This recent case is a cautionary tale about suing a defendant for the wrong purpose.
In this instance, the decision to sue a lawyer who was representing a party in opposition to the plaintiff in an earlier transaction, solely for the purpose of getting some documentation from this lawyer to use in the lawsuit, proved to be costly for the plaintiff who was ordered to pay in excess of $35,000.00 in costs when the case was summarily dismissed against the lawyer.
The dismissal of the case against the lawyer was highly predictable because a lawyer generally only owes a duty of care to his or her own client, and not to any other person.. It is only in very rare and exceptional situations where a lawyer would owe a duty to protect the interests of a non-client third party, and this case clearly did not fall into any of these rare situations.
To make matters worse for this Plaintiff was the fact that the claim was brought too late, such that it was also dismissed on the basis of being statute barred by the Limitations Act, 2002.
Against this backdrop, the final blow for the Plaintiff was costs. Generally, when a plaintiff unsuccessfully attacks a professional’s reputation through a lawsuit, costs are awarded on a substantial indemnity basis if the claim is dismissed against the professional. Substantial indemnity costs is an amount very close to the full legal bill incurred by a party. Normally a successful party will recover about 50%-60% of their actual legal bill, which is referred to as recovering costs on a partial indemnity scale.
In this case, the defendant lawyer sought $35,912.96 all inclusive on a substantial indemnity basis, which was granted by the judge without any alteration or adjustment. The judge took the position that there “was clearly no merit to the claim” against the lawyer, and that the Limitations Act “was a clear defence in the circumstances of this case.”
The judge squarely addressed the Plaintiff’s argument that she shouldn’t be burdened by these costs because she didn’t want to sue the lawyer but it was all her lawyer’s doing when the Statement of Claim was drafted. In this regard, the judge said the following (at paragraph 42):
“It is not an answer to the claim for costs that ‘my lawyer advised me’ to bring this claim. That is an issue between …(the Plaintiff)…. and her lawyer.”
Generally judges are much more forgiving when it is not overtly clear whether a defendant would be found liable: sometimes theories of liability simply need to be tested, and it is too difficult to predict the outcome with any degree of certainty when the lawsuit is started. But in the present case, the claim, and rationale behind the lawsuit, was flawed right out of the gates, and the Plaintiff paid the price for unnecessarily dragging this defendant into the fray. A high cost sanction deters others from using the litigation process in this manner.
Clarke v. Mann et al, 2022 ONSC 4588
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc4588/2022onsc4588.html