COVID-19 brings new risk to the litigation landscape

David Outerbridge has spoken with Daily Commercial News about the impact of COVID-19 on litigation proceedings following the release of the latest edition of the Torys Quarterly.

The Daily Commercial News article which discusses the current economic slowdown in the North American construction sector also draws insight from Torys’ Q2 Quarterly piece “Changes to litigation risk in a new economic environment”.

David told the publication that secured creditors who have a mortgage or some security over equipment on a site could commence litigation proceedings.

“A situation might arise when a party simply needs cash because of the pandemic and they’ll settle earlier because it will increase their cash flow,” David said.

David also highlighted obstacles those who wish to pursue litigation in the current economic environment may face, noting “if you decide to pursue litigation instead of settling right now, you may not get a judgement for a year or two, depending how long the process takes.

“Likewise, if they are having solvency issues themselves, they might be pressured to settle,” he said

“Even then, you have to enforce your judgment. The risk that the party might not be solvent at that time down the road is the bigger issue.”

“Changes to litigation risk in a new economic environment” is part of the Q2 Torys Quarterly which focuses on corporate recovery strategy. It was authored by David Outerbridge, Sylvie Rodrigue and David Wawro.