Have you or your company been served with a Statement of Claim? If so, this means exactly what you think it means – you my friend, are being sued.
Whether you are being sued by a client, vendor, or another business, this will not go away on its own. It may be that you didn’t pay an invoice to a vendor because the work they did was shoddy, or you didn’t carry out your end of a business agreement because the other company wasn’t delivering on their end of the contract. You may feel completely justified in the reason you didn’t do something, and you may feel that being sued is completely unfair, but the last thing you should do is ignore it!
Once you’ve been served with a Statement of Claim, the clock starts ticking. If you were personally served within Ontario, you have twenty days (including weekends) to serve and file a Statement of Defence on the party suing you. If you were served in another province or in the United States, you have forty days to serve and file your Defence.
Your Statement of Defence is your response to the Statement of Claim. It either admits or denies each fact set out in the Statement of Claim, as well as sets out the facts you intend to argue.
Now, let’s talk about what happens if you don’t take our warning seriously. Well once the timer runs out on your twenty days, the party suing you (A.K.A. “the plaintiff”) can ask the Court to note you in default. This means that you’ve lost the right to be notified of any future steps in the action. The plaintiff can then bring a motion for Default Judgment (without notice to you) and ask the Court for an Order that you pay all amounts set out in the plaintiff’s Statement of Claim.
If you or your business have been noted in default, you can ask the Court to have the noting in default set aside. But this won’t come cheap – you’ll likely have to pay the plaintiff’s costs to do so.
Remember, if you’re served with a document that reads “A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU” call a lawyer because this isn’t going away on its own – well, if you call the right lawyer, it just might!
Robin K. Mann, JD, Associate Lawyer