment to the contrary. Thus, as a practical matter, an early judicial determination putting the Plaintiff back “on claim” is likely to have long lasting consequences.

Preclusion of an Examination of the Plaintiff

Rule 76.04 provides that examination for discovery, examination by written questions, cross-examination of a deponent of an affidavit and examination of a witness on a motion “are not permitted in an action under this Rule.” Faced with this prohibition, insurers have sought to obtain rulings that long-term disability claims are not available to be heard under the Simplified Procedure. These attempts have been unsuccessful. In Keddy v. Clarica Life Insurance Co., [2002] O.J. No. 5109, Browne J. rejected the suggestion that a long-term disability claim could not proceed under the Simplified Rules where the claim was restricted to benefits up to the date of trial. In response to the argument that more was at stake due to the possible payment of future benefits, Browne J. said: “It may well be that there is potentially future litigation between the same parties dealing with the issue of entitlement to disability benefits but that will be about entitlement to disability benefits after the time of trial in the present action and based upon evidence which may come into being after this trial.” Leave to appeal Justice Browne’s decision was refused: [2002] O.J. No. 4984.

In a far more daring attempt, the insurer in Antunes v. Great West Life Assurance Company(2005 CanLII 47734, S.C.J.) sought to amend its Statement of Defence to claim a declaration that the Plaintiff was not entitled to benefits after the date they were terminated. The insurer argued that since Rule 76.02(1) provides that a claim under Rule 76 must be “exclusively” for money or property, the claim for a declaration could not proceed under the Simplified Rules. Not surprisingly, Master Dash found this tactic to be an abuse of process designed only to circumvent the Simplified Rules and to allow the Defendant the rights of discovery it wished to have. In obiter statements with which I entirely agree, the Master stated that a claim for a declaration should not in any event cause the action to be removed from the Simplified Procedure, since a declaration that, for example, a Plaintiff is totally disabled is nothing more than a request that the Court make a finding of fact to that effect. Reasoning by analogy to cases where jury notices have been allowed where a declaration has been sought, the Master held that a claim for a declaration is ancillary to the claim for a monetary judgment and should not have the effect of causing the action to be moved out of the Simplified Procedure.

The lesson from these cases is that insurers simply do not like the Simplified Rules. They of course prefer the opportunity to examine the Plaintiff for discovery in order to try and obtain information which can be used to discredit the claim. While this is not a reason to commence an action under the Simplified Rules, it is a procedural benefit.

A Reduced Standard for Summary Judgment

Under the ordinary Rules, it is exceedingly difficult to obtain summary judgment, as a judge is precluded from making findings of fact on disputed evidence. In sharp contrast, Rule 76.07(9) states: “The presiding judge shall grant judgment on the motion unless, (a) he or she is unable to decide the issues in the action without cross-examination; or (b) it would be otherwise unjust to decide the issues on the motion.” The Courts have recognized the significance of this language and have held that the rule empowers a judge to make findings of fact and credibility on a motion for summary judgment. It is only if the judge is unable to decide the issues or it is otherwise unjust to grant the motion that the motion would be denied. Thus, in Newcourt Credit Group Inc. v. Hummel Pharmacy Ltd. (1998), 38 O.R. (3d) 82 (Div. Ct.), the Divisional Court overturned a decision dismissing a motion for summary judgment and granted judgment in a commercial lease action where the
defence was one of misrepresentation.

Similarly, in a well reasoned decision, Masini USA Inc.v. Simsol Jewellery Wholesale Ltd.(2004), 67 O.R. (3d) 229 (S.C.J.) Spence J. granted a motion for summary judgment in the face of disputed versions of a commercial transaction where the documentary evidence supported the Plaintiff’s version of events. Spence J. held that it is not sufficient for a Defendant to raise a genuine issue for trial as that term is used under Rule 20.  Rather, a judge is required to try and resolve disputed issues of fact and determine whether judgment can safely be granted in the absence of cross-examination.

In applying these principles to long-term disability actions, it can be seen that Plaintiffs have great scope to bring motions for summary judgment and obtain judgment if an insurer does not have a credible, well reasoned basis for denying payment of disability benefits. It would seem to me that without a supportive defence medical report or similar basis for its position, an insurer is at real risk of having its defence dismissed out of hand on a motion for summary judgment. This possibility should not be overlooked in evaluating the claim, as summary judgment offers an even more expeditious basis for bringing the matter to a conclusion.

Additional Points to Consider

In deciding whether to bring a claim under the Simplified Procedure, there are a few additional matters to consider. First and foremost, as the Simplified Procedure is available for claims of up to $50,000.00, it would not be suitable for an action where there is a real possibility of a substantial aggravated or punitive damage award. On the other hand, the cost consequences of bringing a claim under the ordinary procedure and recovering judgment of less than $50,000.00 is enough to give any litigant great pause. Rule 76.13(3) provides that in those circumstances, the Plaintiff “shall not recover any costs” unless the action was under the Simplified Procedure at the time of trial or the Court is satisfied that it was reasonable for the action to have been commenced and continued under the ordinary procedure. Rule 76.13(4) states that these consequences apply despite any Rule 49 offers to settle, and Rule 76.13(6) states that the Plaintiff may, in the trial judge’s discretion, be ordered to pay all or part of the Defendant’s costs, in addition to any costs the Plaintiff is required to pay as a result of a Defendant’s offer to settle. Thus, draconian and crippling cost consequences can occur if it is determined that the Simplified Procedure should have been used but was not by an overly aggressive or ambitious Plaintiff. This puts a great premium on the realistic evaluation of cases by counsel and highlights the need to do so at an early stage.

Given the absence of examinations for discovery, documentary production is another area which merits great attention in Simplified Procedure actions. In ordinary actions, where the opposing party’s Affidavit of Documents is deficient, this subject can be usefully explored at the examination for discovery and undertakings obtained for further production. Counsel do not have that luxury in a Simplified Procedure action. Rather, one is left to bring a motion for a further and better Affidavit of Documents. In a case I was involved in, Guzha v. Eclipse Colour & Imaging Corp., [2004] O.J. No. 5686, Master MacLeod made a number of important observations concerning the significance of the Affidavit of Documents in a Simplified Procedure action, as follows: Para. 1: “Inadequate documentary production is problematic in any action but it is even more so under Rule 76. The obligation of a party to make full, comprehensive and fair disclosure is therefore particularly acute in these cases and must be scrupulously observed.” Para. 5: “Obviously it was hoped that reducing the amount of procedure would reduce expense and increase access to justice. It was not intended that the rule would deprive claimants of justice by making it difficult to prove their case.” Para. 7: “In cases where the plaintiff requires evidence in the possession of the defendant in order to prove the case, justice will be thwarted if there is not an adequate mechanism to compel production. Documentary production has enhanced significance in Rule 76 cases and the responsibility on each party to fully comply with production obligations must be taken extremely seriously.” With these observations in hand, it seems to me that where there is any indication that a Defendant’s Affidavit of Documents is deficient and that categories of documents may exist which have been omitted, the Court will make an appropriate order for relief pursuant to Rule 30.06.

Conclusion

As I have tried to demonstrate, it is my strong belief that the Simplified Procedure represents a powerful tool in the litigation arsenal and can be used to great advantage on behalf of Plaintiffs in long-term disability actions. In addition, as discussions are at hand to increase the monetary limit of the Simplified Rules to $100,000.00, these issues are bound to take on added importance.