Law Times

Page 6 September 9, 2013 Law Times • COMMENT u Editorial obitEr By Glenn Kauth Good move on legal expense insurance C anadians are generally a cautious people, so it's no surprise legal expense insurance has been slow to catch on here. While the scheme has done well in Quebec, it has had less success in the rest of Canada despite the arrival of DAS Canada in 2010. That's when the company got its insurance licence from the Financial Services Commission of Ontario to offer policies here. For a relatively modest premium, the product offers coverage for legal issues such as labour and employment and personal injury matters. For the legal profession generally, it's certainly positive to have another mechanism for clients to be able to retain someone for legal services. People with legal problems, of course, benefit by having a relatively affordable way to pay for legal services. So it was good to see the Canadian Bar Association embracing the concept last week. It announced it's partnering with DAS Canada to encourage the development of more legal insurance policies and educate people and the profession about their benefits. The announcement followed a CBA report on access to justice released last month that called on the organization to increase awareness about the benefits of legal insurance; collaborate with providers; work with governments to explore the feasibility of mandatory coverage; and communicate its positive stance on the concept. The idea is to help expand the reach of legal insurance with a target of 75 per cent of middle-income Canadians having adopted it by 2030. As the CBA report notes, legal expense insurance isn't a panacea. There are always going to be gaps and limits in coverage, and the report repeatedly refers to the idea of expanding legal insurance to family law matters, an area many Canadians are more likely to need legal assistance in. But given the benefits of having coverage and the success in promoting legal insurance in Quebec, it's a good time to try to give the idea a boost in other provinces. The CBA's effort, then, is a welcome one. — Glenn Kauth Debate continues on whether limitation period applies to all contractual indemnity claims BY CHRISTOPHER HART For Law Times u SPEAKER'S CORNER I n Canaccord Capital Corp. v. Roscoe in June, the Ontario Court of Appeal ruled that claims for indemnity based upon contract are not exempt from the limitation period established under s. 18 of the Limitations Act. Therefore, in many situations, if defendants wish to claim indemnity from another wrongdoer on the basis of an indemnity provision in a contract, they must initiate the claim within two years after the original claim was served on them. However, the court left open for debate whether the limitation period established under s. 18 of the act would apply to every contractual indemnity claim. According to the facts in the case at bar, Gregory Roscoe worked as an investment adviser for Canaccord Capital, an investment dealer. His employment agreement with Canaccord contained a provision requiring him to indemnify the company in the event of any claim against it or if it was found liable because of his actions. In 2008, Thomas and Kathleen Cavanagh, two of Roscoe's former clients, sued Roscoe and Canaccord for losses arising out of an investment for which Roscoe had acted as their investment adviser. Canaccord and Roscoe presented a joint defence and did not cross-claim against each other. In April or May 2009, Canaccord entered into settlement discussions with the Cavanaghs. Roscoe retained Law Times of Appeal that went on to overturn the motion judge's decision. After a review of the history of the legislation governing claims for contribution and indemnity, the court held that the legal theory grounding a claim in that area is not relevant for deciding whether s. 18 of the act applies. Rather, the provision applies regardless of the legal theory underlying the claim. Therefore, the fact that Canaccord's claim was based in contract had "no bearing on the question of whether or not it falls within the reach of section 18." However, the appeal court did not go so far as to state that s. 18 of the act would apply to every claim for contribution and indemnity based upon contract. Because the wording of the indemnity provision in Roscoe's employment contract coincided with s. 18 of the act, the court did not consider the situation that would arise if the language differed. Thus, Canaccord makes it clear that parties must commence claims for contribution and indemnity based upon a contractual provision that tracks the language of s. 18 of the act within two years after a defendant is served with a statement of claim. However, where the language of the contractual indemnity provision differs from s. 18 of the act, it remains unclear when a party must commence a claim. LT independent counsel who advised Canaccord that Roscoe denied any wrongdoing. In July 2009, without Roscoe's involvement, Canaccord settled with the Cavanaghs. In January 2010, Canaccord asked Roscoe to indemnify it pursuant to Roscoe's employment agreement. Roscoe refused and in June 2011, approximately three years after the Cavanaghs served him and Canaccord with their statement of claim, the company commenced an action against him in which it claimed the amount of the settlement plus its legal fees. In response to Cannacord's claim, Roscoe brought a motion for summary judgment to have it dismissed. He argued s. 18 of the act barred Canaccord's action because the claim was for indemnity and it began more than two years after the company was served with the Cavanagh claim. The motion judge dismissed Roscoe's motion for summary judgment. She held that Canaccord's action was properly characterized as a claim for a breach of Roscoe's employment contract and was not a claim for indemnity. Therefore, Cannacord's claim fell under the basic two-year limitation period that ran from the date it settled the Cavanagh action. Roscoe appealed the ruling to the Ontario Court uChristopher Hart is an associate at the Ottawa office of Borden Ladner Gervais LLP. Thomson Reuters Canada Ltd. One Corporate Plaza, 2075 Kennedy Rd., Toronto, ON • M1T 3V4 • Tel: 416-298-5141 • Fax: 416-649-7870 www.lawtimesnews.com • clb.lteditor@thomsonreuters.com • @lawtimes Director/Group Publisher . . . . . . . . . . . . Karen Lorimer Editor in Chief. . . . . . . . . . . . . . . . . . . . . . Gail J. Cohen Editor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Glenn Kauth Staff Writer . . . . . . . . . . . . . . . . . . . . . . . .Yamri Taddese Staff Writer . . . . . . . . . . . . . . . . . . . . . . Charlotte Santry Copy Editor . . . . . . . . . . . . . . . . . . . . . . Mallory Hendry CaseLaw Editor . . . . . . . . . . . . . . . . . Adela Rodriguez Art Director . . . . . . . . . . . . . . . . . . . . . . Alicia Adamson Production Co-ordinator . . . . . . . . . . . . . Catherine Giles Electronic Production Specialist . . . . . . . Derek Welford Advertising Sales . . . . . . . . . . . . . . . Kimberlee Pascoe Advertising Sales . . . . . . . . . . . . . . . . Steffanie Munroe Advertising Sales . . . . . . . . . . . . . . . . . . . . . . . Grace So Advertising Sales . . . . . . . . . . . . . . . . . . . . Joseph Galea ©2013 Thomson Reuters Canada Ltd. All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Thomson Reuters Canada Ltd., clb.lteditor@thomsonreuters.com CIRCULATIONS & SUBSCRIPTIONS $179.00 + HST per year in Canada for print and online (HST Reg. #R121351134), $145 + HST per year for online only. Single copies are $4.50. Circulation inquiries, postal returns and address changes should include a copy of the mailing www.lawtimesnews.com label(s) and should be sent to Law Times One Corporate Plaza, 2075 Kennedy Rd. Toronto ON, M1T 3V4. Return postage guaranteed. Contact Ellen Alstein at ............ 416-649-9926 or fax: 416-649-7870 ellen.alstein@thomsonreuters.com ADVERTISING Advertising inquiries and materials should be directed to Sales, Law Times, 2075 Kennedy Rd., Toronto, ON, M1T 3V4 or call: Kimberlee Pascoe ...............................416-649-8875 kimberlee.pascoe@thomsonreuters.com Grace So .............................................416-609-5838 grace.so@thomsonreuters.com Joseph Galea .......................................416-649-9919 joseph.galea@thomsonreuters.com Steffanie Munroe ................................416-298-5077 steffanie.munroe@thomsonreuters.com

• Cover