Ontario Appeal Court Clarifies Lawyers' Role in Communicating With Experts

In a much anticipated decision, the Ontario Court of Appeal recently released its reasons setting out the parameters of legal counsel’s communication with expert witnesses.  The issue arose in a case called Moore v. Getahun (2015 ONCA 55) in which the plaintiff, Blake Moore seriously injured his right wrist in a motorcycle accident.  As a result of the treatment that he received at the emergency department at Scarborough General Hospital, including the realigning of the bones in his broken wrist and the application of a plaster cast to his wrist and forearm, Moore suffered permanent muscle damage.  He brought an action for negligence against the attending physician and the hospital. 

 

The central issues at trial were whether the doctor had fallen below the standard of care by applying a full circumferential cast on Moore’s wrist and whether the full cast had caused the permanent muscle damage.  The trial ended in a finding of liability.  Before trial the parties had agreed that the appropriate award of damages would be $350,000. 

 

The doctor appealed.

 

During the course of the trial, a number of issues were raised involving the preparation of the written report of the doctor’s expert witnesses.  The trial judge, Justice Janet Wilson, held that it was improper for counsel to assist an expert witness in the preparation of the expert’s report.  She was critical of the doctor’s counsel discussing the expert’s draft report with him during an hour and half telephone call.  She concluded that there had been significant changes to the expert’s report as a result.  Justice Wilson concluded that it had put the expert in a very awkward position as he was “obviously totally unaware that it may be improper to discuss and change a draft report, as a breach of his duty of impartiality”. 

 

Justice Wilson referred to rule 53.03 of the Ontario  Rules of Civil Procedure.  That rule was amended in 2010, as a result of recommendations of the Honourable Coulter Osborne in his review of Ontario's civil justice system and included requiring an expert witness to provide an acknowledgement that his or her opinion evidence was fair, objective and non-partisan and that such duty prevailed over any obligation which the expert may owe to any party on behalf of whom she was engaged.  Justice Wilson concluded the purpose of the rule was to ensure the independence and integrity of the expert witness.   Justice Wilson concluded that the expert's primary duty was to the court and in light of the change of the role of expert witnesses under the “new rule”, she concluded that counsel’s practice of reviewing draft reports should stop.   "There should be full disclosure in writing of any changes to an expert's final report as a result of counsel’s corrections, suggestions or clarifications to ensure transparency in the process and to ensure that the expert witness is neutral."

 

There was significant uproar from the legal profession and in the community of expert witnesses as a result of Justice Wilson's decision   The Advocates' Society and the Canadian Institute of Chartered Business Valuators struck task forces to develop a response.  Both of these organizations intervened in the appeal to provide their perspectives.  The Holland Access to Justice in Malpractice Group, also an intervener, prepared a positon paper that stated that the trial judge’s ruling would have the effect of impairing normal, reasonable and prudent litigation practices, would substantially increase the cost of litigation, would do a disservice to the court in terms of hearing “fulsome, well organized and appropriate evidence, and ultimately would result in a chilling and significantly restrictive effect on access to justice”.

 

The Canadian Defence Lawyers Association submitted that the trial judge’s ruling was “unprecedented, unsupported in law and seriously flawed”.

 

In all, six interveners put forward positions on counsel’s role in helping to shape and prepare expert reports for use at trial.

 

The appeal was heard before Justices Laskin, Sharpe and Simmons of the Ontario Court of Appeal.  Justice Sharpe wrote the decision.

 

Not surprisingly, Justice Sharpe accepted the positions taken by the interveners as to counsel’s role in communicating with expert witnesses. 

 

First, he disagreed with Justice Wilson’s statement that the 2010 amendments to rule 53.03 introduced a “change in the role of expert witnesses”.  He held that the amendments were only intended to clarify and emphasise the existing duties of expert witnesses.  Expert evidence presented should be seen to be the independent product of the expert uninfluenced as to form or content by counsel. Expert witnesses should provide independent assistance to the court by way of objective unbiased evidence and should not assume the role of an advocate.  However, Justice Sharpe found that lawyers have a very important role to play in ensuring that expert reports are appropriately shaped and address the relevant issues to be determined at trial: "The independence and objectivity of expert witnesses is fostered under existing law and practiced in a number of ways including the ethical and professional standards of the legal profession which forbid counsel from engaging in practices likely to interfere with the independence and objectivity of expert witnesses."

