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Chapter 2

LAW 122 Chapter Notes - Chapter 2: Appellate Court, General Idea, Liability Insurance


Department
Law and Business
Course Code
LAW 122
Professor
Brad Mac Master
Chapter
2

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Chapter 2: Litigation and Alternative Dispute Resolution
We will continue to focus on risk mgt – how a person can reduce their risks that are associated with
litigations.
oLitigation: is the system of resolving disputes in court.
THE LITIGATION PROCESS
Who Can Sue and Be Sued?
As a general rule, every adult is free to use the Canadian courts, whether or not they are Canadian
citizens.
For e.g. it is possible for an American consumer to sue a Canadian comp. for delivering
shoddy goods.
The situation is more complicated with org. A corporation is classified as a person; therefore
a company can sue or be sued. In contrast, an un-incorporated organization, i.e. a church,
are not classified a person, thus cannot sue/ be sue. Rather one can sue the individual
members of these org.
Class Actions
It is sometimes too much trouble or too costly for an individual like yourself to sue an org. For e.g.
Consumer Gas Company sold natural gas to business and homeowners in Ontario. As a part of a
pricing scheme, they imposed a 5% penalty on bills paid late. The late payment penalty was contrary
to the Criminal Code. However, for most ppl, it was not worth the fight, and easier to pay the late fee
(about $25). But b/c there were 500,000 ppl, they collected as much as $150 million.
oClass Action: allows a single person or a small group of people, to sue on behalf of a larger group
of claimants.
An individual, Gordon Garland, although only paying $75 in late payment penalties, was able to hold
the corp. accountable via a class action.
7 provinces have legislations dealing with class actions. Although the details vary from place to place,
the general idea is the same.
Common issues: There must be common issues amongst the various members of the class.
E.g. they may all be women who received defective implants for the same manufacturer.
Representative Plaintiff: The plaintiff must qualify as a representative plaintiff. He/she mush
demonstrate the interest of the class members
Notification: A representative plaintiff must also have a workable plan for notifying potential
class members. E.g. Reporting the Class Action lawsuit in newspapers or magazines.
Preferable procedures: The courts must be convinced that a class action is the preferable
procedure for dealing with the claims. E.g. determining whether a class action will be too
complicated or whether there are enough similarities b/t the members.
Certification: represents the court’s decision to allow the various claims to be joined together
& proceed as a class action. Usually the most important step in the entire process.
Legal Representation
Assuming that you want to sue, or that you have been sued, you need to make a decision regarding
your legal representation.
Self-Representation
You have the right to represent yourself. You can go into a court and argue your case b4 the judge,
even if you are not a lawyer. (e.g. Judge Judy) However, litigations are very complicated, while it may
be expensive to hire a lawyer, it may be far more expensive to lose a lawsuit b/c you lack the
experience.
Lawyers
Hiring a lawyer obviously does not guarantee success, but it does provide you with competent help
and it may increase your likelihood of success. A person cannot act as a lawyer until he/she
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Chapter 2: Litigation and Alternative Dispute Resolution
graduates from law school, completed an apprentice period known as “period of articles”, and passed
the bar.
The Law Society requires lawyers to hold professional liability insurance. If your lawyer acts
carelessly, and you suffer a loss as a result, you may sue your lawyer for negligence. The Law
Society also created the assurance funds.
oProfessional Liability Insurance: allows a client to receive compensation from the lawyer’s
insurance company if the lawyer acts carelessly.
oAssurance Funds: provides compensation to people who are hurt by dishonest lawyers
Paralegals
Depending on the circumstance, you may want to hire a paralegal instead of a lawyer. Paralegals are
an important part of the CAN legal system.
oParalegal: is a person who is not a lawyer, but who provides legal advice and services.
Although a vast majority of paralegals are knowledgeable, professional, and honest, paralegals
remain somewhat controversial. In contrast to lawyers:
i. Don’t always have formal legal education
ii. Are not regulated and controlled by a governing body
iii. Are not subject to mandatory codes of conduct
iv. Are not required to carry liability insurance
v. Cannot have their bills reviewed by the courthouse officials
vi. Are not covered by the blanket privilege that applies b/t lawyers & clients.
Pleadings
oPleadings: are the documents that are used to identify the issues and clarify the nature of the
dispute. Some are prepared by plaintiffs, while others come from the defendant.
oPlaintiff: is the person who makes the complaint.
oDefendant: is the person about whom the complaint is being made.
It is important to start the pleading process promptly. Most types of claims are subjected to limitation
periods.
oLimitation Period: is a period of time within which an action must be started.
There details vary depending on the claim and the jurisdiction in which the claim is brought.
Canadian limitation statutes traditionally drew a distinction b/t claims in contract (has to be
commenced within 6 yrs) & claims in tort (has to be commenced within 2yrs). In recent years,
however, in an attempt to simplify the system, most claims must be started within 2yrs from
the day which the plaintiff discovered, or should of discovered the cause of action.
Depending on the circumstances, the relevant period may vary from days to decades. For
e.g. you must act very quickly if you want to sue a municipality or the Crown.
It may be harsh that a limitation period could prevent a plaintiff from pursuing an otherwise
valid claim against the defendant. Limitation periods are however, necessary for at least two
reasons.
oAfter time memories fade and evidence is lost
oIt is unfair to have a claim permanently hanging over a person’s head.
oStatement of Claim: is a document in which the plaintiff outlines the nature of the complaint. It states
the facts that the plaintiff intends to reply upon and the remedy that it wants to receive. Like all
pleadings, it must be issued by the courts and served on the other party.
oStatement of Defence: is a document in which the defendant sets out its version of the facts &
indicates how it intends to deny the claim.
Depending on the circumstance, the defendant may also include a counterclaim along with
the statement of defence.
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