Law Times

Law Times • January 12, 2009 Nelson? Derek's gone to a far, far better place –– sunny Florida –– where he's enjoying retire- ment while we shiver through the depths of winter. Me? I'm a journalist by trade I guess you're wondering: Who is this guy and what have they done with Derek on the block Park New kid Inside Queen's By Ian Harvey who specialized in crime and courts for many years so I know my way around the system both criminal and civil. I also covered politics at the municipal level and was in and out of Queen's Park over the years so I'm also well versed in the devious ways of government. I've been a journalist for some 32 years, mostly with Sun Media where I had the great pleasure of working with Law Times columnist and law- yer Alan Shanoff. I also took the Law for Journalists program at the Uni- versity of Western Ontario back in the day when investing in profession- al development was deemed a worthy expense by newspaper publishers. Ironically, this isn't the first time I've followed Derek into a gig — I trod in his footsteps when I began my career in 1977, he having left a news- paper which in turn hired me, and I must say he's a hard act to follow. Though, that's life, in a sense, isn't it? One domino falls and there's a ripple effect as the universe re- aligns itself. All of which got me thinking about the Ontario government's recent announcement of changes to the Small Claims Court limit and other Rules of Civil Proce- dure, and the ripple effect that's about to happen. I always liked Small Claims Court. It struck me as a place where every man could get his day in court to right a wrong and not have to remortgage his home or auction off his first born on eBay to fund it. As part of the Civil Justice report by Reform Project for- mer associate chief justice Coul- ter Osborne, Attorney General Chris Bentley said last month the monetary threshold will bump to $25,000 from the current $10,000 effective Jan. 1, 2010. It seems prudent. Litigation is be- yond the reach of average wage earn- ers and $25,000 is reasonable thresh- old in line with other jurisdictions. Coupled with the changes to the simplified process in civil procedure raising the limit to $100,000 from $50,000 under Rule 76, it's hoped the net result will be an easing of pressure in the Superior Court. Yet it also struck me that we're waiting for the other shoe to drop. With the higher threshold and a 15-per-cent allowance for costs, a potential $3,750, more cases and more lawyers will be attracted to Small Claims Court. The latter is not a bad thing, notes Mike Cobb, president of the Ontar- io Deputy Judges' Association, since (presumably!) lawyers will be better prepared and speed things up. "Still, we expect to see a signifi- cant [caseload] increase," says Cobb noting as the stakes go up, so too does the complexity of the cases which in turn ties up more of the court's time. Complexity is an issue in itself, too, with disputes that would have gone to Superior Court being diverted to Small Claims Court such as minor personal injuries or even libel and slander actions or wrongful dismissals. It only adds to the deputy judges' concerns, says Cobb, noting grum- bling in ranks around the fact there's almost no continuing legal educa- tion program in place. In the mean- time, it's more work for an unsatis- factory wage and there is ongoing litigation with the province on that front too. While their per diem was raised to $513 from $232 — the first increase in 26 years — many feel $750 would be closer to the mark and the association has brought an application for judicial review. And, as of now, there's no word as to whether resources will be bumped up to handle the extra case- load. As Osborne remarks, it's already the busiest civil court in Ontario with 75,299 new proceedings in 2005-2006 compared to 63,251 new proceedings in the Superior Court. Small Claims cases topped 63,633 new cases in 2007-2008. Under Rule 76, 14,282 new pro- ceedings were filed in 2005-2006, rising to 16,313 in 2007-2008. Still, Osborne says, there are few complaints about the process or the judges and decisions, which is some- thing you don't often hear about the courts, so kudos all around. Upping the ante could add less than 15,000 cases a year, he says, but adds facilities will need expanding nonetheless, along with more judges and court staff. Again, I wonder: Where's that announcement? David Alderson of Heydary Ham- ilton, whose debt recovery practice takes him to Small Claims Court, suspects there will be a lot more cases pouring into the arena than the 15,000 or so Osborne suggests. "We get lots of enquiries that never go forward," he says, noting litigants are sometimes loathe to ei- ther forego the excess over $10,000 in small claims or risk higher ex- penses at Superior Court, even with the simplified procedure. Despite good experiences with the court, he says, he's concerned the small claims process and stream- lined format is ill-prepared to han- dle more complex matters. Lack of discovery and few penalties for non-compliance with disclosure rules could also create more points of pain. It all adds up to a bunch of red flags. Small claims is a great example of a process which works well — perhaps too well — and could be a victim of its own success. Without the necessary resourc- es in place it could slow to a crawl like the overcrowded dockets at Superior Court. So I'm not sure if that approach- ing sound is the roar of the dominos gathering momentum or merely the winds of more change to come. LT To advertise in an upcoming issue, contact our sales team: Ian Harvey has been a journalist for 32 years writing about a diverse range of issues including legal and