 

Justice Sharpe agreed that it would be bad policy to disturb the well-established practice of counsel meeting with expert witnesses to review draft reports.  Expert witnesses need the existence of lawyers in framing the reports in a way that is comprehensible and responsive to the pertinent legal issues in a case. 

 

He further held that consultation and collaboration between counsel and expert witnesses is essential to ensure that the expert understands the duties reflected by the rules and the acknowledgement of the expert’s duty.

 

Justice Sharpe ruled that leaving an expert entirely to his or her own devices or requiring all changes to be documented in a formalized written exchange would result in increased delay and costs in a regime already struggling to deliver justice in a timely and efficient manner. 

 

Justice Sharpe also dealt with the issue of the extent to which consultations between counsel and expert witnesses need to be documented and disclosed to an opposing party.  He found that litigation privilege protects communications with experts but that the litigation privilege was qualified and that disclosure may be required in certain situations. 

 

Absent a factual foundation to support a reasonable suspicion that counsel has improperly influenced the expert, a party should not be allowed to demand production of draft reports or notes of interactions between counsel and an expert witness.

 

In this case, although Justice Sharpe concluded that the trial judge had erred in holding that it was unacceptable for counsel to review and discuss the draft expert report and that she had further erred using the written expert reports that were not entered into evidence or the subject of cross-examination to contradict and discredit aspects of the oral testimony of the experts, those errors did not affect the outcome of the trial and as there was no substantial wrong or miscarriage of justice that flowed from the errors, a new trial would not be justified. 

Regards,

Blair  

 

Supreme Court Strikes Down Legislation Providing For Court Hearing Fees

The Supreme Court of Canada recently released its decision in Trial Lawyers Association of British Columbia v. British Columbia (Attorney General) 2014 SCC 59.  The majority of the Supreme Court struck down legislation in British Columbia which obliged parties to pay fees to use courtrooms for trials. 

 

The parties in the case were involved in a child custody dispute.  The plaintiff brought an action to have the custody issues resolved.  In order to get a trial date, she had to undertake in advance to pay a court hearing fee.  At the outset of the trial, the plaintiff asked the judge to relieve her from paying the hearing fee.  The judge reserved his decision on the request until the end of the trial.  The parties were not represented by lawyers and the hearing took 10 days.  The hearing fee amounted to $3,6000 – almost the net monthly income of the family.  After legal fees had depleted her savings, the plaintiff could not afford to pay the hearing fee.  In declaring the legislation unconstitutional the Supreme Court held that these hearing fees infringed upon the plaintiff's constitutional right of access to justice and offended the rule of law.

 

Writing for the majority of the court, Chief Justice Beverley McLachlin, stated, “As access to justice is fundamental to the rule of law and the rule of law is fostered by the continued existence of the section 96 Courts (Superior Courts of the Provinces) it is only natural that section 96 of the Constitution Act, 1867 provides some degree of constitutional protection for access to justice…when hearing fees deprive litigants of access to the Superior Courts, they infringe the basic right of citizens to bring their cases to court.  That point is reached when the hearing fees in question cause undue hardship to the litigant who seeks the adjudication of the Superior Court.”  

Justice McLachlin held that a fee that is so high that it requires litigants who are not impoverished to sacrifice reasonable expenses in order to bring a claim may, absent adequate exemptions, be unconstitutional because it subjects litigants to undue hardship, thereby effectively preventing access to the courts.  She held that it is the role of the provincial legislatures to devise a constitutionally compliant hearing fee scheme.  As a general rule, hearing fees must be coupled with an exemption that allows judges to waive the fees for people who cannot, by reason of their financial situation, bring non‑frivolous or non‑vexatious litigation to court.  A hearing fee scheme can include an exemption for the truly impoverished, but the hearing fees must be set at an amount such that anyone who is not impoverished can afford them.  Higher fees must be coupled with enough judicial discretion to waive hearing fees in any case where they would effectively prevent access to the courts because they require litigants to forgo reasonable expenses in order to bring claims.                      

