Arguments over who can serve as lawyers for Gordon Wallace in his proposed class action suit against Canadian National Railway will be heard in court June 29.
The railway has asked the courts to remove Wallace’s law firm, McKercher LLP, from the case on the grounds the firm previously provided legal advice to CN in unrelated cases.
A hearing on CN’s request will be held in Court of Queen’s Bench in Saskatoon.
Wallace is the Unity, Sask., farmer who in January filed a claim against CN alleging the railway has overcharged farmers for freight for at least two decades.
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The suit also names as defendants the Canadian Transportation Agency and Canadian Pacific Railway.
Wallace’s lawyers hope to have the case certified as a class action suit on behalf of all farmers who shipped grain during the period in question.
If successful, it could involve repayment to farmers of potentially more than $1 billion.
In its application to the court, CN said it has employed McKercher on a number of occasions in the past.
“CN objects to the McKercher firm acting for Wallace, who is adverse in interest to CN in the matter.”
The railway said McKercher breached its “duty of loyalty” owed to CN and created a conflict of interest, and so should be disqualified from representing Wallace.
Joel Hesje, the lawyer representing Wallace in the suit against CN, said the railway’s move against the law firm was not unexpected.
“It will be a setback if we are disqualified,” he said, but added he expects the lawsuit to proceed one way or another.
If CN is successful, another law firm will likely take over that part of the case, while McKercher carries on against CPR and the CTA.
He said McKercher’s lawyers will employ two main arguments against CN’s application:
- CN employs numerous lawyers and law firms across the country on an ongoing basis, and has likely employed every major Saskatchewan law firm at some time.
- While acknowledging that it has in the past acted for CN in areas such as personal injury and real estate, it has never been involved in freight rates or grain transportation.
Assuming McKercher is allowed to proceed, the next step is to have the lawsuit certified as a class action.
Under Saskatchewan law, if the suit is certified as a class action, all farmers who shipped grain in the period will automatically be included in the suit.
Those who don’t want to be part of it must take steps to opt out.
Hesje said it looks like it will be early fall before the certification application is presented to the court.
Wallace launched the suit after it was announced late last year that in the 2007-08 crop year, the two national railways were paid $70 million more to cover the costs of maintaining grain hopper cars than they actually spent. That works out to $2.60 per tonne.
