The rush to sue

IVOR SHAPIRO March 30 1998

The rush to sue

IVOR SHAPIRO March 30 1998

The rush to sue




"Im prepared to recommend 1.6 million,” Harvey Strosberg, QC, tells the other lawyer as they step off a Dash 8 commuter aircraft onto the tarmac in Toronto. He means dollars, of course, and this tarmac suggestion to his opposing counsel is only the latest gambit in the quest—central to almost any lawsuit—for the magic number (affordable to the defendant, acceptable to the plaintiff) that will settle it all. In this case, the defendant is the government of Canada (which can afford much); the plaintiff—Strosberg’s client—is an unemployed former secretary, Dorothy Edgar, 69, who helped Revenue Canada in a fraud case and now claims she was deprived of a promised reward. How close is $1.6 million to the magic number? The government’s lawyer, Toronto litigator Julie Thorburn, offers no clue as she nods without breaking her stride into the terminal. “One point six? I’ll get back to you. Will you be at your Toronto number tomorrow?”

Well might she ask. The day before, Strosberg had been in Ottawa addressing justices of the Supreme Court of Canada. That day, Thursday, in Windsor, he had cross-examined Thorburn’s first two witnesses. Friday, in Toronto, he would preside over the convocation of the Law Society of Upper Canada. Saturday: back in Windsor, preparing papers for a class action against officers of failed mining company Bre-X Minerals Ltd. and the investment analysts who had touted its ill-fated stock—one of three big-money class actions currently on his desk.

Strosberg’s clients have included Bobby Orr (against Alan Eagleson), the federal government (against Brian Mulroney) and the government of Ontario (against the three surviving Dionne quintuplets). But this $400an-hour lawyer says he sees himself as the scourge of big business and defender of the unfortunate—people like Dorothy Edgar and the ruined Bre-X stockholders. Last October, Strosberg won a record $24.2 million for patients, hospitals and health ministries affected by a defective pacemaker device made by a subsidiary of transnational Pacific Dunlop Ltd. That class action, with its $6-million court-approved legal fee, cemented Strosberg’s reputation in Canadian law—a stage usually dominated by criminal lawyers and appeal judges. But Harvey Strosberg, tort man extraordinaire, is a lawyer whose time has come.

Not long ago, Canadians could be excused for thinking of big-money tort litigation as something Americans did. (Torts are wrongful acts, whether negligent or intended; unlike crimes, which are prosecuted by the state, torts are prosecuted by the victims with a claim for damages.) The undisputed “King of Torts” was Melvin Belli, the famed and flamboyant U.S. personal-injury man. Yet sometime in the 1970s, Canadians started suing one another more often, and with more success. Lawsuits against doctors rose from 80 in 1970 to 906 in 1985. “Very seldom do patients or family members say any more, Too bad Aunt Elmira died in hospital but I guess that was the will of the Lord,’ ’’ says Toronto defence lawyer Michael Royce. “Instead, they order a copy of the hospital chart, go to the coroner and approach a lawyer.” One consequence for doctors: spiralling malpractice insurance premiums, which rose 11.5 per cent at the beginning of the year.

Harvey Strosberg is trying to revolutionize Canadian law

An agenda for action

Among Harvey Strosberg’s current and recent cases:

A class action against the officers and directors of the failed Bre-X mining venture, and against the analysts who lauded its stock

— Awaits certification (court permission for a class action to proceed)

A class action against the Canadian Red Cross and 11 governments on behalf of people who contracted hepatitis C from tainted blood

—In beginning stages before application for certification

A class action against the big four Visa-issuing banks over credit-card charges in foreign currencies

— Awaits certification

Helped defend the federal government against Brian Mulroney’s Airbus libel suit

— Settled in 1997 for an apology and the former prime minister’s legal costs of $1.2 million

A product-liability class action against New Zealand-based transnational Pacific Dunlop over an Accufix device that connects a pacemaker to a heart

—Settled in 1997 for $24.2 million

A suit against the city of Windsor and friends of Derek Alchimowicz for failing to stop him from diving from a dock into shallow Lake St. Clair waters while drunk

