What To Expect In An Ontario Business Lawsuit
If you are a small business owner and you’ve decided to sue – or are being sued – you’re probably anxious about what lies ahead.
As a small business lawyer in Toronto – one that specializes in corporate law and commercial litigation – I often prepare my clients for what to expect.
The bottom line is this:
Litigation is expensive, and it can take a long time.
So while you should be focusing your energy and your money on your business, if you’re involved in litigation, you will instead:
- Spend a good amount of time gathering evidence for your lawyer to argue your case;
- Pay your lawyer to handle the dispute on your behalf; and
- Potentially hinder your ability to sell your business.
This is why – where possible – settlement is typically the best avenue for all parties.
That said, small businesses inevitably run into problems. Below is a brief summary of the different elements of a Toronto business lawsuit.
How a business lawsuit begins
Legal papers called a Statement of Claim start a lawsuit. The person suing is the plaintiff, and the person being sued is the defendant. Both the plaintiff and the defendant are referred to as “parties” to the lawsuit.
In a Statement of Claim, the plaintiff alleges facts that give him or her a right to compensation in the form of money or some other remedy from the defendant.
The Statement of Claim must be served on the defendant within six months of its issuance. This is typically done by process servers.
Note that claims for $25,000 or less are started in Small Claims Court. Claims above this amount are started in the Ontario Superior Court of Justice. Additionally, there are different limitation periods for different claims. Most claims need to be filed within two years of the alleged harm caused by the defendant.
If you need to start a lawsuit, contact a good commercial litigation lawyer near you as soon as possible. He or she will help to determine whether you can proceed with a lawsuit, and which venue to start it in.
How to respond to a claim
The defendant has 20 days after service to defend the Claim, detailing why he or she should not have to compensate the plaintiff. If the defendant has a claim against the plaintiff, a counterclaim needs to be added to this response. (The plaintiff then has to file a Defence to Counterclaim and serve it on the defendant.)
If the defendant is short on time, he or she may file a Notice of Intent to Defend, which gives the defendant more time to produce a proper answer.
If a party fails to file a Statement of Defence or Defence to Counterclaim, the other party may note the first party in default and seek default judgment against the non-responding party for damages set out in the claim or counterclaim.
During litigation, either party can make a motion. Motions are applications for an order by the judge. You’re basically asking the judge to rule on something in your favour. For example, a motion to dismiss is one wherein you want to say the Claim is not sufficient to make a legal case and should be dismissed. Your lawyer will know what motions to bring – and when.
During hearings, the lawyers for both parties discuss applicable law and relevant case decisions with the judge.
This is the process of getting facts from the other side before trial. During discovery, the parties’ lawyers work out a discovery plan. Each party serves an Affidavit of Documents on the other side within the timetable set out therein.
An Affidavit of Documents lists all of the documents in a party’s possession relevant to the dispute. It’s important that your lawyer include all relevant documents in the Affidavit since those not included may not be produced as evidence at trial. What’s more, if you fail to include a document that may be damaging to your case, the court may penalize you with costs or even dismissal of the case.
Examinations for Discovery
This is where the lawyer for the other side asks you questions relating to the dispute. A transcript is then requested and can be used at trial to challenge evidence and for other purposes.
During an examination for discovery, if the person examined doesn’t have the information requested at hand, he or she may agree to get the answer after the examination (an “undertaking”). If the party doesn’t provide it, a motion to compel may be brought. Your lawyer will know when an undertaking is reasonable and ensure that you meet all your obligations to provide them.
If your action is started in Toronto, you must participate in a mediation session within 180 days of the first Statement of Defence being served. (The parties can consent to extend this time limit.)
Each party files a mediation brief with the mediator and gives a copy to the other side. The brief includes the factual and legal issues in dispute, the party’s position, and copies of all essential documents.
The mediator is not a judge, so the mediator makes no binding decision. The mediator is there to help the parties resolve the dispute. Note that all discussions and settlement offers during mediation are confidential.
When things proceed to trial
After mandatory mediation, if no settlement is reached, a party may request to set the matter down for trial. Within 120 days after the action is set down for trial, the court will give the parties notice of a pre-trial conference.
This is where the lawyers discuss the parties’ respective positions before a judge. The judge will help the parties reach settlement, and may provide an opinion. This opinion is not binding, but it may be helpful for the parties to decide whether to settle. If settlement is not reached, the judge will set a timetable and fix a date for trial.
It takes about two years for a Toronto civil case to make it to trial. Parties often settle before this time because legal fees are costly and, of course, there’s the risk of losing at trial. Where no settlement is reached, a trial begins. Both parties present their evidence by calling witnesses and, depending on the issues, expert testimony may also be heard. The judge will make his or her binding decision on the parties. If a party is not happy with this decision, he or she may appeal it under some circumstances. Again, your lawyer will know when there is grounds to do so.
Contact Anton M. Katz, Barrister & Solicitor Today
With over 23 years of corporate law and commercial litigation experience, Anton M. Katz, Barrister & Solicitor is dedicated to helping small business owners with all their legal needs.
Contact us today to book your free initial consultation.