Discoverability Doctrine Extends Statute of Limitations in Professional Negligence

Recently, in Clarke v. Faust, 2016 ONCA 223 the Ontario Court of Appeal was asked to determine whether a claim of professional negligence was statute barred, where it was not brought within two years of the plaintiff having knowledge of the claim. After a thorough analysis, the Court held that as a result of the discoverability principle, the professional negligence claim should be allowed to proceed.

The Underlying Car Accident Claim

The facts in Clarke are relatively straightforward. The Clarkes were involved in a motor vehicle accident on April 7, 2006, where they sustained soft tissue injuries. They retained Joseph Faust as their lawyer, but Mr. Faust didn’t issue a Statement of Claim until June 17, 2008, two years and nine weeks after the accident (the limitations period is generally two years, subject to the discoverability principle, and in auto cases, the threshold). Around that time, the Clarkes hired a new lawyer, who advised that due to the discoverability principle, he was not worried about the limitations issue, but he nonetheless wrote to Mr. Faust on July 2, 2008 and advised him to put his insurer (LawPro) on notice of the missed limitations period. Mr. Faust responded that the limitations period had not been missed due to the doctrine of discoverability.

A statement of defence was filed on February 5, 2009, which did not raise a limitations issue. However, the defendant filed an amended statement of defence on March 18, 2009, which raised the limitations issue.

The Resulting Professional Negligence Claim

As a result, the Clarkes commenced a professional negligence action against Faust on December 22, 2010. Faust pled that the action against him was statute barred because it was commenced more than two years after the Clarkes knew (July 2, 2008) or ought to have known of their claim against him. Faust moved for, and was initially granted summary judgment on limitations grounds. Clarkes appealed.

Relying upon the discoverability principle, the Court of Appeal found that the claim was not statute barred, and should be allowed to proceed. In reaching that decision, the Court held that a person would need to have good reason to “believe he or she has a legal claim for damages before knowing that commencing a proceeding would be an appropriate means to seek to remedy the injury, loss or damage.”

In reaching that decision, the Court relied upon the fact that the Clarkes’ lawyers were of the opinion that the statute had not been missed, and that Clarkes’ lawyers had convinced the defence lawyers in the motor vehicle case of that as well. Only when the limitations issue was raised did the Clarkes have reason to know of the issue, at which point the statute began to run (such that the statute of limitations was inapplicable for the professional negligence action given the date filed).

On an interesting note that could have wide application to professional negligence actions, the Court of Appeal opined that it may have been possible to estopp (stop) Faust from pleading a limitations defence, had the Clarkes relied upon his expressed position that the limitations period in the motor vehicle accident had not been missed (in waiting to bring their claim against him for professional negligence).

If you believe you have been the victim of professional negligence or legal malpractice, call 647-495-8995 to speak to our experienced malpractice lawyers today.

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