"AvoidAClaim" Blog

I have a songwriter friend who reports that the hardest part of writing a song is finishing it. She finds that her enthusiasm for writing means that she loves the initial burst of creative energy, but she has trouble keeping herself on task for the polishing process: When a song is nearly finished, she finds herself eager to begin a new one.

Luckily for my friend, she’s often the only person who feels her work is unfinished – everyone else just hears a great song, not a work in progress. Unfortunately for lawyers, a client matter 90 per cent completed is not good enough. Legal work is often about managing a myriad of details, many of which are very important. We at LAWPRO are reminded of this whenever we see a claim come in that is based on a lawyer failing to complete a crucial step – like ensuring that a title insurance policy is in place when a real estate deal is closed. See Kathleen Waters’ recent article on this very topic here.

Do ever find yourself just missing the finish line on a file? This is a very dangerous mistake, and it’s important to take the time to correct it.

Consider scheduling a appointment (it could be with your office staff, with the client, or even just a date with yourself) to formally close every file. Use a checklist (for example, our Commercial Transactions Checklist or our Domestic Contract Matter Toolkit) to review your work and ensure that no steps have been missed; go back and review your original notes with respect to the client; and follow up to confirm the status of registrations, applications, and execution of documents. Write a reporting letter to the client and send a final bill. Not only will you feel a greater sense of accomplishment with respect to the work, but you’ll avoid “loose ends”-type claims.

Here at LAWPRO, we monitor the news, especially legal journalism, to better understand the challenges facing lawyers. It’s rare that a week goes by without a story about barriers to access to justice. Indeed, while doing research for a feature about the challenges facing family lawyers in August 2012 (read it here), we were struck by how many of the lawyers we interviewed cited access to justice concerns as the most pressing issue in their field today.

But this week, two access-to-justice stories caught my attention by making the point that poor access to justice harms not only the individuals experiencing who experience it directly, but rather all of us. By restricting the pool of parties able to seek judicial remedies, barriers to justice slow the development of the caselaw, thereby allowing outdated or unsatisfactory practices, regimes and principles to remain in place, affecting the interests of the broader community.

The first story was Alan Shanoff’s commentary (Law Times, April 29 edition) about the costs backstory to the Jones v. Tsige privacy tort case. Successful plaintiff Jones was awarded $10,000 damages, but the litigation cost her over $160,000, and because of the novelty of the cause of action, she was required to bear her own costs. Shanoff points out that Jones developed the law with respect to privacy, but that the change was narrow, and exorbitantly expensive − inefficient progress, and incredibly burdensome for a single individual.

The second article, by Lawyers’ Weekly writer Cristin Schmitz (Lawyers’ Weekly, May 3 edition), tells the tale of an injured worker’s thirteen-year battle to obtain judgment against two insurers whose behaviour the court deemed a “reprehensible” display of bad faith. The result for the plaintiff was a record-breaking $4.5 million judgment (one of the first offers from one of the two insurers had been just $22,500). The court expressed doubt that many plaintiffs in the worker’s position are equipped to withstand “the financial and psychological pressure” of the kinds of defense tactics that were used in the dispute. How did this particular plaintiff manage? His daughter funded the litigation for as long as her funds held out, and then the law firm representing the plaintiff, Fasken Martineau, agreed to suspend billing its fees when the plaintiff hit the point where he could no longer pay.

While the firm’s forbearance was admirable in that case, we know that few law practices can afford to regularly postpone billing or gamble on receipt of fees, especially in practice areas where contingent fee arrangements don’t predominate. But as a profession, we cannot fall back on the excuse that we can’t afford to help promote access to justice. Not all forms of help cost money. Solutions to the increasing access to justice problem are likely to be complicated, piecemeal, and will require creativity and innovation.

Do you have creativity and innovation to spare? Keep reading and thinking about ways to improve access to justice while preserving quality in legal representation. And when you do have the capacity to assist an individual client (for example, by providing pro bono representation), remember that individual client wins often advance the law in ways that support the interests of society at large.

We at LAWPRO have occasionally cautioned lawyers who specialize in one area of law about the dangers of dabbling in another, unfamiliar area. As a refreshing twist on that general advice, we’re reminding lawyers that while dabbling can be dangerous, KNOWING the law in another area is never a bad idea. When it comes to the intersection between wills and family law, it is essential that wills and estates practitioners maintain a basic working familiarity with family law issues so that certain drafting pitfalls can be avoided.

