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Law and Business
LAW 122
Else Grech

1Chapter 2Litigation and Alternative Dispute Resolution This handout was adapted from Chapter 2 in McInnes et al Managing the Law The Legal Aspects of Doing Business 3rd edition Toronto Pearson Canada 2011 The Litigation Process Who Can Sue and Be Sued Who has access to the courts in OntarioWho can be sued in an Ontario courtAll adults regardless of their citizenshipCorporations even if they are incorporated outside of OntarioRemember that the law treats corporations as legal persons for some purposesTrade unionsSpecial cases o Children children can sue and be sued but they must be represented by a parent or litigation guardian o Adults suffering from a mental incapacity eg dementia or Alzheimers they can sue and be sued but they must be represented by a litigation guardian Unincorporated organizations such as clubs amateur teams and community groups are generally not recognized in law as personsThus these organizations cannot sue or be sued as an organizationIf you want to sue a club you must sue individual members of the clubIf members of a club wish to pursue legal action against another party they must bring their legal action as individualsThey cannot sue in the name of the club or organizationTrade unions however are an important exception to this rule Historically it was not possible to sue the governmentHowever legislation has now made it possible to sue the government under some circumstancesThe person who initiates a law suit is called the plaintiffThe person being sued is called the defendant The law suit as a whole is frequently called the action 1The Litigation Process Class Actions Case 1 Why do we have class actionsGeorge v Shark LoansWhen Georges car unexpectedly broke down he needed a loan to cover the repair costsBecause he had bad credit George went to Shark Loans a company that makes relatively small loans to people who are considered bad credit risksShark Loans not only charges high interest1 The Canadian Bar Association maintains a database of class actions initiated throughout CanadaSee httpwwwcbaorgClassActionsmaingateindex to explore what types of class actions have been brought in Canada 12rates but it also imposes a major penalty for any late paymentsGeorge was charged a 75 late penalty when he paid an instalment on the loan three days lateGeorge wondered if charging this late penalty was legal so he asked his friend Wendy who is a lawyer for adviceWendy did some quick calculations reviewed the case law and then told George that the late penalty very likely violated the criminal interest rate provisions in the Criminal CodeShe told George that he could sue Shark Loans to get the late penalty back but that he would have a hard time finding a lawyer who would take a case worth 75 Even if George represented himself the cost of the filing fees and the time wasted on pursuing the matter would be far more than 75At first George was content to let the matter goBut as he thought about it he started to become angryHow many other people were stuck paying this late penaltyShark Loans was breaking the lawand profiting from itShark Loans knew that hardly anyone would bother to challenge the late penalty in court it simply would not be worth the time and moneyAt the same time George estimated that Shark Loans could be making up to 7 million from the collection of the late penaltiesSomething had to be doneGeorge went back to his friend Wendy for more adviceYou see if it is just me then the law suit is only worth 75But what if there were 100000 people in my positionOr even 250000 peopleShark Loans is a pretty big company it has locations all over OntarioShark Loans claims that it has given over 400000 loansSo what would Shark Loans do if we all sued the company all at onceand all togetherIs that possibleWendy thought about the matter and replied You would need a class actionYou would ask the court for permission to join all the claims against Shark Bank in one proceeding with a representative plaintiffYou wouldnt sue for 75You would sue for 7 millionthe value of all the claims combinedSince the claims are all very similar it makes sense for the court to hear one or two cases and apply its decision from those cases to the rest of the casesIts a better use of the courts limited resources to decide these cases altogether than to hear very similar claims separatelyGeorge smiledShark Loans might not care about 75 claims but a 7 million claim will get its attentionWhat are the benefits of class actions In this Case who would be the plaintiff and who would be the defendant if George decides to sue Shark LoansIn Case 1 George is contemplating bring a class action against Shark LoansA class action allows a single person like George or a small group of people to bring a legal claim on behalf of a larger group of peopleThe class is the group of people on whose behalf the legal claim is 2
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