Lausen v. Silverman is a well-reasoned decision from the Court of Appeal considering the discovery of a solicitor’s negligence claim.
The plaintiff was injured in a car accident. She consulted the defendant solicitor, who commenced an action on her behalf against the other driver for damages. At mediation, the plaintiff followed her solicitor’s advice and settled the tort claim.
The plaintiff continued to suffer from her injuries and asked her solicitor to assist in obtaining statutory accident benefits. The solicitor asked for a further monetary retainer and their relationship ended. The plaintiff consulted another a lawyer, and he obtained an psychiatric opinion that the plaintiff’s injuries met the “catastrophic” threshold under the accident benefits regulation.
Almost six years after the settlement of her tort claim, the plaintiff commenced an action against her first solicitor for breach of contract, negligence, and breach of fiduciary duty for advising her to accept an improvidently low settlement of the tort claim.
The defendant solicitor moved for summary judgment on the basis that the claim was statute-barred. The motion judge framed the issue as whether the plaintiff’s claim was discoverable within two years of issuing her statement of claim. She found that the plaintiff ought to have had the necessary knowledge at the time of the settlement to bring her claim.
Justice Feldman granted the plaintiff’s appeal. The motion judge erred in her interpretation and application of section 5(1) of the Limitations Act. The plaintiff did not have knowledge that she had a claim against the defendant until she learned about it from her current counsel based on the medical opinion he obtained. The opinion was the first indication that the plaintiff’s injuries warranted more compensation than she had received from the settlement.
Whatever facts the plaintiff knew at the time of the settlement, the defendant also knew them, and they did not cause the defendant to consider that the plaintiff might have had a claim against her. If the defendant considered that she had settled the tort action improvidently, the Rules of Professional Conduct obliged her to advise the plaintiff of the potential error and to notify LawPro. Advice from a lawyer of an error or omission will in the normal course cause the client to discover the resulting claim against the lawyer, but there was no such advice in this instance.
Meanwhile, it was the plaintiff’s uncontradicted evidence that although she felt that the settlement was unfair after concluding it, she did not know that it was improvident or that she had a claim against her former lawyer until so advised by her new lawyer based on the expert report. Justice Feldman found that this evidence rebutted the section 5(2) presumption that the plaintiff discovered her claim on the date of the events giving rise to it.
Following the Court of Appeal decision in Ferrara v. Lorenzetti, Justice Feldman found that a reasonable a person with the abilities and in the circumstances of the plaintiff would not have realized that she had a claim against the defendants when no one, including the defendant, indicated to her that the settlement might have been improvident.
