Ontario Lawyers: New Rule 48.14: Counterclaims, Crossclaims, and Third Party Claims Will Also Be Administratively Dismissed

This article is by Ian Hu, claims prevention and praticePRO Counsel at LAWPRO.

We have received inquiries regarding whether a defendant’s counterclaim, crossclaim, or third party claim is also dismissed when the main action is administratively dismissed under Rule 48.14. The answer depends on the kind of claim. The defendant’s counterclaim and crossclaim will be automatically dismissed unless certain steps are taken within prescribed timelines. In the case of a crossclaim against the defendant, the dismissal order will need to be served on the crossclaimant. See the analysis below.

As we know, Rule 48.14(1) sets out the circumstances under which an action may be dismissed for delay. Actions that are not set down for trial within 5 years of commencement will be administratively dismissed without notice. Actions commenced prior to January 1, 2012 have until January 1, 2017 to set the matter down.

Counterclaims, crossclaims, and third party claims are dealt with under Rule 48.14(9), which states: “Rules 24.03 to 24.05 (effect of dismissal for delay) apply to an action dismissed under subrule (1).” This requires us to cross-reference Rules 24.03 to 24.05.

Let’s start with counterclaims, which is dealt with under Rule 24.03:

24.03 Where an action against a defendant who has counterclaimed is dismissed for delay, the defendant may within thirty days after the dismissal deliver a notice of election to proceed with the counterclaim (Form 23B), and if the defendant fails to do so, the counterclaim shall be deemed to be discontinued without costs. R.R.O. 1990, Reg. 194, r. 24.03.

This means when an action is dismissed under Rule 48.14, the defendant’s counterclaim will be dismissed without costs within 30 days absent a notice of election to proceed.

Crossclaims and third party claims are dealt with under Rule 24.04(1):

24.04 (1) Unless the court orders otherwise, where an action against a defendant who has crossclaimed or made a third party claim is dismissed for delay, the crossclaim or third party claim shall be deemed to be dismissed. O. Reg. 394/09, s. 10 (1).

(1.1) Where an action against a defendant against whom a crossclaim has been made is dismissed for delay, the crossclaim shall be deemed to be dismissed thirty days after a copy of the order dismissing the action is served on the crossclaiming defendant under rule 24.02.1, unless the court orders otherwise during the thirty-day period. O. Reg. 394/09, s. 10 (1).

This means when an action is dismissed under Rule 48.14, the defendant’s crossclaim and/or third party claim is dismissed at the same time. If the defendant is also defending a crossclaim, that crossclaim will be dismissed 30 days after the order dismissing the action is served on the classclaimant.

LAWPRO’s Rule 48.14 Transition Toolkit can help you navigate the new Rule 48.14 and avoid an administrative dismissal. The toolkit provides an analysis of Rule 48.14 and the relevant deadlines and timelines. We looked at why files stall and what you can do to prevent dismissals. A firm transition checklist can help you put in place firm-wide policies to ensure files do not slip through the cracks, and an individual file checklist can be used to ensure each individual file is properly tickled. A file progress plan can help you keep on top of all the steps in a litigation file, and is pre-filled with the basic steps

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