Litigating wrongful dismissal claims not for ‘the faint of heart’

By Tony Poland, LegalMatters Staff • As an Ontario Superior Court judge recently wrote, “litigation is an expensive business. It is not for the risk-averse or the faint of heart. There are winners and there are losers.”

Parties should objectively assess the evidence and also the potential costs and benefits of pursuing a wrongful dismissal case. Losing comes with a cost, and sometimes even a victory can be a pyrrhic one, says Toronto-area employment lawyer and mediator Stuart Rudner.

Rudner, founder and managing partner at Rudner Law, points to Goruk v. Greater Barrie Chamber of Commerce, a recent Ontario Superior Court of Justice ruling that saw a terminated employee assessed more than $143,000 in legal costs after losing her wrongful dismissal case. That is in addition to her own legal costs.

Price to be paid for failing to prove case

He says although the court found the employee had “a reasonably compelling” case, in the end, she failed to prove her claim and a price had to be paid.

“As they say, close only counts in horseshoes. In this case, she was close to winning. However, you either win or you lose and when you lose, there are going to be cost consequences,” Rudner tells LegalMattersCanada.ca. “One of the principles of our legal system is that victorious parties are entitled to be reimbursed for some of their costs. That comes out of the pocket of the losing party.” 

He says the case illustrates the importance of understanding the risks that accompany litigation.

“It’s your lawyer’s job to ensure you understand the potential risk. You must assess your options and do the cost-benefit analysis,” says Rudner. “Some cases are not going to justify pursuing litigation. It can make more sense to negotiate and see how far you can get. You can look at alternative dispute resolution options, which can be less costly than litigation. But you always have to be mindful of the downside and the risks.”

He says it is not just the financial cost of taking a claim to court. 

“You have to factor in the time and stress of litigation along with the uncertainty of the results,” Rudner explains. “This case is a perfect example. She had a credible claim. She had to weigh the odds of winning and the potential costs of losing. Presumably, she made her decision with full knowledge of the potential risks.

“We always remind our clients there are no guarantees. Sometimes it really does depend on which judge you get as to what the outcome will be,” he adds. “We give every client the potential best- and worst-case scenarios and then a likely outcome. We make sure they really understand what it all means. Then, they can make an educated decision.”

Plaintiff sought $840,000 in damages

In Goruk v. Greater Barrie Chamber of Commerce, court was told the plaintiff was seeking almost $840,000 in damages, “including aggravated damages of $200,000 to compensate her for the unfair and unduly insensitive manner of her dismissal” along with punitive damages of $500,000, “arguing that the Chamber’s conduct was malicious, oppressive and high-handed, thus warranting the court’s condemnation.”  

Rudner, who was not involved in the case but comments generally, says the potential payoff can be a deciding factor when considering litigation.

“You always have to consider the potential upside. It may make sense to spend $15,000 where there is a good chance of recovering $50,000, but even if the case is strong, it may not be worth pursuing if it’s only worth a nominal amount. There are really two types of cases. There is a wrongful dismissal case where the only real issue is the amount of severance owing. It is not a question of if the plaintiff is going to recover damages, it is how much,” he says. “But if it’s a just cause case like this one, it’s a question of whether you get anything at all or whether you lose and end up out of pocket because you have to pay your lawyer. And, of course, the other side’s lawyer.

“There can be huge potential consequences. That’s why when we meet with any individual with a potential claim, we do much more than a superficial consultation,” Rudner adds. “We go through a detailed strategy session. We discuss the case in-depth, we explain how it works, and then we look at the different options available to them, along with potential costs and benefits.”

‘How much will it cost me?’

He says there are always two questions clients ask when pursuing a claim: “How long is it going to take and how much will it cost me?”

“Of course, it is almost impossible to predict either of those but you have to make some educated guesses and also assess what the potential payoff is going to be,” Rudner says. “If that payoff is only going to be $10,000 it is not going to be worth spending a lot of money going to court. If the potential is close to a million dollars then it may justify more time and money invested.”

He says it is important not to make a rush to judgment in any situation.

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“Often when you have the initial meeting with the client, you are getting their version of events. You are going to see the evidence they produce. You might think the case has an 80 per cent chance of success,” says Rudner. “Then, when you get the evidence from the other side and perhaps have examinations for discovery, the case might be weaker than it first appeared.

“Cases evolve. That is why as counsel, we are always assessing the odds of success and keeping our clients informed about any changes or any issue,” he adds. “At any point, you can try to resolve it and not blindly submit to continuous litigation.”

Rudner says clients often tell him that, “It is not about the money, it’s about the principle.”

“We ask how much their principles are worth,” he says. “If someone is considering a claim, they have to assess whether they are willing to pursue it even at the risk of losing and being out of pocket for a significant amount of money.”

Losing your job can be an emotionally charged time

Making a rational decision after something as emotionally charged as losing your job can often be difficult, Rudner says.

“You have to put your pride aside, you have to put emotion aside. People are obviously upset when they lose their job,” he says. “You may feel you were treated unfairly but you have to put those emotions aside and make an objective decision based upon an analysis of cost and benefits. What is best for you and your family?”

While money is a “huge factor” in deciding to go to court, it is not the only consideration, Rudner says. 

“There’s also the stress and the anxiety of litigation. We have many clients who are already suffering from significant stress and anxiety. They may not be able to go through the litigation process, he says. “That is something else that should be factored into any decision. It’s a critical point. 

“We have had some clients who have told us quite bluntly that they want us to negotiate the best deal we can. We can threaten litigation but they are not actually going to go ahead with it because they just would not be able to take it.”

Rudner also says it is not enough to think you are right, you must prove it.

‘How strong will your case be?’

“That is a really important point. Will the evidence be there? Even if you were being bullied or harassed in the workplace, will the people who were witness to it come forward and testify or are they too scared about losing their job? If that is the case you may not have the evidence to succeed,” he says. “When I talk about weighing cost and benefit, that is part of the analysis. How strong will your case be?”

Rudner says lawyers generally strive to give a realistic analysis of a claim.

“Hindsight is always 20/20. We are certainly transparent as far as evaluating how things will go,” Rudner says. “As counsel, we have a duty to consider the evidence and to give our clients a realistic assessment of how strong their case is while also making it clear that things may change as new evidence comes to light.

“It comes back to choosing the process when pursuing a claim. Does it make sense to proceed in civil court or to simply try and negotiate the best you can? Or does it make sense to take advantage of mediation or arbitration?” he adds. “Unfortunately, as a mediator, I sometimes see cases where a plaintiff is in over their head, and have come to realize that their case is weak and they may end up losing money if they continue.”

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