When building civil cases, lawyers must determine whether they are making the claim within Ordinary Procedure or Simplified Procedure. Simplified Procedure is a clear, less expensive process to resolve civil cases in Ontario.
On January 1, 2020, the Ontario government changed the Rules of Simplified Procedure, including changes that increased the maximum amount a person can claim from $100,000 to $200,000. In other words, if the total value of your case was $200,000 or less, your lawyer could start your lawsuit under Simplified Rules. This change was made to allow families, individuals, and businesses in Ontario to solve their legal issues efficiently while spending less money.
While the COVID-19 pandemic has caused backlogs in our court system and therefore made it difficult to assess the effectiveness of the change, it is clear there has been an increase in cases brought before the Court to move matters from Ordinary Procedure to Simplified Procedure. More lawyers are now having to ask themselves which procedure is better for the cases they take on.
In Long-Term Disability (LTD) cases, this question can be answered in a straightforward manner. By determining the value of a claim based on: (a) the amount of the monthly benefit, (b) the maximum duration the monthly benefit is payable (e.g. to age 65), (c) the amount (if any) of Canada Pension Plan Disability (CPPD) and/or other benefits that are deductible, and (d) whether the insurer’s handling of the claim could warrant extra-contractual damages, lawyers can place their cases under the appropriate procedure.
However, some lawyers are hesitant to begin LTD actions under Simplified Procedure due to a lack of clarity over whether Simplified Procedure prevents a court from awarding declaratory relief.
Declaratory relief (or a Declaration) is when the court is presented with a legal question, seeking a declaration with respect to the parties’ rights. Declaratory relief is important in LTD claims that go to trial, because at the end of the trial the court will declare the claimant either disabled or not disabled. Unsurprisingly, lawyers want to make sure it can still be awarded if they make a claim in Simplified Procedure instead.
There is good news, though. A court can award declaratory relief within Simplified Procedure.
What does the jurisprudence say?
In Paulo Viana Dentistry v. Kapoor, et al, 2017 ONSC 4312 (CanLII), Justice Grace stated that Rule 76 Simplified Procedure may be used in any action (even when it is not mandatory) subject to limited and inapplicable exceptions (Rules 76.02(3) through (7) and 76.01(1)). The Court noted that there is nothing in the rule which prevents a plaintiff from having resort to the Simplified Procedure because the relief sought includes something beyond the three things Rule 76.02(1) specifically mentions, namely money, real property, and personal property:
“[12] Sometimes the rule 76 simplified procedure is mandatory: rules 76.02(1) and (2.1). This is not one of those situations. Even where not required, the procedure may be used in any other action subject to limited and inapplicable exceptions: rules 76.02(3) through (7) and 76.01(1).
[13] Initially counsel for the Kapoor defendants objected to the utilization of the Simplified Procedure because the plaintiff asks the Court to grant an injunction.
…
[15] There is nothing in the rule which prevents a plaintiff from having resort to the simplified procedure because the relief sought includes something beyond the three things rule 76.02(1) specifically mentions: money, real property, and personal property.
[16] The direction rule 1.04(1) contains warrants mention. It requires that: These rules…be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits.
…
[18] While best suited to less complex matters, the simplified procedure is not confined to them. In fact, currently jury notices may be served in rule 76 actions. Conceptually, I am not aware of any reason why the simplified procedure cannot be invoked simply because an injunction is sought. No authority limiting the operation of the rule in such circumstances was produced.”
In State Farm v. Ramalingam, [2009] O.J. No. 5971 (ONSC), Justice Salmers ruled that the summary simplified procedure rules may be used even for actions which include declaratory relief:
“[20] The last issue and request of the plaintiff on this motion is whether to order summary trial. Under rule 76.02, I agree with plaintiff’s counsel submissions that the summary simplified procedure rules may be used even for actions which include declaratory relief. For this case, it does seem that summary trial may be appropriate for the trial. However, based on the evidence before me, I am not satisfied, that at this time, I have sufficient details before me about what is necessary in order to conduct the trial of this action. Therefore, at this time I am not prepared to order a summary trial. Instead, I prefer to leave the decision about the mode of trial to the pre-trial judge as is provided in rule 76.10(6) and (7).”
