Litigation trends remain steady in Québec

Much like the rest of Canada, Québec’s litigation landscape has yet to slow down as we near the two-year mark of COVID-19.

“The court system has dealt with the pandemic very well in general. Urgent matters have been dealt with,” Torys Montréal partner Christopher Richter told Lexpert in its Special Edition on Litigation magazine.

Christopher said that force majeure claims will continue to arise as business is interrupted. In Québec, force majeure is an implied term of contracts.

“Whether it’s for cancellation of products or services or events, or postponements or late deliveries, we’ve seen a lot of those kinds of contract disputes, and they tend to get worked out based on the particular wording of the contract, and of course, the relationship between the parties,” he said.

While the markets have been healthy and M&A activity has been high, there is a percentage of transactions that still have a problem closing.

“During the stresses of the COVID period, we’ve certainly seen some of those, and the oppression remedy that’s available now in Québec is an interesting new twist to those kinds of commercial and corporate disputes,” Christopher explained.

“Now, the oppression remedy gives claimants additional rights to be treated fairly according to their reasonable expectations. That’s opened up new scrutiny for boards of directors and management.”

Read: Torys’ litigators give us their analysis of the latest trends in their annual Litigation Trends 2021 report.

The pandemic may also have drawn greater attention to the importance of company disclosures of risks. With increased scrutiny, Christopher said there’s a desire on the part of investors—both target and acquirer—to make sure that managements do a proper analysis, despite the very rapid evolution in the market sometimes.

Litigation funding is quite active, and volatility in the markets has created more opportunities to make claims. The number of transactions has also meant there’s a greater number of possible claims out there.

“In the corporate area, if you’ve got a more active market and more volatility, then there’s going to be more disputes as well,” he added.

In another Lexpert article, Christopher pointed out that regulators are also ramping up at this time.

“I would have thought that the pandemic would have slowed down the regulators because everyone’s working from home [and] a lot of institutions have struggled to keep up; but our regulators have been quite active, maintaining their activity levels and their enforcement level. So, we’re still having to respond to all kinds of inquiries, particularly from the Autorité des marchés financiers,” he said.

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