Employer said claim contained no viable cause of action, had no meaningful chance of success
Exclusive to Canadian HR Reporter from Rudner Law.
Suppose your company is named in a lawsuit brought by a former employee. After reviewing the statement of claim, it becomes clear that the lawsuit has no basis in fact, and that it has no reasonable chance of success.
Is there any way to dispose of the lawsuit early, without going all the way to trial?
Lawsuits for wrongful dismissal can be lengthy and costly for both parties. When an early settlement is not possible, litigants will sometimes look for ways to dispose of lawsuits without the need for a full trial, including by bringing summary proceedings.
The Rules of Civil Procedure also provide for other mechanisms for the early disposition of lawsuits.
In the case of Brown v. WeirFoulds LLP, the employer brought a motion to strike the statement of claim of its former employee on the basis that it:
- contained no viable cause of action
- had no meaningful chance of success
- was an abuse of the court process.
On these bases, a court can strike a statement of claim at an early stage, even before the statement of defence is filed. However, the court will only do so in very clear cases.
If you believe that a lawsuit against your company falls into one of these categories, you can consider whether a motion to strike is the right strategy to dispose of the lawsuit.
Brown v. WeirFoulds LLP
In the Brown case, the plaintiff was employed as an associate lawyer for approximately two-and-a-half months. He resigned from his employment, claiming that he was constructively dismissed.
Approximately two months after his employment ended, he sued his former employer, along with three lawyers in the firm. In his lawsuit he advanced many claims, including constructive dismissal, breach of employment contract, discrimination under the Ontario Human Rights Code, defamation, and unlawful conspiracy.
The plaintiff represented himself in the lawsuit. He prepared a statement of claim that was 165 pages long, and contained a significant amount of detail and allegations that the employer argued were irrelevant.
The defendant employer brought a motion to strike the statement of claim. In considering the motion, the Court reviewed each of the causes of action that were asserted by the plaintiff, and found that many of the causes of action were either not viable at law, or clearly had no viable chance of success based on the evidence.
Striking claims against individuals
The other major issue considered by the court was whether the plaintiff could continue his claims brought against the three individual defendants, who were lawyers in the firm. The court noted that the law firm acted as the employer, not the individual lawyers.
The general rule is that where an individual was acting in an employment capacity on behalf of their employer, it is usually the employer who is liable for wrongdoing, rather than the individual employee.
There are rare instances in which the courts will depart from this general rule, which have been outlined in other court decisions. However, in this case the court determined that there was no basis for the plaintiff to sue the individual lawyers separately from the law firm, and found that those claims could not continue.
In deciding the motion, the court made the following order:
- The statement of claim was struck
- The plaintiff was entitled to file a new statement of claim that complies with the Rules of Civil Procedure
- The only causes of action that the plaintiff could bring were breach of contract, wrongful dismissal, breach of the Employment Standards Act, 2000, and discrimination in breach of the Human Rights Code
- The plaintiff’s claims could only be made against the employer law firm, and not the individual lawyers
- The plaintiff was required to pay the defendants costs of the motion in the amount of $10,000.
The court’s order significantly limited the claims brought by the plaintiff, and permanently ended all of the claims against the individual defendants. However, it is important to note that although the defendants were successful in the motion, it did not finally determine the plaintiff’s lawsuit, which is able to continue against the law firm on a modified basis.
Conclusion
The Brown decision is an example of a defendant successfully moving to strike a statement of claim where it was clear that the claims had no reasonable chance of success. However, it is also a reminder that such motions, even when successful, do not always completely eliminate the lawsuit.
Therefore, it is important to consider the pros and cons of these types of litigation tactics with your lawyer.
If you are facing a lawsuit, it is important to speak with a lawyer to determine the best way to respond, even if the lawsuit appears to be frivolous.
Alex Minkin is an associate lawyer at Rudner Law in Toronto. He can be reached at (416) 864-8500 or [email protected]
