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LAWPRO staff actively pursue recovery costs throughout the year. In some cases, a party other than the insured is found liable for all or part of a loss that is the subject of a claim. We take all reasonable steps to obtain reimbursement from these parties, no matter the amount, because the recovery of these costs reduces our claims expenditure. In 2013, LAWPRO was successful in recovering over $1.6 million in costs.

Repairs: Keeping rights of action alive keeps claim costs down

When assessing newly reported claims, LAWPRO carefully considers the potential for a repair to avoid or extinguish a claim, or at least to reduce any damages created by the lawyer’s error. Many of the claims that LAWPRO handles involve an error that can be repaired. These repairs are important to LAWPRO’s bottom line as they help reduce the cost of claims.

In the litigation area, a repair often involves reviving or preserving a client’s right of action. This article highlights some of our successful litigation repairs from 2013. They involved 1) restoring actions to the trial list; 2) dealing with limitation periods; and 3) amending pleadings.

Restoring actions to the trial list

Test for restoring actions to trial list confirmed

In a 2013 case, the Court of Appeal confirmed the appropriate test for restoring actions to the trial list. It’s a two-part, conjunctive test: the plaintiff bears the burden of demonstrating that there is an acceptable explanation for the delay in the litigation; AND that, if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice.

Fairness will allow reinstatement in the absence of prejudice

A plaintiff brought a multi-million dollar lawsuit against a financial services company, alleging that it gave her negligent investment advice. The action was set down for trial, but later struck off the trial list due to the inaction of the plaintiff’s first lawyer. She retained a second lawyer, who delayed in moving to have the action restored to the trial list. When the second lawyer eventually did bring the motion, Master Graham dismissed both the motion and the underlying action.

Newbould, J. set aside Master Graham’s orders, and held that in considering whether to restore an action to the trial list under Rule 48.11, Rule 48.14(13) should be applied flexibly. The court must consider, above all, whether it would be fair to dismiss the action.

In the context of this case, the court noted that:

  • There was sufficient explanation for the delay, where the plaintiff always intended to proceed and instructed her lawyers to do so. Neither the plaintiff nor her solicitors intentionally delayed the matter.
  • The delay was understandable, where the solicitor encountered personal problems, and therefore failed to deal with the file.
  • The expiry of a limitation period ought not to be relevant to the issue of presumed prejudice, especially now that the limitation period is two years.
  • The defendant ought to adduce affirmative evidence of prejudice, because there are limits to a plaintiff ’s ability to speculate about what prejudice the delay may have caused the defendant. In this case, there had been extensive discoveries and documentary evidence, and no suggestion that defence witnesses were unavailable and could not refresh their memories with the available documents. The plaintiff demonstrated that if the action were allowed to proceed, the defendant would suffer no non-compensable prejudice.
  • The law will not ordinarily allow innocent clients to suffer the irrevocable loss of their actions because of the inadvertence of their solicitors. The fact that there is an outstanding solicitors’ negligence action ought not to be relevant. In any event, the potential value of the claim greatly exceeded the solicitors’ E & O policy limits.

Court can consider entire history of delay

Justice Firestone found that there was a “satisfactory explanation for the delay,” where the claim arose in 2006, and the 48.11 motion was brought in late 2011.3

Justice Firestone held that:

  • From the time this action was commenced (2007) right up until the pre-trial (2008), it proceeded without delay.
  • At the pre-trial, the matter was struck from the trial list so that additional parties could be pursued.
  • The registrar did not serve the parties with a status notice. Such notice might have alerted plaintiff’s counsel to take steps to restore the action to the trial list much earlier than he did.
  • Through inadvertence, this case fell out of the plaintiff ’s counsel’s diary.
  • Defence counsel never brought a motion under Rule 24 to dismiss this action for delay.
  • It is open to the court to consider the entire history of delay. The defendants participated in documentary disclosure, examinations for discovery, mediation, and a pre-trial. The interests of justice required that this action be restored to the trial list, BUT the plaintiff was disentitled to pre-judgment interest from the date the action was struck from the trial list, until the date of the judgment.

Limitations

LAWPRO considers motions which contest that actions are statute barred to be “repair” motions, because a negligence claim is averted if a court finds that the plaintiff ’s action is not statute barred.

Where contract repudiation not accepted, limitation period runs from date of performance failure

A plaintiff’s action was NOT statute barred where the plaintiff refused to accept the defendant’s position that it intended to pay a lesser rate of commission than that stipulated in the contract.4 Instead, the plaintiff continued to call upon the defendant to honour its bargain.

The plaintiff ’s action was brought more than two years after the defendant announced that it would not pay commission at the agreed-upon rate, but less than two years after the date at which the defendant was obliged to pay the commission.

Because the plaintiff refused to accept the defendant’s repudiation, the limitation period ran from the date on which the commission was payable.

No contracting out of Limitations Act, 2002 for consumer auto insurance contracts: Court of Appeal

The Court of Appeal held that where the plaintiff was injured in an accident in July, 2006, the limitation period for his claim against his OPCF 44R insurer was governed by ss. 4 and 5 of the Limitations Act, 2002, NOT the 12-month limitation period set out in para 17 of the OPCF 44R change form.5 Nor could the “discoverability” criteria used in para 17 be imported into s. 5 of the Limitations Act, 2002. The two-year limitation period provided by s. 4 of the in family law litigation. An alternative claim for a monetary award also shelters under the 10-year limitation period.

Ordinarily, the claim should be taken not to have been discovered until the parties have separated and there is no prospect of resumption of cohabitation.

In obiter dicta, the court said that a claim for a constructive trust over personal property is governed by the Limitations Act 2002.

Express written agreement not essential to toll action during mediation

In another case, the limitation period was suspended for 18 months pursuant to s. 11 of the Limitations Act 2002, where the parties agreed to mediate the claims arising from the collapse of a building. t was held that an express, written agreement was not essential.

Limitations Act, 2002 ran from the day after the plaintiff requested ayment from the insurer under the OPCF 44R endorsement.

The motion judge’s endorsements made it clear that the plaintiff was “consumer.” S. 22 of the Limitations Act 2002 therefore prohibited ny contracting-out of that statute. In any event, the accident ccurred before October, 2006. No contracting-out at all was ermitted before that date. The writer believes this analysis hould apply to uninsured/unidentified motorist claims.

Real Property

Limitations Act 10-year limitation period applies to constructive trusts in family law

A plaintiff ’s claim for a constructive trust on her ex-partner’s real property was NOT statute barred. The 10-year limitation period found in section 4 of the Real Property Limitations Act governs a claim for a remedial constructive trust on real property, brought in connection with an unjust enrichment claim

Amending pleadings

LAWPRO obtains amendment to preserve construction lien claim

LAWPRO counsel were successful, in another case, in salvaging a lien action even though the statement of claim did not claim enforcement of a lien, or mention the lien registered on title.8 Rather, it claimed damages for breach of contract, unjust enrichment, and quantum meruit. However, on the Court Information Form, “construction lien” was ticked off.

The defendants alleged that the statement of claim was ineffective to preserve the lien, and that the lien claim should be vacated. Whalen, J. dismissed the defendant’s motion, and ordered the plaintiff to deliver an amended statement of claim. The law requires a generous and liberal interpretation of the lien claimant’s pleading.

The plaintiff was attempting to perfect and preserve its lien. Many of the details in the statement of claim were the same as those underlying the registered lien claim − including the identification of the parties, the project, the roles of the parties in the project, the time frame of the work and the amount claimed.

Debra Rolph is director of research at LAWPRO.