Canada is an interesting place for litigation for a number of reasons. For starters, it is one of the few countries in the world where both the common law and civil law systems are practiced. The province of Quebec follows the Napoleonic civil law system, whereas the rest of Canada follows the common law system. In addition, there are both federal and provincial court systems, and the jurisdiction of these courts depends on the subject matters. A few examples of some of the areas that fall within the federal jurisdiction are aboriginal rights, the administration of railroads, maritime law, banking, insolvency, immigration, aviation, and intellectual property matters. Federal law, along with the law in the provinces other than Quebec, is based on the common law. On the other hand, provincial courts have original general jurisdiction, including for civil claims, unless there is a specific provision of law assigning it exclusively to another court.

These are some of the general issues that make litigation and the legal systems interesting in Canada, but there are also specific aspects of litigation that are worth noting. Below is a list of six points of interest with respect to litigation in Canada, particularly for those on the outside looking in.


In Canada, the losing party must pay the winning party’s legal costs. Most provinces have books of tariffs which contain a detailed list of legal fees for specific acts. For example, a pre-trial discovery conducted by the winning party would cost the losing party a set dollar amount. Obviously, the further along in the proceedings and the more activity there has been in a file, the higher the costs for the losing party. The tariffs set what appear to be arbitrary amounts and are not tied to the actual fees incurred by the parties. For example, a party may be awarded $1,200 in costs on a motion in Ontario according to the tariff, but have actually paid its attorneys $10,000. In the province of Quebec, in addition to the loser paying all judicial costs, section 42 of its Tariff of Judicial Fees states that in a suit where the value of the dispute is over $100,000, an additional fee of 1% on the amount exceeding $100,000 shall be taxable. A party wishing to sue, therefore, will think twice before inflating their claim.

In the province of Ontario, a party who unsuccessfully seeks summary judgment can be sanctioned with substantial indemnity costs if the court feels the motion was unreasonable, dilatory or that the party presenting the motion acted in bad faith (see Rule 20.06 of theRules of Civil Procedure). Similar rules exist in the provinces of New Brunswick and Prince Edward Island and the territories of Nunavut and the Northwest Territories.

These mechanisms have been developed in large part to discourage parties from instituting frivolous or abusive claims. By doing so, parties run the risk of incurring costs themselves, which is obviously a disincentive to instituting a baseless claim. The flipside to this, however, is that parties who have a legitimate claim may choose not to institute proceedings for fear of being saddled with a hefty cost sanction.


In the last several years, many provinces have adopted new procedural rules with respect to proportionality in order to ensure that parties choose proceedings that are proportionate in terms of the time and cost required with respect to the importance and complexity of the issues, as well as to the amount being claimed.

For example, in the province of Ontario, Rule 1.04 (1.1) of the Rules of Civil Procedure provides for the following: “In applying these rules, the court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and to the amount involved, in the proceeding”.

The province of Quebec puts more of a burden on the parties themselves with respect to proportionality, and at Article 4.2 of the Code of Civil Procedure states: “In any proceeding, the parties must ensure that the proceedings they choose are proportionate, in terms of the costs and time required, to the nature and ultimate purpose of the action or application and to the complexity of the dispute [.]”

These new rules attempt to avoid excessive or abusive proceedings that would, for example, end up costing more than the amount being claimed. This has led, in recent years, to many discussions surrounding the meaning of proportionality.


In Canada, there is not as much leeway as in certain other jurisdictions during discoveries. Pre-trial discoveries cannot be used as “fishing expeditions” to gather any and all information possible. Rather, they are limited in breadth and scope to matters relevant to the claim as framed in the litigation at the stage at which the discovery takes place.

Subject to exclusions for actions in which the amount claimed is below a certain threshold, there is an automatic right to examine parties to the claim or a representative of a corporate party. In order to examine third parties, however, permission must be obtained from the court. In certain provinces, witnesses may also refuse to answer questions they deem irrelevant to the proceedings, and the court eventually decides whether the question is of enough relevance to be answered. Witnesses may also be asked to later provide information or documentation, and they take these on as future undertakings, which they have to produce in a certain, usually agreed upon, amount of time.

Another interesting aspect of discoveries in Canada is that there is an implied rule of confidentiality. This rule prohibits a party from using in another claim any of the information obtained during a discovery in one proceeding. This implied rule of confidentiality at an examination on discovery was confirmed in a Supreme Court of Canada decision2, and has now been adopted by many of the provinces. Certain provinces, like Ontario, also have an express rule of confidentiality.


A Plaintiff may ask a court’s permission to seize a Defendant’s property before judgment when there is reason to believe that the Defendant may do something with the property that will make the recovery of the debt impossible. In Quebec, this is referred to as a seizure before judgment (Article 733, Code of Civil Procedure). Such a request needs to be based on an objective fear, not just a mere suspicion, that something might happen to the property. The province of Quebec also allows a Plaintiff to seize before judgment any movable property which he has a right to revendicate as owner (see Article 734 (1), Code of Civil Procedure).

