Legally Speaking with Michael Mulligan
Legally Speaking with Michael Mulligan
Small Claims Penalties, Arbitration Clauses, and Autopsy Photos
Do you ever wonder what happens when a small claims lawsuit is baseless?
Unlike in Supreme Court, judges cannot award costs to the successful party in Small Claims Court.
Costs are intended to both cover some of the legal and other expenses related to a court case. They can also encourage the settlement of meritorious claims and discourage needless litigation.
There is, however, a Small Claims Court rule that permits a judge to award a penalty of up to 10% of the amount claimed if someone proceeds to trial with a claim that has no prospect of success. This 10% penalty can be applied to each party that has a baseless claim brought against them.
On the show, a baseless claim made by the purchasers of a home against the couple who sold it is discussed, along with the resulting penalty imposed by the trial judge who concluded the plaintiffs were simply trying to get someone else to pay for renovations they decided to do.
Also, on the show, a claim against Google and Apple is discussed. The small British Columbia company was unable to pursue a claim against the large tech companies alleging an overcharge for advertising because of an arbitration clause included in the online agreement to purchase the online ads.
Large companies often insert arbitration clauses into user agreements to avoid being sued.
Because arbitration can be expensive and requires claims to be made individually, rather than as a class action, these provisions can stop claims completely because they become too expensive to pursue individually.
Lastly, we step into the world of murder cases, and autopsy photos.
Because judges have an obligation to determine if a piece of evidence would be more prejudicial than probative of an issue in a case, they need to determine if gruesome autopsy photos should be shown to a jury.
If, for example, the only issue in a murder case was whether the accused was the person who committed a murder, showing jurors disturbing photos of a dissected body would likely serve no purpose.
If, however, the issue was whether the amount of force used in self-defence was excessive, it might be very important for jurors to see images of a fatal injury.
In the case discussed, the number of photos was reduced by agreement, and the judge ordered that a particularly disturbing photograph that included late stages of the autopsy dissection be cropped to only show the injury at issue in the case.
Follow this link for a transcript of the show and links to the cases discussed.
This is time for our regular segment with Barrister and Solicitor with Mulligan Defense Lawyers. It's Legally Speaking on CFAQ's 1070 with Michael Mulligan. Morning, michael. How are we doing? Good morning, i'm doing great. Always good to be here. Lots of interesting stories on the docket for today. Up first I'm reading a small claims penalty for proceeding to trial with no reasonable basis for success. Set this one up for us.
Michael Mulligan:Yeah, so if you sue somebody in the Supreme Court, that is, for an amount of money more than $35,000, and that might be a useful bracketing The way it works in BC is that for claims of less than $5,000 or $5,000 or less, you can now sue in this thing called the Civil Resolution Tribunal. It's like an online PayPal settlement sort of setup. For claims between $5,000 and $35,000, you can sue in small claims court and provincial court, and for claims of more than $35,000, you would go to the BC Supreme Court. If you're suing for a larger claim in Supreme Court, we have a thing that we've talked about before called costs, and the way that works is, if you sue somebody and you're successful, you can get costs awarded against the person, which would cover part of your legal fees and the expenses involved, the litigation, whatever photocopies or serving people, whatever it might be. Conversely, if you get sued in Supreme Court and you are successful in defending it, the person who sued you improperly or unsuccessfully can be ordered to pay you costs, and so part of what's going on. There is sort of a fairness element right, if you are sued meritoriously, you should pay up, right? Or, conversely, don't sue people unless you've got a good basis to do so.
Michael Mulligan:But in small claims court we don't have that same system, and the reasons for that would include, first of all, the claims are for a smaller amount of money. Second of all, many people would be unrepresented going to small claims court. They don't have a lawyer and people could make mistakes or not know the law, that kind of thing, and so we don't have that cost penalty built into the system. But a recent case highlights a thing that we do have in provincial court, which can involve the judge imposing a penalty of up to 10% of the claim on one side or the other if they proceed with no reasonable basis for success. And I should say in that regard, in small claims court there are several steps. People would start by going to a thing called a settlement conference, where a judge who would not be the trial judge would try to get the people to resolve their claim or offer some insight into legal issues, and so it's not a matter of somebody's coming in and not having any idea. There's been at least some insight provided by the system prior to a trial, and the case that caught my attention dealing with this issue of a penalty imposed, was a case involving a claim made for alleged electrical problems in a house that a couple purchased, and the couple that purchased the home claimed that there were various electrical problems. They claimed that electrical outlets were protruding from the siding. They claimed that one smoke detector was not plugged in properly and not working. They claimed that an exhaust fan didn't exist in a bathroom and the hood fan in the kitchen wasn't exhausted outside. Those were the things they complained weren't proper And they sued originally for $35,000 and presented some invoices that said things like for renovations to kitchen and ensuite. Now the claim itself turns on.