—Tried and lost in 1997, under appeal

And the incentive to sue grows with every big tort award. A new era began in October, 1988, when 17-year-old John Stein was paralyzed from the neck down after slipping on a patch of thin ice at a municipal arena in LaSalle, Ont., near Windsor. His family sued, won damages of $8.5 million, and saw the award upheld on appeal. In the past 10 years, physicians’ payments to patients have quadrupled, but big-money suits aren’t just a doctors’ problem. A B.C. court ordered Nike Canada to pay more than $2 million in 1996 after an employee became a quadriplegic in a car crash. A manager had given him eight beers at the end of a shift, and Nike was held liable—even though the man had gone on to spend some hours drinking in a pub before getting behind the wheel. The Metropolitan Toronto Zoo, settling out of court, paid $15 million in 1995 after a six-yearold boy who scaled a perimeter fence lost an arm to wolves.

There are no comprehensive national statistics on civil actions—and some observers suspect the overall number is declining—but injury claims against municipalities seem on the rise, as do professional negligence actions against accountants and even lawyers. “Americans are litigation junkies and it slops over into Canada,” explains David Eryou, a Thunder Bay lawyer who has successfully lobbied for increased legislative protection for Ontario municipalities. With lawsuits in many jurisdictions waiting years for a court date, B.C. Supreme Court Judge John Bouck describes litigation as a “trauma” with consequences that are “often personally and economically catastrophic” often “catastrophic” to the losing party. “The civil justice system in Canada... is facing a crisis,” warned former chief justice Brian Dickson in his capacity as honorary chairman of a Canadian Bar Association task force on the issue. Reporting in August, 1996, the panel called for a less adversarial legal culture in an effort (in one member’s words) to “muzzle the pit-bull litigator.”

No one is saying that Canadian litigiousness has reached U.S. levels. True, the countries share (except in Quebec) the English common-law tradition, and gaps in civil procedure are closing. Three provinces now permit class actions; Canadian judges are more inclined than they were to award punitive damages (an amount, set as punishment, over and above the compensatory damages, or actual loss); except in Ontario, Canadian lawyers may now charge “contingency” fees (a percentage of the win). But two big differences remain to discourage spurious lawsuits in Canada: here, a court can award costs against an unsuccessful plaintiff; and jury trials—whose unpredictability can push nervous defendants into settling—are rare in Canadian civil actions. That leaves the law in the hands of judges, and judges insist on hard evidence before assigning a dollar value to injuries. Under rules set by the Supreme Court of Canada, “general” damages for pain and suffering are capped at $100,000 in 1978 dollars. So plaintiffs’ lawyers focus on the future financial implications of injuries. What will care and nurture cost for the lifetime of a brain-damaged baby or crippled child? Millions, that’s what.

Strosberg, for instance, is especially proud of the settlement he won in 1993 for Jordan Dube, left spastic and quadriplegic by an anesthetic overdose during a hernia operation in Windsor at age 3. Strosberg claimed $5 million, citing future lost earnings and the cost of an accessible home and car, medical care, and half a million dollars for a trustee to look after the money. Plus, $10 million in punitive damages. Those, at least, were his bargaining chips; the defendants settled for undisclosed sums. Strosberg says: “I got that kid more money than any kid ever got in Canada.”

Opposing counsel, Joshua Liswood, attributes the scale of the Dube settlement to Strosberg’s decision to look beyond the standard malpractice suit against doctors and hospital, pursuing the British manufacturer I of the anesthetic vaporizer machine for product liability. Strosberg had S asked whether the machine had an overflow drain to prevent overdoses; 1 it didn’t. “I don’t care if that’s the standard of care in the industry,” Stros! berg says, “if it doesn’t make any sense to me.” That is partly why the civs il system exists, Strosberg argues—to encourage people to take more £ care. Conversely, it often does the best job of punishing wrongdoers. “In a criminal court,” Strosberg points out, “a person doesn’t have to make a defence, doesn’t have to respond, can stand on his or her rights.” In a civil case, the defendant is interrogated in “discovery” and must produce relevant documents. What is more, the action is decided by a simple balance of probabilities—less onerous than the criminal system’s need for proof beyond reasonable doubt.

