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OCA sends vicarious liability case to trial

Can firm be found liable for use of letterhead?
|Written By Alex Robinson
OCA sends vicarious liability case to trial
Geoffrey Adair says the impact of a recent decision is that a firm could be found liable for the actions of a lawyer practising in association with it.

The Court of Appeal has opened the door to a firm possibly being found vicariously liable for the actions of a lawyer who practised in association with it.

In Wallbridge v. Brunning, the court has allowed a claim against Ottawa-based firm Williams Litigation Lawyers to proceed to trial after an Ontario Superior Court judge had dismissed it.

The claim was brought by Wallbridge Wallbridge — a partnership of lawyers with offices in Northern Ontario — for allegedly defamatory statements that lawyer Fay Brunning made about the partnership in letters.

Brunning, who is the wife of Williams minority partner Eric Williams, sent the letters using the law firm’s letterhead and worked out of the same office at one point, but she was not an employee of the firm.

The letters were sent to lawyers, a member of Parliament, former Wallbridge clients and a journalist who republished them on a blog.

The claim against the firm hinges on whether it can be found vicariously liable for Brunning’s allegedly defamatory statements given that she used its letterhead and was practising in association with the firm. Williams brought a successful summary judgment motion to have the claim against it dismissed, arguing that Brunning was acting independently when she sent the letters and that she was not an employee.

Ontario Superior Court Justice Annalisa Rasaiah found that there was no evidence that Brunning was being held out as a partner or employee of the firm and that the letterhead made it clear that she was practising in association.

Rasaiah determined that Brunning’s actions were not sufficiently close to the law firm to justify a finding of vicarious liability and that there was no evidence that proved the letters were written in relation to any asks assigned by the firm.

But the Court of Appeal found it was not in the interest of justice to decide the case on a summary judgment motion, as its central question is a novel one.

“Given the strength of the evidence that could support a finding that Williams should be found liable for Brunning’s allegedly defamatory correspondence, and given the novelty and importance of the question, the motion judge should have refused to grant summary judgment and allowed the matter to proceed to trial,” Justice Russell Juriansz wrote on behalf of a three-judge panel.

“No evidence from recipients of the allegedly defamatory correspondence is necessary to establish that they understood Brunning is associated with Williams,” added the ruling.

Geoff Adair, the lawyer who represented Wallbridge Wallbridge in the matter, says that there are any number of lawyers in Ontario who hold themselves out as “practising in association” with other lawyers, which can mean varying forms of association from space sharing to client referrals. He says the impact of this decision is that if one lawyer holds another out as practising in association, they should be careful as they may be found responsible for each others’ negligence or wrongdoing.

“Lawyers have to be aware of that and be very careful as to the possible consequences of advertising an ‘in-association’ relationship,” he says.

In the letters, Brunning alleged that Wallbridge Wallbridge had been negligent in the way it represented residential school survivors and had committed obstruction of justice by being involved in a scheme to supress evidence.

She claimed the firm had co-ordinated with the federal government to conceal documents relevant to claims of residential school survivors, according to the plaintiff’s statement of claim.

Williams had argued that Wallbridge had failed to “put its best foot forward” to lead any evidence that Brunning had defamed the partnership, but the Court of Appeal found this argument had no merit as the only live issue in the matter was whether Williams could be found liable.

The court determined that while the motion had not attached any weight to the fact that the allegedly defamatory statements were published under the firm’s letterhead, this could “reasonably be seen as Williams placing its reputation behind the alleged defamation.”

The Court of Appeal found that Brunning’s use of the firm’s letterhead to send the letters was “fully authorized” and that Williams had granted the lawyer a “complete and uncontrolled licence to communicate” using the letterhead.

“In doing so, Williams created the opportunity, and took the risk, Brunning could use its letterhead to publish defamatory material, as it is alleged she did in this case,” Juriansz wrote in the decision.

While Williams might have viewed Brunning as independent, the firm could have avoided being implicated by not letting her use its letterhead, the decision said.

In her decision, the motion judge, Rasaiah, noted that the plaintiffs had not filed any evidence that showed the recipients of the letters were misled about the relationship between the firm and Brunning, but the Court of Appeal said no such evidence was necessary to establish they understood the lawyer was associated with the firm.

While Rasaiah found Brunning was not being held out as a partner or employee of the firm, the Court of Appeal noted that the motion judge failed to consider the importance of the fact that the lawyer was associated with Williams.

On the letterhead, Brunning’s name was listed with the names of other lawyers, but there was an asterisk beside her name with a footnote that identified her as “Practicing in Association, not in Partnership.”

Rasaiah found that even though Williams took a risk by allowing Brunning to use the letterhead, the firm took steps to make sure their relationship was clear.

But the Court of Appeal found that the firm was holding Brunning out “as a lawyer who is one of ‘Our Lawyers’ and a member of ‘Our Team’, albeit one who practices in ‘association’ with it.”

Some lawyers find the decision troubling, as it could possibly lead to a lawyer being found liable for the action of another lawyer simply practising in association with their firm.

Bryan Kravetz, a lawyer with Grinhaus Law Firm, who was not involved in the case, says the decision could be the beginning of a “slippery slope.”

“If we’re holding all lawyers [of a firm] responsible for the actions of one particular lawyer, where it’s a cost-sharing or resource-sharing arrangement, where do we draw the line?” he says.

Kravetz says that when a doctor who practises with multiple doctors in the same clinic commits an error, the rest of the doctors in the clinic should not be held responsible for the one doctor’s negligence.

The same should apply for law firms and lawyers who share resources, he says.

“I think it might scare away some lawyers from joining forces and sharing costs,” he says of the possible implications of the plaintiff possibly being successful at trial.

Adair, however, says that it is often confusing for the public when a lawyer is held out in association, as they do not know the person is a partner or an employee. A finding that a firm is vicariously liable for the conduct of a  practising in association could do away with some of the ambiguity of that relationship, lawyers say.

Michael Kestenberg, the lawyer representing Brunning and Williams-Litigation Lawyers, declined to comment on the decision.

Adair said he had not heard from the defendants on whether they plan to seek leave to appeal the decision.

Adair says the claim against Brunning is also proceeding.


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