Articles Posted in Insurance

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I’ve had a few interesting conversations over the past few days with some very thoughtful, rational, insightful and logical people. These people are not lawyers. They have no skin in the game when it comes to the field of personal injury law. That means that they are neither lawyers, insurance adjusters, service providers, doctors, or lobbyists. It’s always nice to get someone’s perspective on the law, and how they perceive it works (or doesn’t) from an “outsider“.

For whatever reason, they were thinking about how the law worked in Ontario. And, in particular, how auto insurance claims worked. They were thinking along these lines because recently, a friend or family member had either been involved in a serious car accident, or something bad happened to their car which required that they get the auto insurer involved.

All of their experiences shared some common threads.

For starters, the people didn’t understand why the insurance claims system was so complicated. Why did the system need to be so complex, with so many hard to understand forms? It was like you had to have a law degree or some expertise in personal injury just to get the insurer to approve a benefit. And just because a benefit was deemed approved, does not necessarily mean that the money would be flowing in a timely manner.

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Long Term Disability Law can be rather complicated.

It’s complicated because Long Term Disability is based in contract, and every contract is different.

For many people, understanding the words and concepts contained in these long term disability contracts is hard to grasp, and confusing. I can’t say that I blame them.

Take a dog bite case for example. If a dog attacks you, and causes injury to you, then the owner of the dog ought to be held responsible for your injuries and losses.

Long Term Disability cases don’t work that way. Simply because you are disabled, or unable to return to work, does not necessarily mean that you are entitled to long term disability benefits.

And, even if you are eligible for long term disability benefits, the quantum of that benefit, along with the payment duration will be in question as well.

There are a lot of fluctuating variables when assessing and quantifying a long term disability case. We call these moving targets. Those targets don’t move as often, or as frequently, with a straight tort claim, like a dog bite case, as they do with a long term disability claim.

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Over the past decade, personal injury lawyers have seen an explosion of a new insurance product offered to their law firms and to their personal injury clients. It’s called Adverse Cost Insurance or After-The Event Insurance.

How does it work and what does it do?

Adverse Cost Insurance or After-The Event Insurance serves to protect a Plaintiff from an adverse cost award following an unsuccessful trial.  At trial, if a party loses, the Judge will generally order that the losing party pay the winning party’s legal fees. Those legal fees, especially after a trial can be very high. This insurance product is there to cover all, or part, of those legal fees which the losing party is ordered to pay by the Judge.

What are the benefits to this insurance?

In theory, the insurance will pay for part, or all of the legal costs if you’re unable to do so on your own.

Let’s imagine a scenario whereby a Plaintiff in a car accident case loses his/her case. After the lengthy trial, the Judge dismisses the Plaintiff’s case, and orders that the Plaintiff pay the Defendant’s legal costs in the amount of $500,000. This is entirely possible. In fact, it recently happened in the case of Belton v. Spencer. In that case, Belton sued Spencer for damages as against Spencer as a result of an accident that he sustained while walking Spencer’s horse .

Following a trial lasting over eight weeks, Belton’s action was dismissed as against Spencer. The Judge ordered that the Plaintiff Belton to pay $350,000 in legal fees plus HST, and $74,472.52 in disbursements, for a total of $469,972.52 to the Defendant Spencer. Ouch!

Spencer’s law firm had an adverse costs insurance policy that to respond to the trial outcome, by paying for the law firm’s disbursements and/or the applicants’ trial costs owed by Belton to Spencer, up to the Policy limits of $100,000. You can read more about the decision here, and about how adverse cost insurance works in this case.

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When a car accident happens, you would like to think that the insurance company insuring the at fault driver will pay out on a meritorious claim.

That makes sense.

But more often that not, insurance companies try to avoid (putting it kindly) their obligation to pay out on such claims. They will leave no stone unturned in an attempt to get out of paying. Smart tactic when it works. But breaches all conventional norms of decency when it fails. But a little egg on the face of an insurer isn’t a new thing.

One of the ways that they can avoid paying out on claims is by attempting to nullify the insurance for the Defendant at fault driver.

They can do so in a number of ways.

One of the ways is to declare that the at fault Defendant driver didn’t have any sort of insurance coverage in the first place.

This happens more often that you would think. During the Pandemic, many Ontario drivers stayed at home on account of COVID and the lockdowns. These motorists had cars, which weren’t being used at all. They were just sitting in the garage, all the while the motorist was paying insurance premiums. Many of these motorists temporarily cancelled their car insurance during the Pandemic to save a few dollars. This makes perfect sense.

