July 8, 2016

Discoverability; when should plaintiffs know what they don’t know?

Lauesen v. Silverman, 2016 ONCA 327, Feldman, Lauwers and Benotto JJ.A.

 

Daniel MacDonald

Daniel Macdonald

Personal Injury Lawyer

 

Donald Rumsfeld, the former US Secretary of State, stated in a 2002 Defence Department briefing:

There are known knowns; there are things that we know that we know.  We also know there are known unknowns; that is to say, there are some things we don’t know.  But there are also unknown unknowns – the ones we don’t know we don’t know.

Figuring out when it is reasonable to know that one can sue could fit in the category of an “unknown unknown”. The Limitations Act, 2002 [1]  provides that a proceeding must be commenced within two years of the day on which the claim was discovered.  But when is a claim discovered? Section 5(1) of the Limitations Act, 2002 states that a claim is discovered on the earlier of:

a) The day on which the person with the claim first knew,
i. That the injury, loss or damage had occurred,
ii. That the injury, loss or damage was caused by or contributed to by an act or omission,
iii. That the act or omission was that of the person against whom the claim is made, and
iv. That, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
b) The day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

For a lay person, trying to figure this out is surely an “unknown unknown”; they don’t know the test under the Limitations Act, and even reading it they don’t know if they would meet it.  So how are they to know when they should sue after being injured?

In this case the Court of Appeal has provided some guidance on when it is reasonable for a lay person to know that they should sue.

The underlying decision in this case was a solicitor’s negligence claim.  Ms. Lauesen had been injured in motor vehicle collision in November 2002.  She consulted Ms. Silverman who started an action for damages.  At mediation in 2005, on the advice of her lawyer, she accepted $26,169.36 in full settlement of her claim.  Ms. Lauesen was not happy about receiving this amount but trusted the advice of her lawyer.  Ms. Lauesen continued to suffer from her injuries and in 2010 consulted another lawyer about the continued pursuit of accident benefits.  In June 2011 her new lawyer obtained an opinion from a psychiatrist that Ms. Lauesen’s injuries were catastrophic.  On learning this, Ms. Lauesen commenced an action against her former lawyer, Ms. Silverman, for negligently advising her to accept an improvidently low settlement.

Ms. Silverman took the position that Ms. Lauesen’s claim was started more than two years after the impugned settlement and thus was statute barred by the Limitations Act, 2002.  So when does Ms. Lauesen know that she has suffered a loss and can sue; on the date that the improvident settlement is reached, or when she received the psychiatry opinion that her injuries were catastrophic?

The Court of Appeal clarified here that to discover a claim, a person must know of the existence of the material facts that will form the elements of their cause of action.  In this case, until the psychiatrist opinion was obtained that the injuries were catastrophic Ms. Lauesen had no basis to believe she might have a claim.  Before then she was upset at the settlement, and still suffered from her injuries.  However, the expert psychiatry report was the first indication to Ms. Lauesen and her lawyer that her injuries were very significant and warranted more compensation than she had received from settlement.

In this case she could not discover her claim until she had the psychiatry report.  As stated by the court, “on the record in this case, a reasonable person with the appellant’s abilities and in her circumstances would not have realized that she had a claim against the respondents, when no one, including the respondent, indicated to her that an error might have been made with respect to the settlement.

Application

A claimant must have knowledge of the material facts that form the elements of a cause of action in order for the time period to start an action commences.  In some cases this means that more than two years may have passed since the collision or incident before that knowledge is obtained.  In some cases, it will not be until an expert or professional opinion is obtained.  This decision assists the lay person who may not know what they don’t know: the material facts necessary to support a claim.

[1] Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

If you have questions or comments about this edition of the newsletter, contact Daniel Macdonald at Legate & Associates: d.macdonald@legate.ca