More recently, in Sapex Canada Inc. v. 2264233 Ontario Inc., 2022 ONSC 187 (CanLII), the defendants argued that the wording of Rule 76.02(1) specifically limits the jurisdiction of the Court to matters involving money, real property, and personal property. The defendants maintained that if the plaintiff sought alternate relief (an injunction in this case), the action must proceed through the ordinary procedure. The Court rejected the defendants’ position. The Court held that the use of Simplified Procedure is mandatory in cases where the claim is below $200,000 and the claim is exclusively for money, real property, and personal property. However, a plaintiff has the option of bringing a claim under the Simplified Procedure in any case, subject to subrules (4) to (9) and subject to the defendant objecting:
“[21] Rule 76.02(1) requires that the Simplified Procedure be used if the claim is below $200,000 and the claim is exclusively for money, real property, and personal property.
[22] While the use of Simplified Procedure is mandatory in these cases, a plaintiff has the option of bringing a claim under the Simplified Procedure in any case, even if the value of the plaintiff’s claim is higher than $200,000 – subject to the defendant objecting.
…
[24] According to the Defendants, the wording of Rule 76.02(1) specifically limits the jurisdiction of the Court to matters involving “money, real property, and personal property.” If the plaintiff seeks alternate relief like an injunction, as in this case, the Defendants maintain that the action must proceed by way of the ordinary procedure.”
Justice De Sa disagreed with the defendant’s argument that the Court lacked jurisdiction to grant an injunction in a matter proceeding by way of the Simplified Procedure. The Court noted that Rule 76.01(2) provides that the rules that apply to an action also apply to an action proceeding under Rule 76 (unless this Rule provides otherwise). Aside from the exclusions in the Rules, Simplified Procedure remains available for other matters. The Court noted that Rule 76.02(3) specifically provides that Simplified Procedure may be used in any other action at the option of the plaintiff, subject to subrules (4) to (9):
“[27] I disagree with the Defendants that this Court lacks the jurisdiction under the rules to grant an injunction in a matter proceeding by way of the Simplified Procedure.
…
[31] I also disagree that the main action must be removed from the Simplified Procedure when ancillary relief like an injunction is sought.
[32] Indeed, requiring the parties to move the main action over to the ordinary procedure whenever injunctive relief is requested would not only waste judicial resources and be a source of inefficiency but would have the effect of actively discouraging the public from utilizing the Simplified Procedure process, contrary to the intent of the legislature which increased the monetary limit to apply to claims up to $200,000.
[33] Regardless, even if the provision were interpreted in the way suggested by the Defendants, it would not limit this Court’s jurisdiction to grant injunctive relief where warranted. The rules are to be liberally construed to secure the just, most expeditious and least expensive determination of every civil proceeding on its merits. Rule 1.04 of the Rules of Civil Procedure.”
Conclusion
It is difficult to envision a scenario where the Court does not award a declaration for an LTD case proceeding by Simplified Rules.
Conversely, if a Court does not award a declaration, for example, it would create a situation where an insured in an LTD case goes to trial, and the Court may find the insured to be totally disabled and therefore entitled to past benefits owed to the date of trial.
However, after paying the past benefits awarded by the Court, the insurer then terminates the insured’s LTD benefits, directly and indirectly stating that while the Court found the insured disabled as of the trial date, the Court did not declare the insured disabled beyond the trial date.
This speaks to bad faith, and again, it is difficult to envision an insurer putting themselves in this predicament despite how unreasonable their conduct appears at times.
Nonetheless, whether a lawyer decides to start a lawsuit in Simplified Rules for an LTD case will come down to the lawyer’s evaluation of the case, which should occur at the file’s inception.
Lawyers should request a copy of the LTD file, including the policy itself (not just the Benefits Booklet), and thoroughly review it. Lawyers should determine the maximum benefit period and if the client is not approved for the Canadian Pension Plan Disability, contact Service Canada to ascertain the approximate benefit amount if approved and review the case manager’s claim notes.
Depending on what the lawyer finds, and notwithstanding the claim’s value, is three hours sufficient for the lawyer to examine the case manager under Simplified Rules, which is the maximum length of examination Simplified Rules allows? While the answers to these questions will assist the lawyer in their determination, it cannot be overstated that the lawyer needs to start these steps early and continue to re-evaluate the value of the lawsuit.
If you are looking for assistance navigating your long-term disability insurance claim after it has been denied or terminated, Roger R. Foisy & Associates can help. Contact us for a free consultation to find out how we can help.