Could a Law Firm Be Vicariously Liable for the Actions of a Lawyer Practicing “In Association”?

3 May 2018

By Uri Snir

In Wallbridge v. Brunning, the Court of Appeal for Ontario set aside a summary judgment granted in favour of the defendant partnership of lawyers, Williams Litigation Lawyers (“Williams”). By sending the issue of Williams’ liability to trial, the Court of Appeal has potentially opened the door to a law firm being found vicariously liable for the actions of a lawyer who practices “in association” with it.

Background: The plaintiff partnership of lawyers, Wallbridge, Wallbridge (“Wallbridge”), brought a claim alleging the defendant lawyer, Fay Brunning, made a series of defamatory comments about Wallbridge. Wallbridge named Williams as a co-defendant, claiming it is vicariously liable for the defamatory conduct of Brunning.

Brunning has her own practice, but shares an office, telephone number, fax number, and front desk receptionist with Williams. Brunning’s name also appears (with an asterisk) on Williams’ letterhead, alongside the other Williams lawyers. The letterhead references her “Practicing in Association, not in Partnership.” Similarly, Brunning’s email signature states that she was “Practicing in Association with Williams”, with Williams’ logo displayed prominently below. Williams’ website includes a photo of Brunning, under the “Our Lawyers” and “Meet Our Team” sections. On the website, Brunning is identified as “Lawyer, Practicing in Association”.

Most of the allegedly defamatory correspondence sent by Brunning used Williams’ letterhead. Williams claimed to have no knowledge of the allegedly defamatory correspondence. It brought a motion for summary judgment seeking dismissal of the action as against it.

The Motion Judge’s Decision: The motion judge awarded summary judgment in favour of Williams, finding that Williams could not be held vicariously liable for Brunning’s allegedly defamatory correspondence.

The motion judge found that Brunning is not a partner, employee or agent of Williams. According to the judge, Brunning’s relationship with Williams is a space and cost-sharing agreement only, and Williams took steps to identify its relationship with Brunning on its letterhead, email template, and website.

Furthermore, the motion judge found that Williams did not control the conduct of Brunning. Although Williams authorized Brunning’s use of its letterhead and email templates, it did not specifically authorize or even know about the allegedly defamatory statements made by Brunning. Wallbridge appealed.

The Court of Appeal Reverses: The Court of Appeal allowed the appeal and set aside the lower court’s decision. Given the strength of the evidence that could support a finding of vicarious liability, and given the novelty and importance of the question, the Court of Appeal concluded that the motion judge should have refused summary judgment.

The issue of whether a law firm could be held vicariously liable for the actions of a lawyer practicing “in association with” it is without precedent. This is a novel question with potentially far-reaching policy implications. As such, the Court of Appeal held that it is not in the interests of justice to decide the question on summary judgment. Allowing the issue to proceed to trial would allow it to be decided on a full evidentiary record, where “the consequences of imposing liability on the respondent can be carefully considered.”

In its decision, the Court of Appeal noted that the motion judge failed to give due consideration to the evidence that could support a finding that Williams should be liable for the allegedly defamatory correspondence. In particular, Brunning’s use of Williams’ letterhead to send the allegedly defamatory correspondence was fully authorized. By granting Brunning a complete and uncontrolled licence to communicate using its letterhead, Williams created the opportunity and took the risk that Brunning could use its letterhead to publish defamatory material. Williams could have avoided being implicated in Brunning’s conduct by refusing to allow her to use its letterhead.

The Takeaway: This will be an interesting case to watch. As the Court of Appeal itself noted, the determination of this novel question of law could have far-reaching implications.

It is also worth considering that while “practicing in association” with other lawyers or law firms may be a term of art, this could mean varying forms of association including mere space sharing to client referral arrangements. It is not clear that a ruling against Williams would affect firms who simply engage in a cost sharing or resource sharing arrangement.

Certainly, the Wallbridge decision suggests that law firms and partnerships should carefully consider the risks of allowing lawyers “practicing in association” to use their letterhead, email templates, and marketing materials.

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