Access to Justice From A Corporate Perspective
Access to justice is an important issue facing the legal system today. The cost, length and complexity of legal proceedings can prevent people from seeking justice from the Courts. Not only can this lead to injustices on the personal level when wrongs go un-remedied, but from a societal level this can stymie the development of the common law. The law cannot adapt to current circumstances if people do not bring their issues before the Court. To help address this problem, the Saskatchean Court of Queen’s Bench has created new rules of process and procedure to seek justice in a fair, efficient and proportional manner.
When most people think of access to justice, it is usually the working man or woman who comes to mind. The average family’s finances often cannot fund a lawsuit. However, access to justice is not so limited an issue and it can be a challenge to small, one person or closely held corporations. Just because such entities are incorporated does not equate into excess funds for litigation. A particular challenge for small corporations is that there is a legal presumption that they must be represented by a lawyer in the Court of Queen’s Bench. While an individual may represent him or herself in Court, a one person corporation may not.
This presumption that a corporation must be represented by a lawyer in legal proceedings was recently considered by the Court within the context of the Court’s recognition of the problems of access to justice in the decision of Justice Barrington-Foote in Howden Bros. Construction Ltd. v. Freshair Enterprises Ltd. (c.o.b. Super Seamless of Canada),  S.J. No. 523, 2014 SKQB 290 (Sask. Q.B.). In this case the plaintiff, represented by a lawyer, had started a legal action against the defendant for breach of contract and relief under The Builders’ Lien Act when the defendant failed to pay for concrete work in the defendant’s building. The defendant alleged the plaintiff’s work was not acceptable pursuant to the contract and the defendant counterclaimed for the costs incurred to rectify the plaintiff’s work. The defendant, a small, family run corporation, was not represented by a lawyer. The plaintiff brought an application to the Court of Queen’s Bench for an Order requiring the defendant to be represented by a lawyer. The defendant in reply sought an Order that it could be represented by one of its directors, who was also its sole shareholder.
Justice Barrington-Foote examined past case law that considered situations and set guidelines for when a corporation may be allowed to not be represented by a lawyer in litigation. He also analyzed the issue in the context of the new Queen’s Bench rules of process and procedure, with their emphasis on access to justice. It was noted that access to justice was not limited to those who seek to represent themselves in Court. Sometimes an unrepresented litigant, unfamiliar with the law and legal process, may complicate and lengthen a court proceeding. This can increase the cost of litigation to the other litigant and the court system, thereby impeding access to justice to others.
Bearing in mind that each situation is decided on its unique facts, Justice Barrington-Foote described several factors relevant to determining if a corporation may be allowed to represent itself. These include:
(a) whether the proposed corporate representative is duly authorized by the corporation to act as its representative in legal proceedings;
(b) the relationship the proposed representative has with the corporation (i.e. director, officer or employee);
(c) the corporate structure of the corporation (i.e. number of shareholders, directors, employees, etc.);
(d) whether the interests of corporate stakeholders (shareholders, directors, employees, etc.) will be adequately protected, taking into account the significance of the litigation to the corporation;
(e) is the proposed representative capable to represent the corporation, bearing in mind the nature and complexity of the legal action and the representative’s skills;
(f) what impact refusing the request for self-representation may have on the corporation (i.e. financial); and
(g) is the corporation financially capable of retaining a lawyer?
Balancing all of these factors in light of the circumstances of the case, the Justice Barrington-Foote decided that the defendant could be represented by its director and sole shareholder. While the lawsuit was not simple in legal terms, the proposed representative was an experienced businessman who was familiar with the court system and proceedings from past experiences with lawyers. He did seem capable of understanding the key elements of his case. Further, the defendant was a small, closely held company and the proposed representative was authorized to act on the defendant’s behalf. Therefore, while the defendant perhaps could benefit from the services of legal counsel, the proposed representative was capable of doing so and was permitted by the Court to represent the defendant.
The Howden Bros. decision does not overhaul the law with respect to whether corporations may be self-represented. The case is not an endorsement for corporations to not retain lawyers. Indeed, from the factors Justice Barrington-Foote examined, there are good reasons why, in a case with a different fact situation, the Court would require that the corporation retain counsel. What the decision does perhaps signal is that the Court will look at the issue of whether a corporation should be represented by a lawyer from an access to justice perspective that takes into account the interests of all concerned; the litigants, the corporation and the justice system.