Commercial litigation: Contractors say SCC ruling unjust

Construction associations in Ontario aren't too happy with the far west in Canada at the moment. The Ontario General Contractors Association (OGCA) and the Ontario Road Builders Association (ORBA) have heated up commercial litigation news in the country by saying that a reprisal clause in British Columbia is unfair. The two bodies also said that the Supreme Court of Canada's dismissal of an appeal regarding the clause could have negative ramifications for the construction industry across the country. 

Two construction companies took the City of Burnaby, British Columbia to court over paying for a sewer project and the city then blacklisted them from bidding on further projects. A B.C. court decided to uphold the use of reprisal clauses which the Supreme Court also upheld on appeal. The president of the OCGA called the decision an abuse of power and intimidation, adding the decision is a threat to the constitutional right for justice for everyone.

Others in the industry say reprisal clauses put a restriction on competitive bids and inhibit contractors who have disputes with cities from pursuing legal action for fear of not being able to bid on additional projects. In Ontario, a law states if construction companies file for adjudication, public owners may tell them they might be put on a reprisal list. Many municipalities have invoked those reprisal clauses.

In commercial litigation cases, it is wise for those involved to seek independent advice from an Ontario lawyer experienced in business law. These incidents are complex and need to guidance of someone who knows and understands the laws that govern them. A lawyer experienced in commercial litigation can assess the strengths and weaknesses of a client's case and weigh in on their potential impact.

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