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Loss Prevention Tip #11

Are you suing the right party?

When you file a lawsuit, beating the statute of limitations is not your only concern. You must also ensure that you’ve named the proper defendant. Malpractice claims arising out of failure to name the proper party are common. Here are two illustrations:

  1. Lawyer asks associate to draft a claim for client, who was in an automobile accident. The police report says the driver of the other vehicle was Mr. X, so associate names Mr. X as defendant. Just before the limitation runs out, lawyer files the statement of claim. Mr. X gets the claim against him dismissed, because his son was actually the driver. By now the limitation has passed, and lawyer is barred from suing the correct defendant.
  2. Client slips and falls at convenience store. Lawyer reviews convenience store’s business licence, which is issued to PDQ Corp. Three weeks before the limitation date, lawyer files suit against PDQ Corp., which files bankruptcy, causing a stay of the personal injury action. Long after the limitation date passes, the stay is lifted and discovery begins. In response to a question, it is learned that someone other than PDQ Corp. was the occupier.

In each situation, lawyer relied on a single source to identify the defendant: a police report, a registrar, a business licence. A more complete investigation would have disclosed the proper defendant. What’s more, lawyer waited until the last minute to file the lawsuits and lost any opportunity to correct mistakes. To reduce the likelihood of malpractice claims from naming the wrong party, take these precautions:

Before filing the lawsuit, investigate thoroughly
Police reports, medical reports, and such documents can contain incorrect information. Insurance companies may name the policy owner rather than the alleged wrongdoer on their correspondence to you. Your client may not remember the name of the wrongdoer. Talk to witnesses. Research public records. If a corporation is involved, find out when it was formed and if it remains active.

File the lawsuit early
Give yourself enough time to correct a mistake if one is made. Filing early lets you conduct discovery to make sure you have named the correct party.

Stay alert to clues that you have named the wrong party
Pay attention to the defendant’s statement of defence; if you’ve named the wrong party, it will contain key denials that signal your error. Clues about mistaken identity will also be found in answers to interrogatories and deposition questions. Make sure you are not so caught up in prosecuting the case that you fail to pick up on these clues and take appropriate action.(Excerpt from Issue #124 CLIA Loss Prevention Bulletin)