political Karen Lorimer 905-713-4339 karen.lorimer@thomsonreuters.com www.lawtimesnews.com Narrow 1/8 - 3X.indd 1 Kimberlee Pascoe 905-713-4342 kimberlee.pascoe@thomsonreuters.com 2/15/11 2:44:55 PM COMMENT PAGE 7 hould unions have the right to impose fines on mem- bers and collect them through the use of the courts? To answer this ques- S Fining union members Social Justice By Alan Shanoff tion we must venture back to 2004 when more than 125,000 members of the Public Service Alliance of Canada were on strike for seven days. About 200 crossed the picket line. One of them was Jeffrey Birch. Birch says he couldn't meet his financial obligations on the $50 per day of strike pay. He also didn't know how long the strike would last. So, he reluctantly chose to cross the picket line. The union issued fines against Birch and others who crossed the picket lines. Next came the hard part — trying to collect. Some paid, but many didn't. Those who didn't pay were sued by the union in Small Claims Courts. Some failed to defend themselves or show up in court. The union obtained default judgments against them. Birch decided to contest the union's ability to collect the fine. He and a colleague, who also crossed the line, retained counsel and the issue — whether a union can fine its members and use the courts to collect — was left to be resolved via an agreed state- ment of fact in an application in the Ontario Superior Court of Justice. The application was heard by Justice Rob- ert Smith. The union argued its constitution specifically allowed it to impose fines on its members and that the fines were reasonable. It contended that the terms of the constitution were contractually binding on its members and that it had a contractual right to impose and collect the fines. That is somewhat disingenuous as mem- bers have no real input into the language of the union constitution. Also, traditionally a court will not allow a party to enforce a pen- alty clause in a contract unless the amount of the penalty bears a reasonable relationship to the loss suffered by the party. But what loss did the union suffer? It claimed it lost about one penny per union member and with about 26,000 members, a fine of about $260 was justified. Yet, the union fined Birch $476.75, equivalent to the gross amount earned by Birch during the three days he worked after crossing the line. Smith concluded that the penny-a-mem- ber calculation was pure speculation. He also ruled that the union's imposition of the fines amounted to a penalty and disallowed it as not bearing any relationship to the losses suffered. Smith went further and found that the fines were unconscionable. Levying a fine of the gross wages earned would require Birch to pay more money than he earned after tak- ing into account all deductions. Such a fine, particularly during a strike when "members may already be suffering financially" was "very unfair." Therefore the fines could not be en- forced with the court's assistance, meaning that the fines were effectively unenforceable. to the Ontario Court of Appeal. fines were trivial, not un- conscionable, and that Birch should have ap- pealed his fine under the union constitution, and if he failed in that appeal he could have filed a complaint with the Public Service La- bour Relations Board. Of course, it was the union which sued, so why should Birch be restricted in his rights to defend the action? How could he be forced to exercise his internal rights of appeal while before a court in litigation? The real prob- lem for the union is that if it cannot levy fines then it cannot enforce its picket lines. It can't stop free riders — those who obtain the benefits of the strike without suffering the ill effects of the strike. Also, a union's most powerful weapon is the right to strike and anything that weakens that power can weaken the union's bargaining position. In early December, the OCA dismissed the appeal 2-1. The majority upheld Smith's reasons on every issue. What is problematic however is that the majority left open the is- sue of whether a union may use the courts to enforce a fine that is deemed to be fair. The court also left open the issue of whether a fine limited to the member's net pay would be deemed to be unfair. I understand why courts are often reluctant to decide questions that don't require immediate resolution, but leaving these important questions open merely invites another expensive action or application. In the meantime, I understand that union members continue to be threatened with fines and court action for crossing picket lines. It does seem unfair that members continue to face these threats when this issue could have been put to rest. No word has been received on a leave ap- plication to the Supreme Court of Canada although John Craig of Heenan Blaikie LLP, counsel for Birch, has advised me any leave ap- plication will be vigorously contested. In the meantime, what's the answer for the unions? Increase the strike pay so members won't be as tempted to cross picket lines. Also, there is nothing to stop the union from suspending members who cross picket lines. True, this doesn't impose a financial penalty, but it does bar those members from social functions and disentitles them some membership rights. Similar actions to enforce fines with the court's assistance have failed in other provinces. Saskatchewan is the only province where unions have been given the statutory power to fine members who have crossed picket lines. LT Alan Shanoff was counsel to Sun Media Corp. for 16 years. He currently is a freelance writer for Sun Media and teaches media law at Humber The union appealed It argued the

• Cover
• M&As Alive
• Union Fines
• Focus On Insurance Law