Class actions, imported from the United States to Quebec, Ontario and British Columbia so far, offer the civil remedy more widely than ever. Strosberg’s pacemaker case offers a classic example: 1,005 claimants shared every cent of the corporate defendant’s liability coverage in a case too expensive for any individual to prosecute. “When manufacturers cheat for pennies, it adds up to hundreds of thousands and millions of dollars at the end of the day,” says Strosberg. “So that’s my career path. I’m coming after those people who are cheating.” Asked if he could be called Canada’s own King of Torts, Strosberg draws a breath and murmurs: “That’s a very flattering description.” Says frequent opponent Michael Royce: “Harvey has eaten a number of fine meals in Detroit, and I think he has thereby become imbued with the entrepreneurial spirit of the Detroit bar, which is one of the most aggressive in the world.”

The U.S. influence started early: when Strosberg was a tall, tough kid walking to Windsor’s Kennedy Collegiate, the skyscrapers he saw across downtown rooftops were in Detroit, ; where his parents shopped and Harvey and his two sisters partied; every Sunday when there was a home game, Philip Strosberg drove his son across the river to see the Lions play ; ' football. Philip, a chemical engineer, worked for a manufacturer in Detroit and owned a small paint business in Windsor. Outside school hours, Harvey devoted himself to sports—his football coach remembers the intense young fullback bulling through the defence—and to his dad’s business. “Harvey would round up a group of his friends and send us into the stores to check whether his dad’s paint was moving,” recalls his school friend Jerry Shen. Payment was neither offered nor asked. “If Harvey said we needed to do this, then we did it.”

The homes of Harvey Strosberg tell a tale of steady advancement, from the six-plex rental unit of his early childhood to the tiered, glass-walled house that he and his second wife,

Cathy, built in 1990 on upscale Victoria Boulevard. In a thirdfloor gym, 6:30 a.m. finds Strosberg sweating under the eye of a personal trainer. Each step on the treadmill lands with peculiar emphasis: thump, thump, thump.

ver since articling on Bay Street to a future Supreme Court justice, the late John Sopinka, Strosberg has amassed powerful friends and clients—federal Health J Minister Allan Rock, star criminal lawyer Eddie Greenspan, Ontario Appeal Court Judge John Laskin. For hockey giant Orr, he told the media that Eagleson had mismanaged funds, and settled without filing suit. For Ontario judge and former deputy attorney general Mary Hogan, he won a libel apology from Frank magazine. But he also represented, without charge, the bereaved family of profoundly handicapped Melissa Gillard at an inquest into 15 deaths at the Christopher Robin Home for Children in Ajax, Ont., in 1991.

There is one writ he regrets: in 1991, Strosberg sued a former client for $100,000 over Detroit Pistons basketball tickets that he said the client had promised him. That brought unwelcome press attention and questions from the law society. “My mistake was suing for money and not just the tickets,” Strosberg reflects while accelerating through a red light near Windsor airport. “If you’re in the public eye, it isn’t enough to be right. You have to understand how the publicity will play.”

But why sue at all? “It wasn’t the money. The guy broke an agreement with me.” Pause. “And there was an emotional component. I’d been separated: going to basketball games was one of the few things I did with the kids. I trusted this guy, and I felt he hadn’t dealt with me reasonably.”

It was aboard the Dash 8 that Strosberg, reflecting on the day in court, decided to offer to settle Dorothy Edgar’s case at $1.6 million. He had originally demanded $2.5 million plus costs for the government’s failure to compensate her for blowing the whistle on a customs fraud by the Amway Corp.; the government had come back with $300,000. Now, with the trial near its midpoint, seemed a good time to kick-start a new round of bargaining, if Ottawa would play.

Strosberg’s essential claim was negligence: Revenue Canada had simply omitted to provide Edgar with her legally required opportunity to be considered for a reward. But the government had sprung a lastminute surprise—a deputy minister would testify that she personally reviewed and rejected Edgar’s claim (after Strosberg became involved) . Strosberg was confident the judge would reject the relevance of the new evidence, but it certainly made the case more complicated. Strosberg would reduce the offer—but only somewhat, because he figured he had scored useful points in cross-examination that day.