In Ontario and other common law provinces, the closest proceeding to a seizure before judgment is a Mareva injunction. In addition to the real and substantial risk that the property will be alienated or otherwise made unrecoverable, a Plaintiff asking for this kind of injunction must have a prima facie good case (Ontario) or even have an almost certain chance of success at trial (British Columbia). A Mareva injunction differs from a seizure before judgment in that it is not a court order to have a third party (i.e. a court appointed guardian) take control of a Defendant’s property, rather it is an order prohibiting a Defendant (or a third party) from dealing in the Defendant’s assets.

Mareva injunctions are interesting in that they can have an extra-territorial reach. Because it has become easy for Defendants to transfer funds or other property to other countries, Canadian courts have attempted to give these injunctions application outside of Canada. This type of Mareva injunction is known as a “Worldwide Mareva” or a “Mareva in aid”.3 The jurisdictional theory behind a Worldwide Mareva is, in simplified terms, that if a court in Canada has legitimate jurisdiction over a Defendant, then it has equal jurisdiction over that party’s assets, even if they are in a foreign country.

Obviously, when ordering a seizure before judgment or a Mareva injunction, courts have to strike a delicate balance between protecting a Plaintiff’s ability to recover property and the rights of the Defendant to keep his property.  


Though a statement of claim or a motion to institute proceedings is the document that formally begins any lawsuit in Canada, the subsequent timetable of proceedings and the procedural route to trial vary from province to province.

In Quebec, once a Motion to Institute Proceedings has been served, a Plaintiff must inscribe (meaning, to file in the Court’s record) a request for proof and hearing within 180 days from when it instituted the action, failing which the lawsuit is deemed to be discontinued. After the case has been inscribed, a trial date is then set by the court during what is called roll call. When a trial is heard will depend on the number of days it requires.

On the other hand, in Alberta, a party has up to two years in which to proceed, therefore a proceeding is really only as fast as the prosecuting lawyer wishes it to be. Except in certain circumstances (i.e. where the parties have expressly agreed to a longer delay) Rule 4.33 of the Rules of Court stipulates that substantive steps must be taken within those two years, failing which the other party may ask the court to dismiss the action.  

There are, however, certain mechanisms that allow for a “fast track” approach in certain proceedings.

For example, in Quebec, defences can sometimes be presented orally as opposed to in writing (see Article 110.1, Code of Civil Procedure). This shortens the delay in which parties will be heard and expedites a hearing date. Usually, an oral defence hearing will be heard a few months after the institution of proceedings, as opposed to several years later.

In Ontario, Rule 76 of the Rules of Civil Procedure allows for a simplified procedure, whereby documents required to be disclosed by the parties are only those relevant to the matter in issue; discoveries are only allowed in a very limited way; oral examinations are limited to two hours; and the deponent of any affidavit may be examined, but only for ten minutes. This simplified procedure is available for claims under $100,000 and that do not fall under the monetary jurisdiction of Small Claims Court.

Several of the other common law jurisdictions also have provisions for summary judgments, where a party can apply to a judge for a judgment on a specific issue in the claim or even generally. A summary judgment, by its very definition, is rendered more quickly than a regular judgment and thus expedites the process.


Unless a foreign judgment is against public order, Canadian courts have consistently shown that under the right circumstances, they are willing to recognize judgments emanating from foreign courts or tribunals, including foreign insolvency judgments. The Civil Code of Québec has an entire section dedicated to the recognition and enforcement of foreign decisions (see Article 3155 and following.) It is not a question, however, of “rubber-stamping” a foreign judgment. In bankruptcy matters, Canadian courts have discretion to look at each case and the surrounding circumstances and, applying criteria set out by the Supreme Court of Canada, decide whether it they will choose to enforce a foreign bankruptcy court order. A Canadian court, of course, is not in any way compelled from enforcing foreign judgments.

The Companies’ Creditors Arrangement Act (Canada) and the Bankruptcy and Insolvency Act, the two main statutes dealing with insolvency in Canada, have also been amended in the last fifteen years to develop a statutory framework for the recognition of cross-border insolvencies.

Of course, Canada has also entered into conventions with some countries for the recognition and execution of judicial decisions in civil and commercial matters, such as France and the United Kingdom.


Canadians are not a litigious group of people. Better put, legislators in Canada have attempted to ensure that litigation is not abused and that the judicial process is as streamlined and efficient as possible. Obviously, in an increasingly complex and global commercial world, these are prized goals which take effort to achieve, particularly when trying to balance the rights of all parties potentially involved in a claim.

In summary, Canada provides an innovative and dynamic judicial system, incorporating and reflecting many of its legal traditions. As a result of this hybrid legal history, it looks to problems with a creative and open mind and welcomes perspectives that are, at their base, concordant with Canadian traditions and values. Foreign counsel with disputes that have a link to Canada might very well find litigation in our system a pleasant surprise.