Introduction

The process by which claimants have been able to pursue litigation has been evolving – though slowly – for years, through the adoption of new technologies that enable processes like cross-examinations by Skype, e-signature filings, or paperless trials. This technological evolution is likely to be accelerated in the era of COVID-19, forcing litigators to become innovative on how they can move matters forward when the cudgel of a court hearing is not available. For example, the Alberta Court of Queen’s Bench has instituted a new enhanced email filing system to support the goals of social distancing, thereby permitting law firms to file remotely and avoid appearing at the courthouse in person.

In the wake of changing societal circumstances as the result of COVID-19, plaintiffs to litigation are still expected to act diligently and bring lawsuits in a timely fashion. The development of flexible modes of procedure, like those described above, provide some means to do so, but the crux for claimants in this new litigation landscape may very well be protecting their right to pursue their claims at all, or in compliance with the various interim limitations rules being adopted by the courts. Limitation periods in provincial legislation provide specific time limits within which plaintiffs must file their claims in order to promote certainty and finality in the judicial system. The unprecedented nature of the COVID-19 global pandemic has forced courts in certain provinces to implement extraordinary measures to facilitate social distancing, including the variable suspension of limitation periods. In this update, we focus on the suspension of limitation periods, or lack thereof, in Alberta and Ontario, and what businesses and individuals can do to ensure that their civil claims remain protected regardless of the changing local and global landscape.

Alberta

In Alberta, the Court of Queen’s Bench has limited hearings to emergency or urgent matters only. While clerk offices and court locations remain open, access is limited to those who must be present. The Alberta Minister of Justice recently issued an Order in Council suspending limitation periods under certain enactments, including the Alberta Limitations Act, and suspending any period of time within which any step must be taken in any proceeding or intended proceeding from March 17, 2020 to June 1, 2020. The effect of the Order in Council is that limitation periods that expire between March 17, 2020, and June 1, 2020, shall be preserved, subject to earlier termination of the Order in Council.

The Alberta Limitations Act sets out a two-year limitation period from when the claimant first knew or in the circumstances ought to have known of the injury. While the two year limitation period applies to most claims, the ultimate limitation period is 10 years after the claim arose. Notwithstanding the Alberta Courts’ suspension of limitations periods, parties engaged in litigation may want to utilize tools authorized under the Alberta Rules of Court to add certainty to the limitations periods applicable to their matters.

Instead of filing a claim, a claimant can enter into a tolling agreement with the other party to suspend limitation periods until the protective measures taken in regards to COVID-19 have expired. The Alberta Limitations Act provides that if a tolling agreement expressly provides for the extension of a limitation period then the applicable limitation period is altered in accordance with the agreement. There is no prescribed limit on how long the limitation period may be extended; the only requirement is that the agreement must be in writing and be signed by the person adversely affected.

Ontario

The Superior Court of Justice in Ontario has likewise limited hearings to emergency or urgent matters only. However, the Province of Ontario issued an Order on March 20, 2020 suspending all limitation periods arising under “[a]ny provision of any statute, regulation, rule, by-law or order of the Government of Ontario … for the duration of the emergency”. Provisions that specify when certain steps must be taken in proceedings or intended proceedings are suspended for the duration of the emergency, subject to the discretion of the court. The suspension is retroactively applicable to Monday, March 16, 2020, meaning any limitation periods falling from that date until the state of emergency in Ontario is lifted are preserved. 

The Ontario Limitations Act establishes a basic two-year limitation period running from the day on which a claim is discovered. A claim is discovered on the earlier of the day upon which a person with the claim first knew, or a reasonable person with the abilities and in the circumstances of that person first ought to have known, (a) that the injury had occurred; (b) that the injury was caused by or contributed to by an act or omission, (c) that the act or omission was that of a person against whom the claim was made, and (d) that a proceeding would be an appropriate means to seek to remedy it. Even if the claim has not yet been discovered, the Ontario Limitations Act creates a maximum limitation period of 15 years within which to sue on a claim.

Agreements to suspend or extend the two-year and ultimate limitation periods are permitted under the Ontario Limitations Act. As in Alberta, such agreements do not prescribe limits on the length of time that a limitation period may be extended, but they must be express, with a clear request and a clear acceptance to toll the limitation period.¹

Takeaways

When it comes to preserving soon-to-be expired limitation periods in the era of COVID-19, there are a few approaches that claimants and litigators can take. If the parties are continuing to negotiate, or there is concern with commencing a claim during a pandemic, the plaintiff may require more time before advancing their claim. In order to preserve these limitation periods, the Rules of Court² generally permit the plaintiff to file a Statement of Claim and serve within six months to a year after filing. A claimant can file a claim with the courts as a placeholder, and subsequently make needed amendments to the claim prior to serving it within the applicable period allotted for service.

Alternatively, after filing, the plaintiff may apply to the Court for an extension of time for service.³ The longer the current suspension of sittings lasts the more likely these applications will be brought as emergency civil hearings.

Alternatively or additionally, parties may decide to enter into tolling agreements while business is interrupted by COVID-19 measures. If this option is taken, certain drafting considerations should be taken into account.

First, the agreement should apply not just to limitation periods under the applicable statute but also to equitable doctrines of acquiescence or laches, as well as deadlines under the applicable Rules of Court. This provides the broadest protection to a claimant seeking to preserve their rights. Second, the tolling agreement must be producible to a court or arbitration tribunal for interpretation and not subject to any assertion of settlement privilege or other argument regarding confidentiality. Finally, the tolling agreement should have a termination provision whereby either party can terminate upon reasonable written notice. Claimants may want to consider drafting the notice provision to prohibit either party from terminating the tolling agreement prior to a court lifting its suspension on limitation periods, if applicable. The notice period should also take into account that, after termination is effective, a claim may need to be drafted and filed in short order.

Ultimately, regardless of whether courts have suspended limitation periods or not, a tolling agreement can provide specificity around when the suspension of a limitation period comes to an end, and when the clock begins ticking again on the limitation period applicable to a claim.

For more information about limitation periods, or other commercial litigation matters, please contact Kelly Osaka, Christy Lee or another member of Dentons’ Litigation and Dispute Resolution group.

1. Markplan Inc. et al. v. Osman et al., 2019 ONSC 3209 at para. 11, citing PQ Licensing S.A. v. LPQ Central Canada Inc., 2018 ONCA 331 at para. 40. ↩
2. Alberta Rules of Court, AR 124/2010, Rule 3.26, [Alberta Rules]; Ontario Rules of Civil Procedure, RRO 1990 Reg 194, Rule 14.08(1). ↩
3. Alberta Rules Rule 3.26(1). Note: in Alberta, the extension of service must not exceed 3 months. ↩