Strosberg in “cross” mode is a fearsome sight, shoulders broad under black silk, big right fist clenched on out-thrust hip, eyes unblinking, lips curled inward, questions asked in a voice hard with certainty. That morning, for instance, he had confronted former customs investigator Dwight St. Louis and demanded: “Is this a memorandum signed by you? In your examination for discovery, you told me the ‘informant’ referred to in this memorandum was Ms. Edgar—do you remember that? Was your answer true? In your examination this morning, you said the informant was Mr. Engel— do you remember that? Which answer was true? Both? I see—so now, you say, this ‘informant’ was both of them? I see.”

The memorandum itself had not been a major point until the moment St. Louis contradicted himself. Right then, Strosberg had found the vital first salvo for “cross.” St. Louis, standing tall and affably loose-limbed as Strosberg rose, was hunched, pale and frowning five minutes later. This relationship established, Strosberg leaned over his papers, and began the task of lulling St. Louis into saying what the plaintiff needed him to say. “I don’t recall for sure,” the witness said again and again for two hours, and

than he’s in now,” says litigator Royce. “He’s certainly a more driven person than someone who’s grown up with a dad who’s a lawyer or a bank president. He wants to be a big bloody deal, and he is.”

Big enough to get the call from Ontario Attorney General Charles Hamick in mid-February when Mike Harris’s government ran into media criticism over its offer of $2,000 a month for life to each of the three surviving Dionne quintuplets. Strosberg says he advised the government that it was under no legal obligation to the Dionnes, but Harris wanted a settlement. On March 3, Strosberg dined with the Dionnes’ lawyer, Clayton Ruby, in Toronto. Three days later, they and Hamick announced a lumpsum deal for $4 million, together with a volunteered apology from Harris and a promised inquiry.

It was the second time in two years that Strosberg had come to the aid of a government hungry for settlement in a lawsuit against it. He provided strategic help to the legal “dream team” hired by old buddy Rock, then federal justice minister, to defend against former prime minister Brian Mulroney’s Airbus libel suit. On Jan. 7,1997, Strosberg flew home from Ottawa feeling the “absolute high” of a big case settled for an apology and costs. (Mulroney

Strosberg in cross-examination mode is a fearsome sight, eyes unblinking, lips curled inward

each time, plaintiff’s counsel savored the words without comment. Later, on the Dash 8, Strosberg would sip a glass of water and state, as from the heart: “There’s no place I’d rather be than in a courtroom.”

It can be helpful for opposing counsel to believe you would rather try a case than settle, but Strosberg’s passion for advocacy is unmistakable. As chairman of discipline for the law society in 1993, he halted a complaint against visiting B.C. lawyer Douglas Christie despite finding evidence of “poor judgment” and antiSemitic remarks during the trial of alleged war criminal Imre Finta. Strosberg wrote that allowances should be made for the “tension, passion and drama” of a jury trial. “Otherwise,” he warned, “the risk would be to harness or inhibit counsel precisely when she or he needs most to exhibit fearlessness and independence in the client’s best interests.”

As an officer, or “bencher,” of the law society, Strosberg won acclaim for his management of a $154-million deficit in the lawyers’ liability insurance fund in 1994. His reward was election last June to the prestigious post of treasurer, or chairman of the society’s board of governors. Since that elevation, he has overseen a decision to end the society’s involvement with Ontario’s underfunded and, until this year, deficit-plagued legal-aid system. The move proved popular with benchers, who accepted it by a 34 to 3 vote last month.

As Orr’s former lawyer, he vacated the chair when the law society discussed and accepted a controversial arrangement with disgraced Queen’s Counsel Eagleson in January. Under the deal, the former NHL Players’ Association chief accepted disbarment for misconduct after his fraud convictions in Canada and the United States. In return, the society withdrew 44 other complaints of misconduct. “Disbarring him was the ultimate sanction we could impose anyhow,” Strosberg said afterward in support of the deal. Now, he wants stronger legal powers for the society to clamp down on dishonest—and incompetent— lawyers. He has already moved to give teeth to so-called equity and diversity rules (covering gender, race, sexual orientation and disabilities) for law firms.

Strosberg plainly enjoys showing a visitor around the society’s old-money Osgoode Hall digs, pointing out the portraits of famous former treasurers. “Harvey comes from a different world

has since made an additional demand for withdrawal of an RCMP letter to Swiss officials.) But the next day brought news of a different kind: judgment in the case of Derek Alchimowicz, known to all of Windsor as the “drunk diver.”