Regards,

Blair

Court Breathes New Life Into Summary Judgment Process

For many years, Ontario litigation counsel cautioned their clients against making motions for summary judgment, even when they believed that the client's case was strong, because of the expense, delay and uncertainty inherent in making such motions.  Under Ontario's Rules of Civil Procedure, summary judgment was available where the court was satisfied that there was no genuine issue requiring a trial.  However, issues of credibility were often viewed by motion judges as "genuine" issues that required a trial to resolve.  In addition, motion judges had limited fact finding powers.

 

In 2010, the summary judgment rule was amended based on the recommendations of former Associate Chief Justice Coulter Osborne.  The new rules gave a judge hearing a motion for summary judgment the powers to weigh evidence, evaluate the credibility of a witness and to draw inferences from the evidence.  In the Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA764, a five judge panel of the Ontario Court of Appeal explained the effect of the 2010 amendments and adopted a new "full appreciation test" that judges should use to decide whether a trial was required.  Under this test, the motion's judge must assess whether a trial was necessary to enable the court to fully appreciate the evidence and issued posed by the case.  The Court of Appeal held that summary judgment should be granted only where the benefits of the trial process are not required to achieve a "full appreciation" of the evidence.  

 

While the Court of Appeal meant to be helpful in articulating the "full appreciation test", motion judges were still reluctant to grant summary judgment in cases where they considered that a trial would ensure "fairness" in resolving a dispute.

 

In a recent decision of the Supreme Court of Canada (Hryniak v. Mauldin, 2014 SCC 7), the court held that a "shift in culture" in the approach to summary judgment cases was required.  The court held that, far from ensuring it, undue process and protracted trials, with unnecessary expense and delay, could prevent "fairness" in the dispute resolution process.  The court ruled that if the process is disproportionate to the nature of the dispute and the interest involved, it will not achieve a fair and just result.  

 

The court recognized that the summary judgment rule was amended to improve access to justice.  However, failed or even partially successful summary judgment motions only added to costs and delay.  The court set out to address those concerns in this case.  In its decision, written by Justice Karakatsanis, a former judge of the Ontario Court of Appeal, the Supreme Court rejected the "full appreciation test".  It held that the new fact-finding powers granted to motion judges under the new rules may be employed on a motion for summary judgment unless it is in the interest of justice for them to be exercised only at trial.  These new powers included hearing oral evidence, deciding issues of credibility and making findings of fact. 

 

Justice Karakatsanis held that the power to hear oral evidence should be employed when it allows the motion judge to reach a fair and just adjudication on the merits and it is the "proportionate" course of action.  Where a party seeks to lead oral evidence, it should be prepared to demonstrate why such evidence would assist the motion judge and to provide a description of the proposed evidence so that the judge will have a basis for setting the scope of the oral evidence.  

 

The Supreme Court ruled that on a motion for summary judgment under the new rules, the judge should first determine whether there is a genuine issue requiring trial based only on the evidence before him without using the new fact finding powers.  If there appears to be a genuine issue requiring a trial, he should then determine if the need for a trial can be avoided by using the new powers under the rules.  Justice Karakatsanis held that the use of such powers will not be against the interest of justice if they lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.  

 

Then, if summary judgment is unsuccessful or only partially successful, the judge should make use of the trial management powers provided in the rule and the court's inherent jurisdiction to craft a trial procedure that will resolve the dispute in a way that is sensitive to the complexity and importance of the issue, the amount involved in the case and the effort expended on the failed motion.  

 

All of this leads to the obvious conclusion that parties will make motions for summary judgment more frequently, even where they are not confident of success, with a view of taking advantage of the proportionality course of action or to utilize the court's trial management powers of the new rules if the motion fails.  

 

Regards,

 

Blair 

Settlement Privilege - Supreme Court Clarifies use of Pierringer Agreements

The Supreme Court of Canada recently clarified the law with respect to the extent of disclosure that must be made in settling multi-party litigation.