From a family law perspective, the greatest potential risk for a will-drafting lawyer lies in overlooking a limitation – arising under the family law – on the testator’s freedom to dispose of property. Those limitations tend to fall into these categories:

Matrimonial home

Under Ontario family law, a spouse is not entitled to dispose of a matrimonial home without the consent of the other, regardless of who has formal title to the property. As a result, a lawyer drafting a will who is asked to make a bequest of a property should take steps to determine whether the house is a matrimonial home.

Both spouses need not be living in the home for the property to be a matrimonial home, especially if the spouses have recently separated. For that reason, asking the testator about who lives in the home will not satisfy the lawyer’s duty.

A matrimonial home need not to be a house in the traditional sense of the word — it could easily be a condominium, a cottage, a ski lodge, or even a time share property. Be careful not to make arrangements for the disposition of a home where the testator does not have full rights of disposition!

Support obligations

The second potential limitation on a testamentary freedom comes in the form of support obligations. The testator may be required, by court order or under a domestic contract, to pay support to a dependent ex-spouse or child. Don’t automatically assume that an elderly testator is free of such obligations without asking appropriate questions. For example, a testator may have a permanent obligation to support a disabled adult child. Ensure that if the terms of the court order or contract require it, sufficient provision is made in the will for the making of support payments after the testator’s death.

Dependants’ relief claims

A testator’s duty to support dependants need not be expressed in a court order or a domestic contract to be operative. If, at the time of his or her death, the testator was providing financial support to a dependant, and that dependant is not adequately provided for in the testator’s will, the dependant may make a claim against the estate under a dependants’ relief provision (in Ontario, these are found in the Succession Law Reform Act). Crafting a will that is rendered invalid by these kinds of claims can lead to a claim against the will-drafting lawyer.

Most wills and estates lawyers are careful to ask testators if they have a spouse or children who have been left out of the will. However, a lawyer may not think to dig a little deeper and to ask the testator if there are individuals OTHER than biological children who may be dependants. For example, the testator may, at the time the will is drafted, be living with a partner who has a child still at home. While the testator may not consider that individual to be his or her child, the individual may well qualify as a dependant under the Succession Law Reform Act.

Beneficiaries under insurance policies and other investments

Though it’s not exactly a family law issue, it is important for will-drafting lawyers to confirm the identity of beneficiaries under insurance policies and similar investments, especially where the proceeds of these policies are expected to fund bequests made under the will.

In some cases, estates have run into trouble where the drafting lawyer wrongly assumed or was told that the estate was the beneficiary of a policy, later to discover that the beneficiary is actually a named individual. In an additional wrinkle, the testator may believe that his or her current spouse is the beneficiary, when actually, the policy was not amended after the testator’s marital status changed, and a former spouse is still the beneficiary.

Good wills practice requires that, where at all possible, the will-drafting lawyer review any insurance policies personally, keeping a copy on file.

Marriage revokes a prior will… but divorce doesn’t!

One point that is generally known to lawyers but not necessarily to their clients is that a testator’s marriage revokes any will created prior to the marriage, but divorce does not have the same effect, i.e., a will drafted after marriage remains in effect despite the testator’s divorce. This rule is likely more relevant to family lawyers (who should advise their divorcing clients of the advisability of preparing a new will) than it is to wills and estates lawyers. But where a wills and estates lawyer happens to be aware of a client’s divorce (for example, if a member of the same firm is representing the client in the family matter), it would be prudent (and good for business development!) to send the client a note advising of the operation of this rule.

Multiple spouses

Finally, there is the question of who, exactly, the testator means when he or she mentions a spouse. It is not uncommon for a person to refer to a long-term partner as “my husband” or “my wife” when in fact the parties are not legally married.

If a testator makes a bequest to “my wife, Serena Gonsalves” and it later turns out that Serena Gonsalves is the testator’s partner but not his wife, the error will often be easily overcome; however, consider the following scenario:

Testator was married in 1966 to Hannah Parker. The parties separated in 1988 after raising three children together. They were never legally divorced. Upon separation, testator and Hannah Parker sold their matrimonial home and each bought separate residences. However, the testator allowed Hannah Parker to continue using the cottage (which the testator inherited from his parents and to which he holds the title) for a holiday with the children every August.

In 1991, testator’s partner Serena Gonsalves moved in with him and they shared a condominium in the city. They spent most of every summer at the family cottage. They were never married.

In his will, testator leaves the condominium to “my wife, Serena Gonsalves”. He leaves the cottage to his children, with a gift over, should they predecease him, “to my wife”.

If the children predecease the testator, who gets the cottage, Hannah Parker or Serena Gonsalves?