Four years previously, Alchimowicz, a 26-year-old illegal immigrant, had climbed onto the hand railing of a dock off Windsor’s Sand Point Beach, dived into water three feet deep, and become quadriplegic. Strosberg filed suit on the young Austrian’s behalf, citing negligence by the city and by the friends and acquaintances who drove Alchimowicz to the party, supplied him with liquor, took him to a “place of danger,” in the writ’s words, and watched him make his dive. Popular reaction was incredulous. Letters poured into the Windsor Star. Alchimowicz was drunk; he had done a tremendously stupid thing. The lawsuit offended “our most basic beliefs about friendship and loyalty and assuming responsibility for our actions,” wrote Star columnist Gord Henderson. “It scared us as well, by pointing out just how easily we too could become defendants.”

Strosberg, in turn, was stunned by the lack of public compassion. “What happened to that kid could have happened to a 10year-old child from a middle-class family,” he pointed out. His witnesses at trial included a former lifeguard who had seen children jumping from that dock and a waterfront-safety expert who considered its enticingly flat railings a clear hazard. “If a round railing costs no more, then why shouldn’t we say that the city should act reasonably?” the lawyer asks, his voice dropping a few decibels (as, according to his kids, it always does when he’s mad). “We have to recognize in our society that people do get drunk. People do act foolishly.”

As for the personal-responsibility argument, Strosberg points out that in Canada, society usually shares responsibility for injuries. Government health plans pay the medical bills and—like all insurers—automatically get reimbursed with a share of damages after any successful lawsuit. Also, it is mostly insurance companies that pay for litigation. “Insurance is a method of spreading risk, of socially dealing with losses,” Strosberg says. He also thinks it is time society pressed the responsibilities of designated drivers, and of social hosts who provide liquor. “It’s a wonderful sociological problem,” he says.

But in Alchimowicz’s case, Judge Joseph Quinn ruled the only negligence was the plaintiffs own. The beach was no more a “place of danger’’ than an ordinary home with a flight of stairs, and the dock’s railing—so alarmingly flat to Strosberg’s eyes—was “an obvious indication that this was not a swimming dock." Case dismissed, with costs. Strosberg is appealing. His firm has already put up to $500,000 worth of billable hours into the case, and if he loses, he gets nothing. “What am I supposed to do—take my client’s wheelchair?" the lawyer chortles. “I’m running the biggest crap game in the country here.”

And he seems as addicted as any gambler. Strosberg works seven days a week, and says he enjoys every minute. Cathy Strosberg says family life sometimes “takes a back seat,” but his office in downtown Windsor is a kind of home to the lawyer’s son, two daughters and two stepchildren, who walk in without knocking, sit in on meetings, and leave with or without hello or goodbye. All three of Strosberg’s own kids, aged 21 to 27, are pursuing legal careers. “I don’t really know why,” frowns Sharon, 25. “It was the natural thing to do. I’ve always been around this office, because Dad’s always working.”

What he is working on nowadays, more than anything else, is class actions, and they are a lot of work. Strosberg says the pacemaker case involved $800,000 in out-of-pocket expenses—about 250,000 documents had to be reviewed, indexed and scanned into a computer system. It helped that Strosberg got court approval for a $350,000 private loan—secured against the eventual award—at 20-per-cent interest. “A good lawsuit is probably a better bet than the stock market,” says Strosberg. “But class-action litigation is not for the faint of heart or the thin of pocketbook.” Which did not deter him from filing three new class actions last year—none a sure thing.

In the case against Bre-X and seven brokerages, Strosberg leads a group of four law firms in Ontario, but has spent much time jockeying with Alberta and B.C. lawyers who support a worldwide class action that has been filed in Texarkana, Tex.. Strosberg, waxing strangely nationalistic, says Canadians should sue Canadians in Canada. But Vancouver lawyer David Klein says a single U.S. hearing would simply offer higher rewards for all shareholders. The western lawyers would happily co-operate with the Ontario group, he says, but only as equals. “Mr.

Strosberg would prefer more control of the litigation," says Klein.

