Recent amendments to the Alberta Limitations Act create more certainty and change the law with respect to certain types of third-party claims and notices to co-defendants where a defendant who is a tortfeasor seeks contribution from another tortfeasor who would also be liable to the plaintiff, whether that person is already a party to the action or not ("Contribution Claim").
The most important change to the Act resolves a serious problem that arose as a result of the decision of the Alberta Court of Appeal in Arcelormittal Tubular Products Roman S.A. v Fluor Canada Ltd. et. al, 2013 ABCA 279 (leave to appeal to the SCC dismissed). This decision reversed the effect of a number of lower-court decisions, so that no Contribution Claim could be made where the limitation period between the plaintiff and the potential third party had expired. As a result, a defendant could lose the right to make a Contribution Claim even before being served with a claim or being aware of a plaintiff's claim. It is important to note that a Contribution Claim can arise when a party is served with any type of originating claim, like a Statement of Claim or third-party notice ("Claim").
The amendments create a minimum period of two years from service of a Claim in which to bring a Contribution Claim. In most cases, service of a Claim on a defendant will likely trigger the limitation period, although in certain cases the limitation period may be longer.
The practice of delaying the service of a Statement of Defence so that a Contribution Claim can also be delayed is not affected by this change unless the third-party claim is not brought within the new limitation period for making Contribution Claims. This practice creates a potential risk. Where insurers, independent adjusters or lawyers are delaying the filing of a Statement of Defence or third-party claim (e.g. in an effort to resolve a matter) they must now take care to ensure that such a Claim is brought prior to expiry of the new two year limitation even if the Rules of Court would allow the third-party claim to be filed after that period. The procedural Rules do not extend the period in the Limitations Act.
The new limitation periods are retroactive: they are deemed to have come into force on March 1, 1999 (SA 2014 c13 s4) unless a matter has been settled or certain orders or judgments have been issued. This raises the possibility that Contribution Claims already served may be out of time and subject to being dismissed. These could be claims brought on behalf of or against an insured. We recommend that you discuss any concerns about this with a member of the Gowlings Insurance Defence Group.
The amendments also provide for a two year period of discoverability if the defendant who is reasonably diligent does not learn of a potential Contribution Claim until after being served with a Claim. In this circumstance the limitation period could be extended past two years from when the Claim was served.
There is also a limitation for Contribution Claims where no Claim has been served. This applies in very limited circumstances where a party has made a payment to a potential plaintiff to settle a matter and wants to make a Contribution Claim, even thought the potential plaintiff has never brought a Claim.
There are other types of third-party claims that are not covered by these amendments. Please speak to a member of the Gowlings Insurance Defence Group or other counsel for further information.