Epiq Systems, Inc.
Corporate

Responding to statement of claim after deadline could prove costly

Statements of claim should always be dealt with quickly by companies as failing to respond in a timely way will almost certainly drive up costs and can complicate a matter even further, Toronto business lawyer Inga Andriessen tells AdvocateDaily.com.

According to the Rules of Civil Procedure, says Andriessen, “if you are personally served with a statement of claim in the province of Ontario, you have 20 days to respond." If you are served by an ‘alternative to personal service’ such as mail, or a copy was left with another adult at your place of residence, you have 25 days to respond, she adds.

Many people aren't aware of the consequences of missing the deadlines set out in a statement of claim, says Andriessenprincipal of Andriessen & Associates.

“The timelines are on the front page of the claim, but people are often overwhelmed and ignore them. In businesses, receptionists often don’t realize how critical the timelines are and may sit on the claims.

“About 20 per cent of all claims we serve are not defended within the initial time period,” she says.

And it can get expensive for those who don’t respond within the required timeline,  Andriessen cautions.

As the Rules note, a defendant found in default “is deemed to admit the truth of all allegations of fact made in the statement of claim.”

“If you are noted in default, you will at least have to pay the ‘costs thrown away’ to the other side to let you out of default. If they have obtained a default judgment, you’ll have to show you have a defence on the merits and pay the even higher costs than they incurred to get the judgment,” she says.

To avoid getting into this situation, Andriessen says it is vital for businesses to have clear processes for responding to legal documents.

“This is really important — make sure your staff knows that anything legal goes to management immediately,” she says.

For those who have already missed the 20-day deadline, it is possible for the noting of default to be set aside by the court — this is where a business lawyer can help.

“We can move quickly to attempt to negotiate setting aside of the default or ensuring the evidence needed to explain the default is before the court,” explains Andriessen.

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