Michael Mulligan:First of all, the issue of well, what is the expectation when you're buying or selling a home And the way that works is that there are really two categories of possible defects that are problems with a home. From a legal perspective, one could be a kind of defect which would be called a patent defect, a kind of defect that anyone who reasonably inspects it or looks around could see for themselves or, like a reasonable building inspector, could identify. A latent defect would be something hidden that you couldn't determine, even if you diligently looked about. In the case that was just decided, the people who bought the home decided not to have any form of inspection done at all when they purchased it. Thank you. The judge pointed out that several of the things that were being claimed here were that category of patent defects, things that would just be apparent to anyone who looked carefully, like the outlets protruding from the siding. You don't need to be an expert, you just see that right. Or you can say turn on the fan to go outside, or hey, that light on the smoke detector isn't on. And so the general principle of sort of caveat importers or buyer beware applies to those kind of patent defects, things that you could reasonably see or determine.
Michael Mulligan:Now, defects that are latent, like hidden ones, are dealt with a slightly different way, and the way those can be dealt with is if the person selling the home knows about the hidden problem like, let's say, they know about I don't know, all the wood in the wall is rotten or something. They know that for some reason, and they falsely claim that there's no problem here. Right, and the way that can come out is real estate agents will ask people to sign these disclosure forms when they're selling a property, saying things like I'm not aware of any problems or there weren't renovations done without a permit, things like that, and that form gets folded into part of the contract. And so if somebody's selling a property, he chooses to fill out that kind of a form say, that's not a requirement but it's common then if the purchaser can prove that the seller knew about a problem and fraudulently claimed there was no problem, they could wind up on the hook for it right. So that's the difference in terms of how patent and latent defects are dealt with and how those kind of hidden things can turn out to be a basis to sue somebody if you could prove that the person selling the home knew and lied about it right to get you to purchase the home right.
Michael Mulligan:Here, however, the judge ultimately found that what was going on was that, first of all, some of the problems were just obvious. They just didn't bother looking at them, like the plug sticking out or the light not on on the smoke detector. Furthermore, the judge found that there was no basis to conclude the people selling the home had lied or fraudulently claimed that things were fine when they weren't. And ultimately, the judge found that the people suing that bought the home were simply doing renovations on the home and trying to get somebody else to pay for them. Right. But to come to that conclusion. It took three days at trial. There had been two of these settlement conferences, and so the people that sold the home had spent all kinds of time defending this claim The judge found had no merit whatsoever, and so the judge applied.
Michael Mulligan:The rule we mentioned to the outset is actually rule 20 sub five, which allows a judge to impose a penalty and small claims court of up to 10% of the value of the amount that was claimed with no reasonable basis for success, and furthermore, that 10% can apply to each of the people that you, for example, sued in a claim that has no hope of success. Interesting, in this case, if you sue two people, like the husband and wife who own the home, both could be awarded that kind of penalty, and that's what the judge did here. So the judge found that the people who bought the home were just making this claim trying to get these poor people who sold the home to pay for their renovations. There was no basis for that claim. It had no, it was utterly without merit, and these people spent three days plus the other time defending it. And so what the judge did was award $4,000, $2,000 each to the poor people who sued or sold their home to the individuals who tried suing them to have their renovations paid for.
Michael Mulligan:And so people should be aware of that, that even though in small claims court we don't have the full regime of costs which would cover some legal expenses and your, you know, out of pocket costs of defending a claim or bringing a claim, we do have rule 20 sub five, and so you should neither bring a claim that has no hope of success Just, you know, it's not a lottery ticket, you're not sort of putting it in and saying, hey, maybe I'll, you know, befuddle the judge and get money for my home patients And, furthermore, if you're somebody who is making it, make a counter claim or reply to something and again with no basis for success, you may wind up with a penalty award against you.
Michael Mulligan:And so there's a little bit of a stick there, and the point is don't bring a claim that has no merit, or you may. You may wind up not only failing to get what you're asking for, but you may walk away with a bill, as the people did here. So that's the outcome of the penalty provision and why you shouldn't try suing when you discover your smoke detector doesn't work, if that was a plainly apparent before you bought your home.
Adam Stirling:Michael Mulligan with Mulligan Defense Lawyers, legally speaking, will continue on CFAG's 1070 right after this break. Back on the air here at CFAG's 1070s. We continue legally speaking with Michael Mulligan, with Mulligan Defense Lawyers, google and Apple in our next story. Michael and I would assume that they have the ability and the resources to retain whichever counsel they wish, so it's always interesting when I see them come up in one of these stories.
