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BARRISTERS AND SOLICITORS - Liability - Missed limitation periods

Wednesday, May 30, 2018 @ 8:31 AM  


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Application by law firms for summary dismissal of claims against them. The first law firm, on behalf of the plaintiff, filed a statement of claim against a contractor in 2002. The agreement between the plaintiff and the contractor had a mandatory arbitration clause. The file was transferred to the second law firm in 2004. In 2005, the Alberta Court of Appeal released its decision in Babcock, holding that where there was an arbitration clause the underlying arbitration was statute-barred and that the statement of claim should be dismissed. On November 4, 2009, the second law firm realized that the notice to arbitrate was not served in time, but did not tell the plaintiff about the problem until November 12. The claim was struck because the plaintiff had not served a notice to arbitrate and, by then, the plaintiff could not arbitrate because the limitation period had run. The plaintiff sued the first law firm on November 9, 2011, for negligence. The first law firm argued that the limitation period for suing it had run. The second said that the limitation period for serving a notice to arbitrate had run before it assumed conduct of the file.

HELD: Application by the first law firm allowed; application by the second law firm dismissed. The claim against the first law firm was out of time. The plaintiff had a claim against the first law firm at least when the second law firm learned of the problem. The plaintiff was bound by the second law firm’s knowledge. There might be a fair argument that, when Babcock was released, commercial litigation counsel should have been aware that the failure to serve a notice to arbitrate might be fatal to a claim when the parties had agreed to arbitrate their differences. There was a need for expert evidence as to what a reasonably competent lawyer would have done at the time.

HOOPP Realty Inc. v. Emery Jamieson LLP, [2018] A.J. No. 483, Alberta Court of Queen's Bench, Master A.R. Robertson, April 18, 2018. Digest No. TLD-May282018006