 
As this example illustrates, it is essential, in wills drafting, to have a clear understanding of the testator’s family history, his or her relationships of dependence, and of the effect of any family law court orders or domestic contracts that may limit the testator’s freedom to dispose of assets under a will.

It is good practice, for wills and estates lawyers, not only to develop a questionnaire that addresses all of these issues, but also to document the testator’s answers to the questionnaire.

Finally, where there are court orders or domestic contracts that might affect the will, the will-drafting lawyer should ask to review these and should place a copy in the file. The lawyer should also ask to review any insurance policies on which the testator is relying in making bequests so that the lawyer can confirm his or her understanding of who the beneficiaries are under these policies.

This article by Nora Rock, corporate writer & policy anylist at LAWPRO, appeared in the August 2011 edition of the LAWPRO Webzine. All webzine and magazine articles can be found at www.lawpro.ca/magazinearchives

By Nora Rock, corporate writer and policy analyst at LAWPRO

The concept of constructive trust has long been used, in family law, to support the awarding of an interest in property to a common-law spouse who is not on title.

While the concept of the matrimonial home exists to ensure that married spouses share in the family home on marriage breakdown, the matrimonial home rules do not apply to common-law spouses. However, many common-law spouses contribute to the family economy in such a way, during a period of cohabitation, that fairness dictates that they receive a share in property to which the other ex-spouse is on title. To support this kind of transfer, courts often impose, at a party’s request, a constructive trust on certain property.

The Limitations Act, 2002 would seem to impose a limitation period of two years for claims based on constructive trusts. On February 13, 2013, the Ontario Superior Court of Justice rendered judgment in McConnell v. Huxtable (2013 ONSC 948 (CanLII)), a case testing that limitation period. In this case, the applicant ex-common-law spouse Judith McConnell made a constructive trust-based claim against her ex-spouse’s property in February 2012. Her evidence was that the parties had separated in 2007 after a 13-year cohabitation. The respondent Brian Huxtable, relying on the Limitations Act, 2002, argued that her claim was statute-barred.

In refusing to issue summary judgment in favour of Huxtable, the court held that the limitation period applicable to family law-based constructive trust claims is 10 years, as prescribed in the Real Property Limitations Act, not two years.

The court explained that the nature of family breakdown makes it difficult to identify with any degree of accuracy the timing of the breakdown, and hence the moment when the claim for a constructive interest in the other spouse’s property arises. Instead, the claim should be characterized as an “action to recover land’ governed by section 4 of the Real Property Limitations Act, and subject to a 10-year limitation period.

In light of the frequency of claims against lawyers that are based on missed limitation periods, this decision deserves to be welcomed by the Ontario family bar; however, an appeal has been filed. Until a final decision is rendered by the Court of Appeal, we strongly recommend that lawyers file constructive trust claims within two years from the time they are discovered.

2013 is the first year 500,000 Canadians turned 60. It seems like a good time to revisit this article from five years ago, when the first edge of the Boomers were entering their seventh decade. It examines the implications for lawyers of this large and aging clientele.

Click here or on the image above to read this article from the Winter 2007 “Aging Boomers” edition of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives

This article is by Nora Rock, corporate writer/policy analyst at LAWPRO.

Valentine’s Day is a favourite for marriage proposals, but here at AvoidAClaim, we’re in the business of asking the question “what could go wrong?” Please forgive us for pointing out that while February may be all hearts and flowers, January is the most popular month of the year for relationship breakdown.

While it’s very unromantic to think about planning for the end of a relationship that’s just beginning, for some parties – notably those with significant assets – it MAY prevent at least the financial variety of heartbreak down the road. (I say “may”, because like us, you may have found yourself unable to avoid the temptation of reading the reasons in McCain v. McCain.)

A domestic contract can be created by parties at any stage of a relationship: before marriage, before unmarried cohabitation, before buying property together, midway through a relationship, or once the relationship has come to an end. Every domestic contract is different. Drafting a contract for parties who are still together can be especially challenging, especially if the parties attempt to retain the same counsel. This is an absolute no-no, because there are real or potential divergent interests. There’s no room here to scratch the surface on all of the issues that lawyers might encounter, so we will simply direct you to the many family law resources available at practicepro.ca. In particular, the Domestic Contract Matter Toolkit, released just last year, will help you ask the questions you need to find all the relevant information.

This article is by Nora Rock, corporate writer/policy analyst at LAWPRO.

Two weeks ago, the Ontario Superior Court of Justice sent a message to family lawyers (other litigators should take notice, too!) via a costs ruling in Principato v. Principato, a somewhat tortured family law proceeding.

