From the Vault: CLIA Loss Prevention Bulletin issue No. 38

For over ten years, CLIA produced more than 70 articles for our Loss Prevention Bulletin. While discontinued in 2016, the advice shared in some of these articles is timeless and still of value. We’re curating those articles to bring you our ‘From the Vault’ series. The articles below are #159 and #161 from No. 38 (Fall 2006).

Bulletin #159 The Rules of Non-Engagement

A client approaches a lawyer about a personal injury claim. During the first meeting, the client gives the lawyer a copy of the motor vehicle accident report and nothing more. The lawyer never receives any further details from the client and therefore assumes that the client is not interested in pursuing the claim. There is no further contact with the client until after expiry of the two-year limitation period when the client complains that the claim for damages for the injuries sustained in the accident has been lost because the lawyer did not file the statement of claim. The client further complains that the lawyer never returned calls inquiring about the status of the claim. The lawyer’s file doesn’t contain any meeting notes, correspondence or retainer agreement.

This is a common enough scenario. A client makes inquiries about a possible claim and fails to follow up further. The lawyer is not retained and does not take any steps to follow up on the initial meeting.

How could this lawyer have better protected themselves against the ensuing claim by the client? Where a lawyer has been consulted but not retained by a client, the best loss prevention advice is to follow up on the initial meeting with a letter confirming the meeting and advising that if the client is serious about pursuing the claim, they will need to sign a retainer agreement. Furthermore, the letter should state that if the client does not respond within a specific time period, there is no solicitor-client relationship.

A similar situation can occur where the lawyer is consulted on a claim and decides not to represent the client, for whatever reason. In this case the lawyer should follow up by writing a non-engagement letter. A non-engagement letter should explicitly:

• state that no solicitor-client relationship exists;

• warn that there are applicable limitation periods for the claim (but not set out what these are); and

• recommend that the individual consult and retain another lawyer immediately.

Bulleting #161 Pitfalls of Interjurisdictional Practice

A lawyer was retained by the parents of a promising young person who had been seriously injured while visiting another province. The lawyer waited until the young person’s medical condition had stabilized before drafting and filing the statement of claim in the other province. It was only then that the lawyer learned that the province where the tort had occurred had a different limitation period than the lawyer’s home province and that the limitation date for bringing an action had been missed. The lawyer immediately put their insurer on notice. The insurer retained counsel in the other province who attempted, unsuccessfully, to extend the limitation period. The heavily insured, negligent tortfeasor was off the hook and the lawyer, unfortunately, was on it.

What is the moral of this story? The claim could have easily been avoided with the early retainer of an agent in the other province or some thorough initial research into limitations and procedures in that province.

The other unfortunate aspect to this claim was that the promising young person’s injuries were horrific and the damages easily exceeded the lawyer’s mandatory minimum $1 million of insurance coverage. The lawyer had not purchased excess insurance and therefore was personally liable for a significant amount of money.

Some lessons from this tale:

• When you are retained to deal with a claim in another province, consider retaining an agent in the other jurisdiction to advise and assist you.

• Check (and double-check) the local rules of procedure and applicable statutes, including limitation periods and then confirm your understanding and interpretation of the rules and procedures with a local practitioner or where appropriate, the local court office – never assume that rules that appear to be the same as those in your home jurisdiction will be interpreted or applied in the same way in another jurisdiction.

• Seriously consider purchasing excess insurance beyond the minimum required by your law society.