When it comes to suing prior counsel for professional negligence, caselaw has shown us that timing is crucial. In Ontario, the Limitations Act, 2002 provides a standard two-year limitation period to bring a civil claim from the day the claim is “discovered”.^[i] This means that once a plaintiff has knowledge of a potential claim against their lawyer, they have two years to bring the suit to court. However, determining the timing of when a claim is discoverable is subject to a variety of factors.

The Framework: Discoverability and “Appropriate Means”

Under section 5 (1) of the Limitations Act, 2002, a claim is considered “discovered” the day on which the plaintiff knew or ought to have known^[ii]:

• That an injury, loss or damage occurred;
• That it was caused by an act or omission;
• That the act or omission was that of the defendant; and
• That a proceeding would be an appropriate means to seek a remedy.

Sheeraz v Kayani: A Turning Point

In the case Sheeraz v Kayani (2009), the defendant (former counsel of the plaintiff) argued that the plaintiff made their claim beyond the two-year limitation period and that the claim should be dismissed.^[iii] While the court held that this issue was best left to a trial judge, it established that the “nature of loss” in section 5 (1) of the Limitations Act includes both knowledge of the loss as well as the cause of the loss. Therefore, in addition to other factors, the limitation period for suing prior counsel only begins running when the plaintiff knows that their lawyer was responsible for the loss incurred.

Whether a plaintiff ought to have known that they have a potential claim against their lawyer is based on the “reasonable person test”. A reasonable person is defined as an individual “with the abilities and in the circumstances of the person with the claim”. In Sheeraz v Kayani, the court held that the circumstances of the case made it difficult for the plaintiff to have known that he had a potential suit against the defendant, as a solicitor-client relationship between them still existed, and the defendant was attempting to mitigate the loss he had caused. Thus, to determine whether it is “appropriate to sue”, courts must consider the plaintiff’s dependence on the defendant. Factors such as the plaintiff’s education and career were also assessed in whether he could judge if he had a potential claim.

The principles in Sheeraz were reiterated in Flue-Cured Tobacco Growers’ Marketing Board v Rothmans, Bensons & Hedges (2014), where it was held that a plaintiff must be able to identify who caused their loss for the limitation period to run.^[iv] Miletic v Jaksic (2014) also held that the relationship of dependence needs to be evaluated for discoverability.^[v]

It was clarified in Johnston v Studley (2014) that discovery does not depend upon the plaintiff knowing that his/her claim is likely to succeed, but rather “whether the prospective plaintiff knows enough facts to base a cause of action against the defendant”.^[vi] Thus, a limitation period begins to run as soon as a plaintiff is aware that a potential claim could be made against their counsel.

Alliance v Gardiner Roberts LLP: Clarity on “Appropriate Means”

In Alliance v Gardiner Roberts LLP (2020), the plaintiffs had remained clients of the defendant law firm even after experiencing the alleged professional negligence.^[vii] It was not until they had consulted a new law firm, that they were advised to sue their former lawyers. They brought their claim shortly after.

The Court ruled that the claim was not discoverable while the plaintiffs were still clients of the firm, and that the limitation period only began to run when they received independent legal advice that confirmed they had a potential claim.

Thus, this case solidified that the relationship of dependency will impact when a plaintiff knows that a civil suit is the appropriate means to seek a remedy.

The Importance of Limitation Periods

When deciding to start a claim in court, it is important to ensure that it is done well ahead of the limitation period such that issues of discoverability are not raised by the opposing party.

Have further questions? Contact our commercial litigation lawyer.

Graeme Oddy is a Toronto lawyer who joined the commercial litigation team at Devry Smith Frank in 2022 and has expertise in a broad range of commercial litigation matters. Graeme can be reached at graeme.oddy@devrylaw.ca and/or 416-446-5810.

This blog was co-authored by summer law student Muskan Agrawal.

“This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.”

 

[i] Limitations Act, 2002, SO 2002, c 24, Sch B.

[ii] Ibid.

[iii] Sheeraz v. Kayani, 2009 CarswellOnt 5397

[iv] The Ontario Flue-Cured Tobacco Growers’ Marketing Board v. Rothmans, Benson & Hedges, Inc., 2014 ONSC   3469

[v] Miletic v. Jaksic, 2014 ONSC 5043

[vi] Johnson v. Studley, 2014 ONSC 1732, 2014 CarswellOnt 3286

[vii] Alliance v. Gardiner Roberts, 2020 ONSC 68