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Page 2 May 1, 2017 • Law TiMes www.lawtimesnews.com avoid the merits of a case by util- izing a technical defence." The appeal turned on wheth- er a motion judge could grant a procedural mechanism called a representation order to the plaintiff, Pamela Lawrence, after a limitation period that would allow her to correct an error in her claim. Lawrence had improperly named the union as a defendant on the lawsuit, which is contrary to the Rights of Labour Act. So, in order for her lawsuit to proceed, Lawrence needed a representation order to name union members as defendants. The union argued that the claim has no legal effect as it named Local 773 as a defendant and that this ultimately meant there was no effective claim when the representation order was made. They also contended the representation order was issued past the limitation period anyway. The Court of Appeal found that the union, however, had not treated the claim as a "nullity" or as having no legal effect as it participated in the preliminary proceedings before the two-year limitation period applied. Sharpe said that treating pro- cedural f laws as "fatal nullities, incapable of amendments" was inconsistent with the modern principles of civil procedure. Robert Reynolds, the lawyer representing Lawrence, says the decision shows that the courts are good at seeing through such tactics. "It's unfortunate that instead of addressing the plaintiff 's claims in a non-straightforward manner, they resorted to this type of gamesmanship," he says. The court also cited a pre- vious decision that found a rel- evant section of the Rights of Labour Act was archaic. The act was passed in 1944 to protect unions against employ- ers, and it prohibits unions from being sued. The court found that since the time the act was enacted, collective bargaining has greatly evolved and that unions should be treated as "juridical entities." Sharpe added that while the act should not be ignored, it "is a factor to be taken into account when the court is asked to use another archaic concept, that of 'nullity,' to characterize the ef- fect of naming a trade union as a party." In his dissent, Justice Wil- liam Hourigan slammed the majority's analysis of the act, saying "it is not open to courts to ignore legislation on the basis that they feel it is outmoded or archaic" and that such an ap- proach "is contrary to the basic rules of our parliamentary de- mocracy because it usurps the legislative role of government." Hourigan maintained that the only way to bring a lawsuit against a union is to get a repre- sentation order and that, with- out one, the action is a nullity. He added that Lawrence's failure to obtain a representa- tion order before the limitation period was "not just a mere pro- cedural defect or f law" and that the need for such an order is a "substantive statutory require- ment." Jeffrey Murray, a partner with Stringer LLP, who was not involved in the case, says the de- cision preserves the plaintiff 's right of action while still up- holding the significance of the provincial Rights of Labour Act. "The purpose is not to pre- vent employees of unions from suing for wrongful dismissal," Murray says of the act. "I think Justice Sharpe rec- ognized that and was also con- cerned by the conduct by the defendants in this case, who had not raised the Rights of Labour Act as a defence for two years and had simply lulled the plain- tiff into I think a false sense that her action was viable." Through this decision and others like it, Reynolds says, the courts have invited the provin- cial government to revisit the language and intent of the legis- lation. "This particular court found that rigid interpretation of this, what would be a 70-year-old statute, is not in the best interest of modern society," he says. Lawyers representing the union declined to comment as their client was still considering its options with respect to the decision, including whether to seek leave to appeal. LT with proper enforcement, we're going to see increased transpar- ency between the lawyers and the clients regarding referral relationships and fees," she says. Claire Wilkinson, presi- dent-elect of the Ontario Trial Lawyers Association, says her organization is fully in support of the recommendations, but it will have to wait to weigh in on the cap to see how it plays out in practice. Wilkinson says there is not agreement among personal in- jury lawyers at the moment as to what the cap should be and even the 10-per-cent cap the OTLA has been pushing for was a matter of debate at the organi- zation's board. Wilkinson says she has heard concerns that if the cap is too low it might encourage lawyers who do not necessarily have the right expertise to take a case on themselves. "We don't want people work- ing in areas that go beyond their expertise," she says. Convocation opted for a cap rather than an outright ban of referral fees at its Febru- ary meeting, but the working group has since determined the amount of the cap, in addition to the details of a number of transparency measures. The transparency measures Convocation approved includ- ed a requirement that lawyers fill out a standardized form for referral fees. The form will have to be signed by the referring lawyer and the lawyer receiving the case, as well as the client. David Sterns, president of the Ontario Bar Association, says that, while he is supportive of the recommendations, the form is "a bit over the top." "The key point is that the client is aware of the fees. "Adding on a requirement that an agreement be signed by three parties seems to me to be too much paperwork for ques- tionable results," he says. "The key is that the client needs to know about the refer- ral fees, but lawyers shouldn't be put to a requirement to have three-way agreements to estab- lish that." Lawyers will also be required to record referral fees in their books going forward and will have to submit information to the law society concerning their referral fee practices in their an- nual reports. The law society also banned upfront prohibition fees, mean- ing lawyers will be unable to go to a number of lawyers to shop around for the largest referral fee before referring the matter. Mercer says that rather than having an incentive to get the biggest payment upfront, the re- ferrer will ideally look for who- ever will get the best return for the client and, therefore, the best return for them. The prohibition will, there- fore, align the interests of the client and the referring lawyer, Mercer says. "That's going to ensure that files are being referred not based on who is the highest bidder, so to speak, but that a referral is be- ing made based on competency, which is something we're re- quired to do as lawyers anyhow," Mazzucco says. The working group is still set to tackle advertising issues in the real estate bar, as well as contingency fees. Mercer says he expects rec- ommendations on those issues could come before Convocation in late spring or early fall. At its meeting in February, Convocation also approved changes to advertising that would include a requirement that licensees identify whether they are paralegals or lawyers in their advertisements and a ban on lawyers advertising work they have no intention of doing. Convocation also introduced a ban at that meeting on second opinion advertising, which en- courages clients who have al- ready retained lawyers to switch to the advertiser. LT Continued from page 1 Limit of $25,000 set for referring cases Wrongful dismissal action to go ahead Continued from page 1 NEWS ORDER YOUR COPY TODAY! Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. 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