The latest amendments to the Alberta Rules of Court significantly change the obligations of both plaintiffs and defendants in the conduct of litigation. Changes to the timeline of document production in particular will affect institutional defendants, such as insurers and large corporations.
These amendments took effect on July 25th, 2013, and were highly publicized and discussed by stakeholders. Institutions frequently engaged in litigation, particularly as defendants, will be aware the Rules were significantly re-written for implementation in October 2010. Arguably, the amendments outlined below are some of the most significant changes to the Rules since then.
Dismissal for Delay
The Court has always had the power to dismiss an action if delay has been instituted by plaintiffs. Two forms of this power exist and both have now been amended.
In the general power of the Court to dismiss for delay, described by Rule 4.31, frequent litigants will recognize the reinstitution of the 'inordinate and inexcusable' criteria, which existed in the pre-2010 Rules. As before, in order for the Court to dismiss an action it must hold that a party has suffered significant prejudice. In the 2010 formulation however, the Rule gave no guidance as to what constituted prejudice. Now the Rule includes a new subsection which presumes prejudice when delay has been 'inordinate and inexcusable'.
These terms in turn are not defined, but McLennan Ross is of the view that the inclusion of 'inordinate and inexcusable' will result in the Court being able to refer to cases relating to the same phrase in the pre-2010 Rules.
Drop Dead Rule
The Court's second power to dismiss for delay – popularly known as the "drop dead rule" has also been significantly amended after the Legislature introduced a moratorium on use of the section approximately a year ago.
In the 2010 rule, defendants could apply for dismissal if two years or more had passed without the plaintiff taking a step in the litigation. Members of various associations protested the time period was too short and the Court would be overrun with applications to dismiss, followed closely by a rush to the Law Society's insurers for dismissals obtained after poor management of files by lawyers.
Confusion also reigned because the Rule only applied two years or more "after the last thing done" in the litigation, and this concept was not defined elsewhere.
This Rule is now amended so an application may be brought only after three years has passed, and only when there has been no "significant advance" in the litigation. While 'significant advance' is itself not defined, likely it provides a more ascertainable foundation than "thing". McLennan Ross feels after a flurry of applications in the next one to three years, the term will likely be sufficiently defined by Alberta Courts that stability in knowledge will reign at the bar and among institutional litigants. As a final note, litigants should note a new provision in the drop dead rule: Subsection (3) now provides the calculation of the three years will not include a one year period after service of the Statement of Claim, nor will it include a year after a party proposes to other parties it would like to extend the period for advancing the litigation. In other words, if other parties propose an extension on any stage in the litigation, prudent defendants will respond with clear notice that no such extension will be given; the alternative is the qualification period for the new 'three year drop dead rule' will be extended by one year.
Document Production for Defendants
Currently, the 2010 Rules allows Plaintiffs and Third Parties to enjoy 90 days following the service of a Statement of Defence before providing an Affidavit of Records to other parties. Defendants under the old regime however only had 30 days, creating a disparity in the rights of parties. Plaintiffs have from the time the loss arose, plus 90 days after they receive a defence, to gather documents and produce; third parties have 90 days after their own defence is filed.
Defendants, conversely, have only one month after receiving the Plaintiff's documents to produce their own. In a worst case scenario, a Plaintiff wishing to compress time for Defendants could serve documents early and create an obligation for a defendant only a month after being served with the Statement of Claim. Moreover, a Defendant filing a Third Party Claim simultaneous with its defence is still required to produce documents within 30 days, but is unlikely to see a Third Party's defence prior to serving its own Affidavit of Records.
Under the new regime, a defendant's obligation to produce documents is now extended to two months after the service of its defence. In our view, a disparity still exists, but the additional time is welcomed.
Cross-Border Service of Documents
Under new amendments, Alberta Masters and Justices have the power to order that service is affected validly in foreign jurisdictions and the mere fact the Hague Convention were otherwise to apply does not invalidate that order.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
