COVID-19 FAQ

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Q: Does my company have to agree to accept reduced or delayed payments from customers because the COVID-19 pandemic is so serious?

A:  From a business relationship perspective, it may be sensible to negotiate modified payment terms but your strict legal rights will be determined by the specific contractual arrangements in place between the parties. Absent specific language, most commercial contracts will entitle you to insist on full payment and on time regardless of your customer’s circumstances arising from the pandemic. Any agreed alteration to your contractual arrangements should be clearly set out in writing and specify whether payments are being forgiven or only deferred – and for how long – so there is no inadvertent waiver of a right to claim full payment at some future time.


Q: With the effective closure of the BC courts for all but the most urgent matters, how can I resolve my business dispute without waiting for the courts to reopen?

A:  Mediation and arbitration are effective private procedures that can be used to resolve disputes in a timely and cost-effective way and in a manner that complies with all appropriate health and safety guidance. Mediation is essentially a settlement negotiation facilitated by an independent mediator who attempts to bring the parties to an acceptable compromise. If no agreement is reached, all of the negotiations and offers made are privileged and cannot be used by either party in the litigation going forward. Conversely, an arbitration is a private, streamlined trial of sorts which is held before a neutral arbitrator (usually a retired judge or senior lawyer agreed to by the parties). Most of the evidence is tendered in written form by way of affidavits although certain key witnesses may be cross-examined if necessary. The decision is binding on the parties like a regular court judgment and is subject to appeal to the BC courts only on very limited grounds.


Q: I have a claim that I have been sitting on for some time and know there are time limits on filing such claims with the courts. Is everything on hold right now?

A:  While some provinces, such as Ontario, have recently passed laws to suspend the running of  “limitation periods” to start lawsuits, as of now, BC has not yet done so which means the clock to start an action in the Province is still running and your claim could be “time barred” if it is not filed in time. BC courts allow for the electronic filing of legal documents (which some other provinces do not) which may account for the current discrepancy in approaches. In BC, most claims are subject to a two year limitation period but there can be complex questions regarding just when the clock begins to run so each situation will be different. It is important to seek timely legal advice concerning any claims that have been withheld up to this point.


For more legal analysis of how COVID may affect your business, or personal affairs, visit Clark Wilson’s COVID-19 Resource page