Michael Mulligan:That's true And, looking at the style of cause, it looks like they hired several counsels so not to limit their options on that front. Indeed, the particular case is a brand new case out of the BC Supreme court and it's a case that's a spark event rentals limited, a BC company attempting to sue Google and Apple, and the claim involved a claim of alleged overcharging for Google ads. Right, you can purchase ads on Google and they would get paper, i guess, clicked on the ad. And the particular issue involves what? the long agreement that everyone, i'm sure, is used to clicking on anytime you want to do anything with a computer these days? right, if you want to download something or install something, you're going to have those long things that you need to agree to to be able to do anything. Right, and the, in this particular case, the Google agreement to purchase those online ads, along with whatever else is in that thing included, a agreement to use arbitration for any claim you might make against them. And I should say, first of all, those agreements are often ridiculous. I think Seinfeld you can quote them said you could insert the entire text of mine comp into the agreement. Everyone would click away. I agree, i agree, i agree in order to get on with their email or whatever they want to do.
Michael Mulligan:But the reason that the large companies would insert an arbitration clause into those large agreements would be, honestly, to make it much more difficult to sue them. Because, first of all, in British Columbia, we have legislation the International Commercial Arbitration Act that, when there is one of those clauses, makes it mandatory for a judge to dismiss a claim where somebody's trying to sue, right, with only very narrow exceptions for things like unconscionability or something being contrary to public policy a very high threshold. And, of course, if you can stop people from suing you if you're Google, that also stops them from suing you as starting a class action right. And so that's very appealing, because the economics of spark event rentals limited. Suing Google over how much they paid for their online ad is not going to be an economical matter to pursue on its own right. And, moreover, while there is some disagreement in this case about how many thousands of dollars it would cost to have an arbitration, which would occur in California, by the way, as a result of the wording of the contract, it meant that, practically speaking, if this clause was enforceable, the spark events rentals was basically out of luck, right, it just wouldn't be worth spending, they thought, between $5,000 and $13,000 to hire an arbitrator. Go to California and argue your case over whether you got overcharged for your online ad. Right, it's all going to be worth that much, right? Interesting, yeah.
Michael Mulligan:And so the lawyers for spark event rentals argued a case involving Uber a person who tried to sue Uber in which the Supreme Court of Canada found that an arbitration clause like this one was not enforceable because the cost of the arbitration amounted to what the Supreme Court of Canada found to be a brick wall that economically prevented the individual in that case from initiating arbitration. Right, if you're suing somebody for $1,000 and it costs $5,000 to start the process, well, you can't do that. It doesn't make any sense, right? But so that's what the lawyers for the DC company were arguing. Unfortunately for them, the judge concluded that this was not like that Uber case, and the judge pointed out that, because spark event rentals limited is a company and not some individual, the same sort of analysis about whether what was going on there was unconscionable did not apply.
Michael Mulligan:The judge found that there wasn't evidence of the financial capacity of spark event rentals limited and so allowed Google to rely upon that BC International Commercial Arbitration Act to have the claim against them struck out in court, and so it meant that the only way that could be pursued would be going to California and hiring the arbitrator to deal with it, which was not economical, and probably a circumstance where it would not be economical for any individual to do it. It would only make sense, if there is that kind of a, if there is a legitimate problem, for it to be dealt with as a class action rather than as a one off event. And so I suppose what people should think about is should we have that in our BC legislation? Should we have something like the International Commercial Arbitration Act in BC? Or, if we are to have something like that, should there be greater discretion to determine whether it's an appropriate thing to permit? Because with this kind of a decision, it's obvious if you're any large company, what you're going to do is you're going to insert these clauses everywhere you can possibly find one, and preferably pick the most expensive, difficult place to pursue your out of court arbitration, because that's basically going to prevent anyone from successfully suing you. And so we have control over that, And the way we could, in British Columbia, control that would be to repeal or modify the International Commercial Arbitration Act so that you wouldn't allow large companies to insert in their giant service agreement clauses that prevent them from being sued, because in some cases and perhaps this is one of them the result of that is going to prevent, practically speaking, a fair hearing into whether what was going on was proper or not.
Michael Mulligan:And so, as a result of this clause, of this case, we won't know whether the spark event rentals got overcharged, or indeed whether there were hundreds or thousands of small businesses in British Columbia that were overcharged, because Google is able to hide behind the arbitration agreement, which is in the giant terms of service that somebody would have to click on if you want to do business with a company large enough to have such things. And so I guess the lawyers who are defending the claim go back to drafting similar agreements or components of agreements. But we should think about whether we should permit that, because to my mind, that doesn't seem like a very fair or just outcome, and it's not one we're stuck with, it's just one that we have because of the legislation we've chosen to adopt in British Columbia.
Adam Stirling:Indeed, so the legal question answered the political question with respect to policy remaining a live issue.
