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Chapter 2

Chapter 2

Law and Business
Course Code
LAW 122
Peter Wilson

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Chapter 2: Litigation and Alternative Dispute
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.
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
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.
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Chapter 2: Litigation and Alternative Dispute
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.
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 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
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.
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.
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