Our case this month is a Court of Appeal case from England addressing allegations of fraud against a plaintiff in a motor vehicle accident case. Evidence in the form of video tapes surfaced after trial was over and damages had been awarded, showing that the Plaintiff was not disabled, as he had alleged before the courts. The impact of this case may have far-reaching effects, particularly for the Canadian insurance industry.
Out With Small Claims Court: Changes to the New Brunswick Rules of Court
During the 2008– 2009 budget, the New Brunswick provincial government announced that the current Small Claims Act would be done away with, and replaced with a new system, which would be outlined in the New Brunswick Rules of Court as Rule 80. Under the proposed new Rule, all small claims will be heard in the New Brunswick Court of Queens Bench by a Judge rather than an Adjudicator. The limit for the monetary value of the claims, which presently stands at $6,000, will be increased to $30,000. This will cover a drastically larger number of claims than the prior system encompassed. Correspondingly, the lower monetary limits applicable for Rule 79 Simplified Procedure, which presently applies to all claims under $50,000, will now apply to claims for damages between $30,000 and $75,000.
The Pros and Cons
One of the major differences under the new Rule 80 pertains to costs – costs under the present Small Claims Act are quite limited, and the maximum costs which can be awarded is $500. Under the new Rule, costs are fixed according to Rule 59, and therefore have the potential to be significantly higher than would have been awarded under the old Small Claims Act. On the other hand, for claims between $50,000 and $75,000, which presently are handled through the regular court system, but will fall under the amended Rule 79 in the future, the cost of litigating should be significantly less thanks to the stream-lined procedures and shortened time lines.
Another significant change from the previous Small Claims Act to the new Rule 80 is the admissibility of evidence and the procedure for entering evidence. Under section 10 of the present Act, the only limiting factor is relevance – any document or oral testimony can be received, as long as it is relevant. No notice of witnesses or evidence is necessary. The new Rule requires that parties must file a list of witnesses with the Clerk, as well as copies of all documentary evidence to be presented or relied upon at the hearing at least 20 days before the date of the hearing. Absent notice to the Clerk in accordance with the rule, the parties cannot enter evidence or call witnesses. It will be interesting to see how stringent judges are in implementing this rule, particularly given that Small Claims litigants are often self-represented and have limited knowledge of the applicable rules.
The effect of these new changes may be to limit the number of claimants who choose to represent themselves. For the layperson who knows nothing of courtroom practice and procedure, arguing before a judge will undoubtedly be a much more intimidating and daunting task than arguing before an adjudicator. Furthermore, a layperson may not know to file the necessary documents and notices on time. The new Rule is unquestionably less friendly to the unsophisticated self-represented litigant, and a corollary to the new Rule may well be to discourage claims for small amounts which otherwise would have been pursued through the Small Claims Courts. Many actions under $6,000 which would have proceeded under the old Act will be deemed unworthy of pursuing as a result of the cost of hiring counsel and the potential costs that could be awarded against an unsuccessful litigant.
However, despite the drawbacks to the new Rule, there are arguably benefits as well. Claims which would have previously fallen under Rule 79, but which will now covered by Rule 80 may be heard more expeditiously, and will no longer be subject to the same procedural requirements of Rule 79. The effect of increasing the upper monetary limit on Rule 79 claims will be to allow even more actions to proceed in a more efficient and expeditious manner, and pre-trial procedural requirements such as lengthy Examination for Discovery will be avoided. Rule 79 reduces the cost of litigating claims by “fast-tracking” litigation through streamlined pre-trial procedures and imposes time limits intended to keep the actions moving at a faster pace. By allowing more claims to proceed under these rules, the expectation is that the burden on the Courts will be reduced.
Impact on Insurance Litigation
The impact of the changes to Rule 79 and the imposition of Rule 80 will be significant for the Insurance industry. Particularly, it will expedite the resolution of minor motor vehicle accident claims falling below the $75,000 threshold. Further, with the imposition of the cap, many insurance claims for minor personal injury are falling below the $30,000 limit – in the future, these claims will be handled through the courts as “small claims”, and can be resolved relatively quickly. Many of the procedural requirements, which existed under the present system, will be done away with, making these claims significantly less expensive and time-consuming to resolve.
While the effect of the changes to the Rules of Court may be unfavorable to the unrepresented litigant and those seeking nominal damages, they will likely operate to the benefit of the Insurance industry.
Owens v. Noble  EWCA Civ 284
This decision is an appeal from the Royal Courts of Justice in Strand, London, addressing issues flowing from the decision to remit a matter in which a judgment was procured by fraud back to the trial judge for determination. On the application, it was held that the matter should be remitted to the trial judge who had presided over the initial matter; the respondents raised a number of concerns relating to this decision.
The first issue raised was that the respondent felt that it was undesirable, as a matter of principle, that the trial judge should decide whether a fraud was perpetrated upon him. The respondent argued that in these circumstances, the judge would be in danger of acting in conflicting capacities, as both witness and as trier of fact. The respondent also raised the issue that there is a risk that the judge may appear to have pre-judged the issue of fraud. It was noted that upon hearing the initial matter, the judge reacted with surprise when shown video films of the claimant, and made a comment to the effect that he would not have expected that the claimant would be capable of the acts he had been seen doing on the tape.
These issues were addressed by the Court of Appeal in its decision. The Court found no conflict of interest inherent in the judge’s role in the matter, and held that the judge would decide the issues based on the evidence before him. The court further held that the trial judge was probably the person in the best position to hear the matter, as he would be in a far better position to make a comparison between the evidence and what presented at the original hearing, having been there himself. Moreover, the judge was fair in his decision regarding the original matter; there was no evidence to suggest that he would be incapable of considering the issue of fraud impartially. Finally, the court held that it is convenient and economical to send the issue back to the same tribunal unless there was good reason not to.
The conclusion reached by the court was that the issue of fraud should be remitted to the trial judge who presided over the initial matter if at all possible. The court determined that the initial issue of fraud was to be addressed separately and before re-assessing the damages awarded in the case. The court made no order as to costs, largely because the appellant’s reasons for appeal failed. The court determined that it would not be just to make the respondent pay the appellant’s costs of the appeal, even if he should be found guilty of fraud.