Michael Mulligan:Yeah, that's right. I mean, that's the outcome in that case, but that will get, i'm sure, referred to in any future case where there's a company trying to sue saying, well, hold on, this isn't like the individual in the Uber case, and so again, we could fix that right. It's as with many things. Well, it's just a policy choice as well. Do you want that kind of a provision to be permissible? The upside would be, i guess, fewer cases in court, right, and I suppose if you have people with actual equal bargaining power that want to come to a agreement, that they'll settle in the dispute by arbitration or something. That may be great, right, but I suppose the You know that can be fast and efficient.
Michael Mulligan:But when you've got reliance upon these sort of uh, all the large virtual monopoly players in a particular market we're agreeing to that and a bunch of other terms drafted by the large corporation, is a prerequisite to proceeding. You know, to use what you'll fill in the blank and Apple device or, you know, windows or Google or any of these things. Uh, you know, we need to think about whether we want to provide that kind of legal cover for those kinds of agreements that, frankly, nobody is reading. And if they did read them, there'd be no chance of doing anything about it. It's either a click, i agree, or you don't get to use fill in the blank, uh provider.
Adam Stirling:We have four and a half minutes left, and the next topic I find to be a very interesting one. Of course, you've told us any number of times that you serve as criminal defense counsel, and because of that and because of the nature of that work, courts are forced to engage with material and evidence that can be very disturbing to consider and yet must be carefully considered all the same in order for a fair and just outcome to be reached. Set this up for us.
Michael Mulligan:Yeah, you're right, uh, and I should say, those of us who do this kind of work I suppose, sort of like somebody who's a, you know, a medical doctor or somebody, in this case, performs autopsies are going to become kind of, uh, professionally numb to the impact of some of the material that we'd be dealing with. Um, and this particular decision is a decision dealing with uh, whether and how uh jury in a murder case ought to be shown uh, photographs of an autopsy. Um, and I must say, well, there are a long list of reasons why somebody doesn't want to be murdered. One of them would include you're going to have a bunch of autopsy photos, potentially presented in open court, which may not be the most flattering uh, but we we shouldn't lose sight of the fact that for jurors, right, who may have never seen things like that uh before, some of the images could be genuinely shocking and disturbing, right, yes, yes, uh. And so a judge in a jury trial, uh has, and I should say even a judge alone trial for their own purpose. Uh has an obligation to determine whether evidence is more prejudicial than it might be probative of an actual issue in the case, right, And not to allow potentially prejudicial evidence in that has little probative value.
Michael Mulligan:Uh, and so, with respect to autopsy photos, there are some murder cases where the autopsy photo may be highly relevant, right. For example, if you had a case involving you know whether somebody was acting in self-defense or the amount of force used, right, a picture showing the, the injury or where it was, it might be very important to determining that issue. Right, and so highly probative. But in another circumstance, let's see, you had a murder case where the only issue was the identity of the person who committed the murder. Was this the right person? Right, the autopsy photo might have no value whatsoever, right? Um, and so you would not want to present to the jury a bunch of gruesome autopsy photographs because they serve no purpose, right, they would just be harmful or inflammatory and wouldn't do anything to show who committed the murder, right? Uh, and so In this particular case, there was some relevance to it because there was an alleged fight and then somebody intervening allegedly with a hammer, striking, in the crown's view, a fatal blow, and so where the blow was and how hard it was, and so on, would be a relevant factor.
Michael Mulligan:And so in this case, happily, the lawyers involved sorted out virtually all of the disagreement about what photos should go in, not to put hundreds of photos before the jury of the autopsy, which the courts has pointed out before. Even if one photograph might be highly probative, you don't need to put hundreds of the same thing before a jury. It might not advance things at all. And so there was only a single photograph, which was that issue. It was a photograph that was very graphic It was taken at the late stage of the autopsy where you can see the face of the deceased, of abdomen opened all the way up and scalp removed gruesome, right, yes, and perhaps going far beyond what would be important Where was the actual injury and how hard was it, for example?
Michael Mulligan:And so here the conclusion was that that picture was relevant because it showed the injury, but the remedy the judge fashioned was to crop the image so that it was showing the relevant injury and not things like the abdomen opened up in the autopsy or the places where there had been incisions that were gruesome, as part of the autopsy process. And so that was the ultimate outcome, which I think was the correct one here. But the legal takeaway for people is judges do have that screening obligation to determine if evidence is more prejudicial than it might be probative of something, and so that would apply to this unfortunately not uncommon issue in murder cases, which would be just what autopsy photos are you going to present to these poor members of the jury? And that's how the issue was solved in this particular case.
Adam Stirling:Michael Mulligan, with Mulligan Defense Lawyers, legally speaking during the second half of our second hour every Thursday. Thanks so much, thanks so much. Have a great day, all right, you too.