Chapter 11 - Client Complaints

Questions and Answers

What is the main advantage of mediation compared to traditional litigation?

It is typically more formal and structured.

It is a more expensive process.

It encourages both parties to maintain their relationship post-dispute. (correct)

It allows the mediator to make binding decisions.

What is required for a complaint to be investigated after an alleged issue arises?

The complaint must be made within three years of occurrence.

The complaint must be reported to a regulatory body within one year.

The complaint must be made within five years of occurrence.

The complaint must be filed within six years after the complainant was aware of the issue. (correct)

What role does a mediator play in the mediation process?

To facilitate discussion and help parties reach an agreement. (correct)

To provide legal advice to the parties involved.

To decide the outcome of the dispute.

To represent one of the parties in negotiations.

Under what circumstance might a dealer member receive a demand letter?

When a client alleges breach of contract or wrongdoing. Signup and view all the answers

What action should a dealer member take upon receiving a demand letter?

Consult its legal counsel immediately. Signup and view all the answers

What is the purpose of solicitor-client privilege in the context of legal action?

To protect communications between a client and their lawyer from being disclosed in court. Signup and view all the answers

Which of the following is true regarding civil litigation time constraints?

Limitations on actions vary depending on the complainant's residence. Signup and view all the answers

How does mediation benefit the resolution of disputes?

It provides a space for parties to air grievances and clarify issues. Signup and view all the answers

What is required of clients before they can proceed to arbitration?

They must resolve the complaint with the dealer member on their own. Signup and view all the answers

What distinguishes private arbitration from standard arbitration?

Private arbitration accommodates amounts larger than $500,000. Signup and view all the answers

Which of the following is a mandatory requirement for dealer members concerning dispute resolution?

They must participate in alternative dispute resolution programs. Signup and view all the answers

What is the primary role of an independent arbitrator during arbitration?

To decide how the dispute should be resolved and impose a remedy. Signup and view all the answers

In which scenario can dealer members not compel arbitration?

When the client has not attempted independent resolution. Signup and view all the answers

Which alternative dispute resolution option is voluntary for dealer members in Quebec?

The mediation program of the Autorité des marchés financiers. Signup and view all the answers

What happens to the rights and remedies of the parties once they agree to arbitration?

They have to waive all other rights and accept the arbitrator's decision as binding. Signup and view all the answers

Which organization is NOT recognized for resolving disputes between dealer members and clients?

International Mediation Institute. Signup and view all the answers

Which of the following situations would be considered as a waiver of privilege?

A third party is present during a confidential legal consultation. Signup and view all the answers

Which type of communication is explicitly not protected by without prejudice privilege?

A refusal to compensate with an explanation. Signup and view all the answers

What is a recommended safeguard for protecting legal privilege?

Ensure that legal advice does not include business or policy suggestions. Signup and view all the answers

Which of the following communications is considered privileged?

A personal discussion between client and lawyer without third parties. Signup and view all the answers

What implication does a client discussing legal advice with a third party have?

It may constitute an inadvertent waiver of privilege. Signup and view all the answers

In which scenario is a document not considered to hold privilege?

A document that discusses legal advice as well as how to implement a policy. Signup and view all the answers

Which of the following actions can lead to the inadvertent loss of privilege?

Failing to secure privileged documents from unauthorized access. Signup and view all the answers

What defines 'without prejudice' privilege in the context of legal communications?

Communication that cannot be presented in court. Signup and view all the answers

Study Notes

Complaint Investigation and Mediation

Complaints cannot be investigated by a participating firm more than six years after the complainant became aware of the issue.
Mediation is an informal, cost-effective dispute resolution method, provided free for Quebec residents through AMF.
Both parties must agree to mediation; a mediator facilitates the discussion but has no authority to enforce decisions.

Civil Litigation

Clients can pursue legal action against dealers or investment advisors for restitution within specified time limits.
Time constraints for proceedings are set by provincial legislation, depending on the complainant's residence.
Legal advice should be sought promptly if a complaint escalates to litigation; external counsel is commonly involved.

Demand Letters and Claims

A demand letter is a request from a lawyer for restitution due to alleged breaches; dealer members should consult legal counsel upon receipt.
Failure to resolve complaints internally may lead clients to seek external resolution, risking reputational damage for the dealer member.

Alternative Dispute Resolution

Participation in alternative dispute resolution (ADR) programs, such as National Arbitration Programs and OBSI, is mandatory for dealer members.
Mediation participation is optional for dealer members in Quebec through AMF's program; clients must try to resolve complaints independently before arbitration can be pursued.
Dealer members must participate in arbitration if the claim is under $500,000.

Arbitration Process

During arbitration, an independent arbitrator resolves disputes based on parties’ presentations, with their decision being binding.
Private arbitration agreements can involve larger claim amounts and follow criteria set by the parties involved.
Communication containing a settlement offer can be considered "without prejudice" and may be protected under privilege.

Waiver of Privilege

Waiver of privilege occurs when a party reveals privileged information or does not maintain its confidentiality.
Examples of privilege waiver include sharing privileged documents with outside parties or discussing legal advice in the presence of third parties.

Non-Privileged Communications

Not all communications or documents are considered privileged; confidential or commercially sensitive materials can lose privilege.

Protecting Privilege

To protect legal privilege, documents containing legal advice should be clearly marked as confidential and disseminated restrictively.
Non-legal documents should not be sent through the legal department to avoid misrepresentation of privilege.
Courts view lapses in privilege protection seriously, highlighting the importance of careful documentation practices.

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Description

This quiz explores the principles of dispute resolution with a focus on mediation. Learn about the time limits for complaints and the benefits of mediation as a solution. Suitable for residents of Quebec, discover how mediation can help preserve relationships.