Employers brace for surge in litigation and ongoing delays in 2021

In-house counsel share strategies for mitigating against litigation risk

Employers brace for surge in litigation and ongoing delays in 2021

Following a year of immense disruption to the legal landscape, fueled by courtroom lockdowns, office closures and a new world of virtual solutions, in-house counsel wait anxiously to see what 2021 has in store. As many people begin to think about a gradual return to offices this year after months of remote working, employers are bracing for potential employment litigation. Collections will be a major problem for corporations as businesses struggle to recover from the economic fallout of the pandemic. 

“A lot of corporations are facing a scale of claims that they haven’t faced before,” says Jennifer Biernaskie, a partner at the Calgary office of McLennan Ross LLP. “Because of widespread policy changes for the last year in response to the pandemic, a lot of policies have had a more far-reaching effect than they’ve had before.” New policies or corporate decisions that impact large groups of employees may give rise to class actions, Biernaskie warns. 

This year may see an increase in arbitration cases and creative settlement proposals such as share exchanges, Biernaskie says, as courts struggle to clear a colossal backlog of cases.

“I think we are going to see an increased reliance on digital litigation, so I don’t think there will be an end in sight for things like virtual questionings and virtual mediations,” she says. As people are growing more comfortable with virtual proceedings, the number of cross-examinations may increase because travel expenses will no longer be an issue. 

“We’ll be forcing people to appear virtually, which expands the reach of litigation processes,” says Biernaskie. The downside of virtual proceedings is that they lack the casual discussions that  tend to occur when people come together in a room, Biernaskie says, as these casual discussions can lead to a resolution.

The ongoing pandemic crisis is likely to be the root cause of litigation in 2021, says Sandeep Joshi, associate general counsel and managing director of corporate investigations (Canada and international) at BMO Financial Group.

“When people get stressed about their personal financial situation or the financial situation of their company, they make judgments that they wouldn’t ordinarily make,” says Joshi. “I think you’ll see a lot of claims come up around employee misconduct or corporate misconduct with respect to customers or other parties that they deal with.”

Privacy and cybersecurity claims are also likely to crop up as employees continue to work from their home networks that are vulnerable to attack. In-house counsel can prepare for litigation risk in the year ahead by getting more involved in risk management and in actively identifying areas that might be susceptible to internal employee misconduct, Joshi says. 

At BMO, Joshi and his team are actively monitoring customer activity and vulnerabilities associated with an increasingly digital model. 

“We’re making sure that our employees who work from home are complying with our policies and procedures as best as we can and making sure that our networks are ready and established to fend off cyberattacks as we expand our remote network,” says Joshi. “We’re really looking at areas of high potential risk and taking proactive steps to make sure that we’re protecting our customers, our employees, the general public and our shareholders, and satisfying regulatory obligations as we do so.”

At The Seaboard Transport Group, preparing the business for delays in litigation matters is top of mind for the legal team.

“Whether it’s claims against the company or claims that we are prosecuting, the main thing that we’ve seen is that it’s going to take a lot more time to resolve some of those matters than it did before the pandemic,” says Kyle Power, legal counsel and manager of claims at Seaboard. The Dartmouth, N.S.-based transportation company operates across all provinces in Canada, so Power is monitoring the situation in different jurisdictions, as many of the courts are struggling to maintain the deadlines that they had prior to the pandemic. “Advising my principals that this is not going to be wrapped up in a typical litigation timeline is important,” he says.

As businesses start to re-open, they must have very clear policies to cover all potential employment law contingencies, Biernaskie says. 

“Now that we’ve had time to adjust to this reality that we’re in and we’ll likely be in for some time, companies need to get ahead of it by creating policies — particularly about employees — that are super clear and followed strictly and known to everybody,” she says.

Policies will also need to reference the COVID vaccine, so employees are clear about any requirements to be vaccinated before returning the office. 

“I think companies are going to really struggle with that because it’s difficult to say if it’s a plausible requirement. I think we’ll end up with some case law at some point. It will be interesting to see how it turns out,” says Biernaskie.   

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