The ongoing courtroom drama between scandal-plagued eHealth Ontario and one of its former contractors illustrates just how messy a breach of contract lawsuit can become. Unfortunately, in practical terms the real losers here are likely to be Ontario taxpayers.
eHealth Ontario hired a company called CGI to develop an online registry of diabetes patients in the province. The move itself is a sound one – given that the number of diabetics in the province has more than doubled since 2000 and costs more than $5 billion in healthcare costs annually.
The contract – worth a cool $46 million – was terminated by eHealth in 2012 without making any payments to CGI. At the time, eHealth officials named a number of reasons, including failure to deliver on issues specified in their contract:
- Deadlines had not been met
- No functional system was ever delivered
The Breach of Contract Lawsuit
CGI in turn is suing eHealth Ontario for $102 million. That amount includes the $46-million value of the contract plus $56.4 million in damages for breach of contract plus interest and costs. The company claims in its filing that it put “significant effort and resources” into the project. They also blame eHealth itself for causing the delays in the project.
In their statement of claim, they say, “The delays caused by eHealth resulted in significant damages to CGI … “Countering the allegations by eHealth, they further claim, “…notwithstanding the delays, CGI substantially completed the project by the summer of 2012.”
eHealth is countersuing for $25 million. In the eHealth counterclaim, they note,
- The system was supposed to go live on June 30, 2011;
- After 15 months and what they claim was “significant co-operative assistance on the part of eHealth Ontario” they claim no application was received at all.
From their filing, “CGI falsely led eHealth Ontario to believe that CGI had the requisite ability, experience, skill, resources and capacity to perform the project in a timely and professional manner.”
It boils down to essential issues involved in employment or services contracts:
- The capacity of both parties to fulfill their obligations under the agreement – in this case, there’s an allegation that one party misled the other about their abilities;
- The practical ability of either party to do so – essentially, is the outcome actually deliverable? That includes having the necessary resources and as in this case, any issues where one party’s actions can hinder the other’s.
Arbitration & Alternative Dispute Resolution
The case is now being sent to arbitration, where the results will occur beyond public scrutiny. In this case, it has many observers worried that taxpayer money will be squandered yet again. But, as a rule, keeping disputes out of court is often the most efficient solution to a breach of contract issue.
At Petrillo Law, we will review the agreement in question to confirm whether the other party has not fulfilled its duties properly. If a breach of contract has occurred, we offer Alternative Dispute Resolution (ADR) services to attempt to settle the matter quickly and in a cost-effective matter. If litigation becomes necessary, we will pursue the matter aggressively on your behalf.
We Can Help
The best time to get any contractual issues sorted out is before you sign on the dotted line. Let us help you sort out the issues and any potential conflicts you might encounter, along with any other questions you may have. A full and complete understanding of your employment contract is your best protection against future problems.
If you are already working under a contract and issues have come up, don’t hesitate – you need expert legal advice. You’ll need the help of experienced breach of contract lawyers. If you think your rights under a contractual agreement are being disregarded contact Petrillo Law today or call us (905) 949-9433 for a free consultation with an experienced contract lawyer. We look forward to hearing from you.