The Principatos, it turns out, are like the vast majority of us: They lack the personal wealth sufficient to pay for a full-court litigation press over each and every issue that has arisen in their divorce. At the beginning of their litigation they were angry; now they are angry and broke. The proceeding, which the court described as still “in its infancy” (there had been a case conference, and some preliminary motions) had already gobbled up $92,000 of their money. And now the court was being asked to consider costs submissions in the amount of $15,000 from each side.

The response from Justice R.D. Gordon? Providing “Cadillac service” to clients without Cadillac means merits a reminder that lawyers have “a professional obligation to conduct litigation in a manner which reflects the means of the client and the issues which present.”

In this case, the court conceded that some clients can be resistant to a “proportionality analysis”; however, this does not absolve counsel from attempting to explain that “availability of certain actions does not equate to the appropriateness of those actions.” When impecunious clients won’t listen, counsel should, we’re told, “reflect upon whether they wish to act for a client who will not follow their advice.”

Justice Gordon was not specific about what counsel ought to have done instead. We all know that courts seem equally alarmed when the pendulum swings too far in the opposite direction: toward self-representation. Struggling to find an appropriate middle ground that achieves justice, avoids most serious risks, and remains within clients’ means is likely the most important issue in family practice today. For more on this, see “What keeps you up at night?” from the August 2012 issue of LAWPRO Magazine.

Clients are not the only parties who assume risks when they opt for scaled-back service. “Unbundling” family law services requires very clear lawyer-client communications, lest lawyers be exposed to claims based on incomplete service. Two articles on unbundling appeared in the January 2012 issue of LAWPRO Magazine: Unbundled legal services: Pitfalls to avoid by Dan Pinnington, and Unbundling and family Law: A cautionary tale by Debra Rolph.

Proportionality analysis? Unless your law office parking lot is jammed with Cadillacs, you’re doing it every day. Visit practicePRO for more tips on how to do it right.

Update March 8, 2013: By way of update, we have learned that the respondent in the Principato matter filed a motion (he characterized it as a “request for reconsideration”) of the no-costs order. After expressing uncertainty that the motion was proper in the first place, Justice R.J. Gordon reaffirmed his original order that the parties ought to bear their own costs with respect to the child support motion.

The introduction this past January [of 2005] of new spousal support guidelines has put the spotlight on family law practice. To put the impact of the guidelines in context – and to better understand the pressures of family law practice today – LAWPRO Magazine this spring convened a panel of family law practitioners from across the province. We asked them to step back and look at the larger picture: What has changed in the practice of family law? What are the issues facing those doing family law today, and how have our panelists adapted to these evolving issues? And what lies ahead for the family law practitioner?

Click here or on the image above to read this article from the July 2005 Family Law edition of LAWPRO Magazine. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives

• I will make better use of checklists and reporting letters: Family law involves complex documents that deal with complicated issues involving emotional clients. There are many risks of errors by the lawyer, and misunderstandings by the client. LAWPRO’s new Domestic Contracts Matter Toolkit has checklists and forms that contain points and questions lawyers should systematically consider as they conduct the initial interview on a domestic contract matter and when they meet with the client to review and sign the document. And a final reporting letter detailing what you did and what advice you gave can be a lifesaver in the event of a claim, which may arise long after you’ve forgotten the details of a particular file.
• I will be aware of the limitations of my legal knowledge: Family law is one of the most complex practice areas, with dozens of federal and provincial statutes and a huge amount of case law to keep track of. No lawyer can hope to be an expert in all aspects of this field, so it’s important to know when to seek advice from more specialized counsel (for estate planning, for example) or third party experts such as tax advisors, accountants or actuaries.
• I will proactively direct and control client expectations: Given the stress and emotions involved in their cases, many family law clients can be difficult to deal with. They may have unrealistic expectations as to the process, timing, costs, and potential outcomes of their matters. This makes it especially important that you manage their expectations from the outset to avoid disappointment and surprises later that might result in a claim. It’s also very important, in this area of law, to carefully explain the terms of domestic contracts so that clients cannot later allege that they did not understand the effects of these agreements.
• I will learn to say “no” and not take on a potentially difficult client: Further to the resolution above, there may be cases where the client will never be satisfied and it might be best to not take on the case at all. Lawyers involved in claims often tell LAWPRO that their instincts told them a client was going to be trouble. Have they changed lawyers several times? Do their demands seem unreasonable? Ask yourself if it’s worth accepting the retainer.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

click here or on the image above to read this article from the Winter 2006 edition of LAWPRO Magazine, “Delivering on the Client Service Promise”. All past LAWPRO Magazine articles can be found at www.lawpro.ca/magazinearchives