The second case is on behalf of Visa cardholders who make purchases in foreign currencies, then return the goods for a refund. The four major Visa-issuing banks routinely credit foreign refunds at fractionally less than the original Canadiandollar charge. Strosberg’s statements of claim alleged that the hanks profit from the spread between “buy” and “sell” currency rates. Recalls litigator Royce: “He told me about this case over dinner one night and I said, ‘Harvey, who gives a shit?’ He said, You’re missing the point. It adds up.' ” But how much? All four banks filed defences denying a currency profit and citing transaction charges instead. So did Strosberg call the whole thing off? No, indeed. “The question I have now is, how can you charge a transaction fee where there has been no transaction?"

The third case is against the Canadian Red Cross and 11 governments, over blood transfusions tainted with hepatitis C at a time when blood was being screened effectively in the United States and much of Europe. The federal and provincial governments are seeking agreement on compensation payments recommended by the Krever commission in November. If such payments are offered and accepted by the bulk of victims, Strosberg’s hours on that case, too, will be in vain.

But if not, he may enjoy prosecuting something that is slightly less

common for him than for many of his peers—a res ipsa loquitur claim (one in which the facts seem to speak for themselves), and one that swims squarely in the mainstream of negligence law. It is a stream that rose in 1932, in the famous House of Lords case of Donoghue v. Stephenson, in which Lord Atkins laid down the basic principle of every modern negligence lawsuit, declaring: “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor.” Ever since, negligence actions have revolved around just two questions. One concerns the meaning of a “reasonable” standard of care. The other was first posed by a lawyer in the Gospels: “And who is my neighbor?”

day after the tarmac settlement conference, Julie Thorburn called to decline Strosberg’s offer to settle at $1.6 million. Two trial days later, Judge Thomas Zuber delivered judgment. Revenue Canada had fulfilled its obligation to Dorothy Edgar when its deputy minister looked into her case; case dismissed. This time, at the judge’s suggestion, defence counsel agreed not to press for costs.

Edgar, impecunious and angry, was in tears as she faced reporters, but her lawyer, ever the craps-game man, said: "You win some, you lose some.” Gambled and lost were Strosberg’s expenses and time, and the government’s $300,000 offer. Right away, he rolled the dice again, announcing an appeal. “I love this little case,” he says, because the principle that Edgar should be rewarded in proportion to the value of her services—a principle explicitly rejected by Zuber—is “virgin territory, a wonderful point of law.”

Most plaintiffs’ lawyers prefer cases where the territory is not virgin—where the issue is not whether money will change hands, but how

much. Sidewalk “slip-and-falls,” for instance, are good business (because the insurers of the person who didn’t clear his ice will almost certainly pay up), but they are small business (because the injuries, and therefore the damages, tend to be minor) . Bigger cases are usually more complicated, and are defended more vigorously.

Those are the ones Strosberg likes best— the “interesting” cases, he calls them. Reaching for new heights and new precedents, the high-stakes tort man wins some (big time: the pacemaker case), and loses some (big time: the drunk diver, on whose behalf Strosberg says he Ig turned down “a lot—a lot—of money”). In the § coming months, he will argue that wrongfuli death damages are due from two Brampton, Ont., g men who were acquitted of the robbery-murder of ? accounting manager Robert Lord last June. And that heirs to Windsor tool-and-die entrepreneur William Bolton, killed in a private-airplane crash I near Killamey, Ont., in 1994, deserve compensation D for loss of the dead man’s business guidance and coni' tacts. And that the owner of Last Harry’s bar in Windsor deserves compensation from a teenager who lied about his age, leading to liquor-licensing charges against the plaintiff.

Not that Strosberg will concede even one of those cases to be a reach. In his view, they merely apply established legal principles to new circumstances. Such novel cases—to the last “wonderful point of law"—might be a lot easier to win, or to settle profitably, if they were fought on the other side of the Detroit River. But Strosberg works in Canada, where almost all tort actions are still decided by judges, not juries. Canada, where most judges remain cautious about imposing new legal duties on social hosts, designated drivers, dock de signers, tax collectors, doctors, accountants or big business. Canada, where, as a result, insurers don’t cave so often.

To be King of Torts, you have to reach higher, run harder—thump, thump, thump—and risk all.