LAW QUESTION: Stacey has worked for lawyer Larry for the last five years in his home office. Stacey does everything for Larry – receptionist, bookkeeper, secretary, paralegal, coffee girl, sometimes even taking his laundry to the cleaners. Stacey is smart and very good with people, and indispensible to Larry’s business. He sometimes took her to networking functions where she mixed and mingled with potential clients and talked up her boss. Since the economic downturn, some of Larry’s clients have gone out of business and Larry’s law practice has also suffered. Larry has told Stacey that if business does not pick up, he would have to reduce her work hours. Stacey had taken some online courses in accounting and in her spare time, she has been studying the books to see how she can make the numbers look better. She inflated some billings and expensed some of Larry’s personal bills through the firm accounts.

Larry and Stacey began attending more functions to meet new potential clients. Stacey finds herself drinking and hobnobbing harder than ever before, sometimes staying on at the events even after Larry has left. One raw rainy evening just before Christmas, after several drinks, Stacey found herself one of the last to leave a party at the golf club. As she was getting her coat, she found herself in the empty cloak room where Brian, one of the potential clients she was talking to during the evening told her that she looked ravishing and offered to help her with her coat. What transpired afterwards would be described as inappropriate touching and some kissing. Stacey broke loose and ran to her car. Fumbling for her keys, she did not realize that she had dropped her smartphone in the parking lot. Understandably upset, she drove away hastily and, coming around a turn too fast down the dark country road, she crashed into a guardrail and passed out. A few minutes later, Meaghan and her one year old son, Sam were driving to pick up her husband (yes, that same two-timing Brian) from the Christmas party. Coming around the same turn, Meaghan did not see Stacey’s stalled car and slammed into it. Sam was not properly secured to his car seat and was seriously injured. In all the turmoil over the past few weeks, Stacey had forgotten to renew her car insurance.

Meanwhile, Stacey’s smartphone was picked up by Brian. Feeling rebuffed by Stacey, he also posted some personal, confidential and proprietary information of Larry’s clients from the smartphone on his website.

Larry and Stacey have come to you to ask what might be their various liabilities under applicable tort law and legislation.