Differences Between Canadian and US Litigation

Our news and entertainment media are full of depictions of litigation set in the United States.  There are some critical differences between Canadian litigation and US litigation that people should be aware of.

First, in most business disputes the party who is not successful generally has some liability or obligation to pay a portion of the expenses of the winning party.  In contrast, in the United States, generally speaking, the losing party has no liability whatsoever for the costs, including legal fees, of the winning party.  This makes it much more attractive in the US for Plaintiffs to advance more speculative cases in Canada.

There are some important qualifications that are required.  First, the losing party is rarely required to reimburse 100% of the winning party’s costs.  The range of reimbursement typically ranges from about 40% -80%, but only for matters that have gone through all the way to trial.  There is relatively little compensation for the earliest steps in a dispute, for example, the research and preparation of the initial Court documents, such as a Statement of Claim and Statement of Defence, that get the ball rolling.  Parties can resolve certain preliminary matters such as productions of certain documents and the appropriateness of certain things in the pleadings by way of motions (arguments in front of, and decisions by the Court, prior to the trial).  Again, the successful party in a motion can claim a portion of its cost from the unsuccessful party in a motion, but typically the amount awarded by a Court to the successful party in a motion will only be a fraction of the successful party’s actual cost.

In Canada, most business or commercial disputes are heard by a judge sitting alone.  In other words, the trial does not occur in front of a jury.  As such, there is a general perception that broad-based appeals to justice or fairness are likely to be less successful in Canada.  In other words, in Canada, success depends much more on the facts and how they pertain to the applicable law.

Another critical difference between Canadian litigation and US occurs in the pre-trial discovery process.  In Canada, there is an obligation to produce relevant documents and parties have the opportunity to examine individuals who are parties to the litigation or a single corporate representative of a corporate or organizational Defendant.  This is a significant contrast to the US, where pre-trial discovery can range across many, many witnesses.  In complex matters, it is generally thought that pre-trial discoveries in the US cost five to ten times more than they do in Canada.