In last month’s “Being sued will cost you money and time” blog post, we described some of the costs of dealing with a potential claim for subscribers.
This month, we want to walk through the steps involved if you find yourself facing potential legal proceedings – from a demand letter, a Civil Claim, a Statement of Claim, or anything similar – as a result of your activities as a real estate professional. So, make sure to keep this article handy if you or a colleague finds yourself in legal hot water.
Step #1: Report your concern or claim to REIX immediately – notify REIX promptly that you may have a lawsuit or claim being filed against you is key. This is important for a few reasons there are filing deadlines and other court-related timelines which must be met on your behalf. Prompt reporting is crucial so that REIX can review coverage and take the next steps. Once REIX is involved, you do not have to deal with the uncertainty of legal processes and proceedings that you may know very little about.
Step #2: Halt any communications with the party suing you – DO NOT correspond with any other party to the lawsuit (or anyone else) about the matter, other than REIX, REIX Defense Counsel, and your managing broker. In particular, do not admit liability as doing so may put your REIX coverage at risk.
Step #3: Gather and share your documentation with REIX – you will need to identify and collect all of the communications – including emails, text messages, WhatsApp messages, etc. – that you had with the client, customer, other agent (etc.). Even if you think it is not relevant to what is being claimed, REIX requires everything in order to be in a position to present the full case in Court.
You will also need to prepare a detailed statement with dates & times where possible, that outlines everything that happened during the deal, from your initial conversations until the time you were served with Court papers or notified of the legal action. Once you have gathered everything, send it to the REIX team member who has been supporting you so far.
Step #4: Working with you on next steps – once we have had a chance to review all of the facts and the information you provide, you will be advised if the matter falls within coverage and, if it does, we will open a file and retain Defense Counsel to represent and defend you. This begins with REIX and REIX Defense Counsel drafting and filing your Defense, so no action is required on your end. You may be subject to a deductible – $5000 if this is your first claim within the last three years, or $10,000 if this is a subsequent claim within the last three years.
If the matter falls outside of or is excluded from your REIX coverage, you will need to retain your own lawyer to protect your interests in the matter. If you have other insurance coverage, you should report the matter to them.
Step #5: Supporting you through ongoing legal proceedings – once some of the initial steps are covered and we have filed your Defense, you may find that the process slows down, something that some subscribers describe as “hurry up and wait.” The process will also depend on which Court your case will be heard as the litigation procedure differs if you are sued in Provincial Court/Alberta Court of Justice, or the Court of Kings Bench. REIX will continue to support you, answer any questions you have and walk you through the litigation process, regardless of how long it takes. This can include negotiating an out-of-court settlement with the other party or supporting you through a Trial.