Law Times

Page 4 NEWS July 22, 2013 Law Times • Politicians, not courts, should fix insurance issue, lawyer says BY YAMRI TADDESE Law Times A lthough ensuring recourse for creditors and clients of bankrupt companies and solicitors is important, writing the laws that will guarantee such protection should be the responsibility of the legislature and not the courts, according to a lawyer who argued the issue in a recent case. In Re iPLANcorp., Superior Court Master Donald Short lifted a stay of proceedings and outlined a route for the plaintiff, Mademont Investments Inc., to access the insurance policy in a case against a bankrupt company. Mademont had hired iPLANcorp., a consulting company, for a land development project. It later sued iPLANCorp. for negligence. The defendant, in turn, filed a third-party claim against its lawyers and their law firm. Short's decision went against a longstanding Ontario Court of Appeal decision in Perry v. General Security Insurance Co. that essentially said plaintiffs can have direct recourse to an insolvent defendant's insurer only if they've suffered injury or damage to the person or property. "With respect to the majority in Perry, I, too, believe, the intention of the legislature is best achieved either by giving a wide interpretation to the word 'property' or by finding another route that will permit a more fair result to be achieved," wrote Short. Short's approach "may or may not be good public policy," says Sean Dewart, counsel for the third-party lawyers in iPLANcorp. who notes his view is more about who should be able to alter the law. "It is plainly a matter for the legislature. With great respect for Master Short, it's not appropriate for there to be a judge-made law when the Court of Appeal has specifically said this is a matter for the legislature." Nevertheless, Dewart says his clients have decided not to appeal the master's decision. Short isn't the only judicial officer who has tried to get around this difficult area of law, but the ultimate policy change should come from the legislature, according to Dewart. WHY do so. "For whatever reason, "When you have a situathe legislature hasn't dealt tion that's complex like this with it. We presume there's a and the Court of Appeal has reason they haven't dealt with said it's a matter for the legit when it's been drawn to islature, I'd have thought it's their attention. The theory is a matter for the legislature." that clients can investigate the But Dewart doesn't deny kind of insurance companies that when it comes to protechave when they deal with tion for creditors of bankrupt those companies." entities, the law could benPerhaps the law society efit from a revision. "There's It's up to the legislature to make a compelling argument that any changes, says Sean Dewart. and the legislature could work together on the issue, what's being done is not good public policy," he says. "What you have is Dewart suggests. "All lawyers should be adequately incertain creditors of a bankrupt being treated differently based on the lack of the insur- sured in Ontario. There's definitely a leance the bankrupt happened to purchase. gitimate public interest in lawyers being I can't see any reason why these creditors insured. If the law society were to make a should be in a better place than other credi- recommendation to the legislature, maytors for whom there's no liability insurance." be then the legislature would act. So far, I In his decision, Short lamented the lack don't think any of that has happened." Finance Ministry spokesman Scott of action by the government and the Law Society of Upper Canada to protect inno- Blodgett told Law Times the government is reviewing the Insurance Act. "The governcent clients of bankrupt lawyers. Dewart, too, acknowledges the lack of re- ment is continuing this initiative over the LT sponse from the government despite calls to next several years," said Blodgett. I am a child of immigrant parents who first came to Canada with empty pockets, but a dream of a better life and an admirable work ethic that would someday help them be able to realize that dream. What my family did not count on was that we would be facing an obstacle course rife with prejudice and hardship. It became clear that our hopes and dreams would take a back seat to countless confrontations with many individuals who took advantage of trusting and struggling newcomers such as us. It proved to be an extremely difficult time for us, especially because English was our second language and we felt like there was no one we could turn to for help. Who was going to care for us, and stand up for our needs and basic rights and freedoms honestly and justly? I was my parents' voice from an early age, and knew that when I grew up only one profession was going to help us and that I wanted to become part of that profession. Becoming a lawyer was the tool I was going to use to help not only my family but so many other vulnerable people like us reclaim their dignity and achieve their dreams through due process. And that is why I decided to go to law school. WENT TO LAW SCHOOL To know a lawyer is to know someone passionate about solving the problems of the day. Raong Phalavong, Cambridge LLP, is one of the 18,000 member lawyers of the Ontario Bar Association. Learn how the OBA advocates for this unique profession, and share your story at www.whyIwenttolawschool.ca. 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