In the case of Sable Offshore Energy Inc. v. Ameron International Corp. (2013 S.C.C. 37), the court unanimously held that the settling defendants in a "Pierringer Agreement" did not need to disclose the amounts that they had settled for the non-settling defendants.

In this case, Sable undertook an ocean project and built several offshore structures and onshore gas processing facilities in Nova Scotia. A number of defendants, including Ameron, supplied Sable with paint for parts of the Sable structures. Sable brought three law suits against Ameron and 12 other defendants, alleging that the paint failed to prevent corrosion.

Sable subsequently entered into three Pierringer Agreements with some of the defendants. A Pierringer Agreement allows one or more defendants in a multi-party proceeding to settle with the plaintiff and withdraw from the litigation, leaving the remaining defendants responsible only for the loss they actually caused. As part of the agreements, Sable agreed to amend its statement of claim against the non-settling defendants to pursue them only for their share of liability. All the relevant evidence in the possession of the settling defendants would, in accordance with the agreements, be given to the plaintiff and be discoverable by the non-settling defendants.

Ameron and another defendant, Amercoat Canada, did not settle. All the terms of the Pierringer Agreements were disclosed to Ameron and Amercoat except the amounts that had been agreed upon. The settlement agreements were approved by the court. Ameron brought an application for disclosure of the settlement amounts paid under the Pierringer Agreements. Sable took the position that the amounts were subject to settlement privilege. The application judge agreed. However, the Nova Scotia Court of Appeal overturned that decision and ordered that the amounts be disclosed.

The Supreme Court of Canada unanimously allowed Sable's appeal and ordered that it need not disclose the settlement amounts to Ameron and Amercoat, the non-settling defendants.

Justice Abella, writing for the court, held that the settlement amounts were covered by settlement privilege.

Justice Abella further held - Settlement privilege promotes settlements. Parties will be more likely to settle if they have confidence from the outset that their negotiations will not be disclosed. Settlement privilege covers settlement negotiations whether or not a settlement is reached. Since the negotiated amount is a key component of the "content of successful negotiations", reflecting the omissions, offers and compromises made in the course of negotiations, it too was protected by the privilege.

Justice Abella held that there are, inevitably, exceptions to the privilege. To come within those exceptions a defendant must show that on balance "a competing public interest outweighs the public interest in encouraging settlement". For example, those countervailing interests have been found to include allegations of misrepresentation, fraud or undue influence as well as preventing a plaintiff from being overcompensated.

In this case, the settlements negotiated, i.e. Pierringer Agreements, were developed in the United States to address obstacles in settling complex multi-party litigation. Under a Pierringer Agreement, the plaintiff's claim was only extinguished against those defendants with whom it settled; the claims against the non-settling defendants continued. The settling defendants were assured that they could not be subject to a contribution claim from the non-settling defendants who would be accountable only for their share of liability at trial.

In Canada, the courts have included additional protections for non-settling defendants such as requiring that they be given access to the settling defendants evidence. In addition, the agreements in this case specified that their non-financial terms would be disclosed to the court and the non-settling defendants.

The non-settling defendants received all the non-financial terms of the Pierringer Agreements. They have access to all the relevant documents and other evidence that was in the settling defendants possession. They have also the assurance that they would not be held liable for more than their share of damages. In addition, Sable agreed that at the end of the trial, once liability had been determined, it would disclose to the trial judge the amounts it settled for.

As a result, should the non-settling defendants establish a right to set-off in this case, their liability for damages would be adjusted downwards if necessary to avoid over-compensating the plaintiff. With all those protections in place, Justice Abella did not see how knowledge of the settlement amounts would materially effect the ability of the non-settling defendants to know and present their case.

She held that a proper analysis of the claim for an exception to settlement privilege does not simply ask whether the non-settling defendants derived some tactical advantage from disclosure, but whether the reason for disclosure outweighs the policy in favour of promoting settlement. She found that there was little harm in denying disclosure of the settlement amounts in this case.

Regards,

Blair