In Ontario, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered is the basic limitation period in Ontario and most jurisdictions.
Recently, a client was sued and the claim was issued one day before the second anniversary of the day in which the Plaintiff’s claim was discovered. Why they waited as long as they did isn’t the point of this blog.
After delivering our Defence, we issued a Defendant’s Claim against a third party who we believe is responsible for the Plaintiff’s damages. Our Defendant’s Claim against the third party is for “contribution and indemnity” of the Plaintiff’s Claim.
Contribution and indemnity are concepts that are utilized to identify which Defendant, or any third party brought into the Action are liable to the Plaintiff for their loss.
Contribution refers to distributing a Plaintiff’s loss between parties requiring them to pay their proportionate share of those damages. Indemnity allows the Defendant who was sued to be entitled to recover the amount they may owe to the Plaintiff from the third parties or other Defendants.
Upon the Defendant in the Defendant’s Claim being served, we received an email from their representative demanding that we withdraw the Defendant’s Claim, claiming it was statute barred, meaning, the “cause of action” being the Plaintiff’s damages happened over two years ago, and we were out of time pursuant to the Limitations Act.
Section 18 of the Limitations Act deals with claims for contribution and indemnity and it clearly states that the limitation period on a claim for contribution and indemnity commences on the date the party claiming contribution and indemnity was served with the Plaintiff’s Claim.
Obviously, a party isn’t going to know they must sue someone until they are sued themselves. The original limitation period does not apply.
Always remember that you have two years from the date you knew you should sue to do so. That includes suing someone after you’ve already been sued.
Murray Brown, Licensed Paralegal