But the problem became that many of these drivers who removed coverage, forgot to reactivate their coverage when the world opened up again. The result was that they thought that they were driving around with proper insurance coverage, but in reality; they were not.

In that example, the insurance coverage is well within their rights to deny coverage for a car accident which took place when there was a temporary hold, or removal, of the insurance coverage. You don’t get coverage for free.

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When I was a young personal injury lawyer, an odd case appeared on my desk.

The Plaintiff was an older automobile executive, who broke 3 vertebrae, torn his rotator cuff and fractured his skull in a car accident.

The injuries were quite significant. They prevented the client from returning to work, or engaging in his usual personal care and recreational activities. His life would be forever changed as a result of the car accident.

What was odd was that the car accident was a single car accident. The client was a passenger in the vehicle. The driver had lost control, drove the car off the shoulder of the road, and flipped the vehicle into a ditch along a deserted country road. I imagine that the car accident could have been even more serious had there been more vehicles involved.

So, in that case, the passenger would sue the driver for having lost control and flipped over the vehicle.

In this case, the driver was the client’s own daughter.

Isn’t that strange. A father, needing to sue his own daughter for his personal injuries arising from a car accident. It’s not like the daughter intentionally tried to flip over the vehicle. It was, by all accounts; an accident.

But how does that work, and what are the ramifications of a father, having to sue his own child for damages in a personal injury case? Can the daughter go to jail? Will her credit rating be ruined forever? Does she need to hire a personal injury lawyer to defend her claim? Will she need to go to trial and square off against her own father in open Court? Will this father/daughter personal injury case get really nasty such that Dad will take away Daughter’s TV and cell phone privileges?

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The entire field of personal injury law is rather effective at making sure that accident victims aren’t unjustly enriched by the benefits or moneys which they receive in their case.

Cases have been fought all the way to the Supreme Court of Canada to make sure that innocent accident victims aren’t getting their cake, and eating it too.

Insurance companies will fight tooth and nail to make sure that Plaintiffs don’t double dip.

It can be hard for innocent accident victims to understand that laws against double dipping exist. Many think that legal remedies are an all you can eat buffet. Unfortunately for Plaintiffs, they are not.

The laws surrounding remedies, damages and set offs exist because at law, an accident victim is not allowed to be put in a better position post accident, than they were pre-accident. The laws surrounding compensation exist to make a person whole again; and not to put them in a better position than they were pre-accident.

The accident should not be seen as a monetary windfall for the Plaintiff. It should be seen as a means to an end to make them whole for their past losses, and those losses moving forward.

Certainly, an insurer will have a more conservative valuation of what those losses are. While a Plaintiff will have a more aggressive valuation. Where that number lies is often somewhere in the middle. But, it’s important to state that a Plaintiff can only be awarded what’s recoverable at law.

Many clients want to see the Defendant suffer. They want to see the Defendant go to jail, or become their butler until the end of time as compensation for their damages. Plaintiffs want to own the Defendant’s home, all of their prized possessions, and receive a public apology in four national newspapers. The law just doesn’t work this way. A Judge cannot sent a Defendant to jail in a civil personal injury case. The only thing that the Judge can do is order the Defendant pay the Plaintiff compensation within the framework of the law.

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This is an example of how governments with the best intentions can still screw things up.

It’s quite noble for the federal government to want to help people with disabilities make ends meet. Get people with disabilities more money in their pockets so that they can pay their bills, live independently, and with dignity.

So, the Federal Government unanimously passed Bill C-22 “An Act to reduce poverty and to support the financial security of persons with disabilities by establishing the Canada disability benefit and making a consequential amendment to the Income Tax Act”. Yes, that is the full legal name of the Bill because legislators and lawyers tend to get oh so creative and descriptive when naming a new Bill!

The Bill does not go into specifics about how much people would receive. Nor does it go into specifics about how you would qualify for the benefit.

But it does detail that if you qualify for assistance, you would receive money in the form of a disability benefit.

People should know that receiving money, from any source has consequences. There are never “no strings attached”; especially when receiving money from the Government.

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Sounds like a typical law school fact pattern for a tort case.

A property owner retains an arborist to do a routine pruning job on a set of Norwich Maple Trees in his yard.

The arborist advertises that he is both “licensed” and insured.

Upon attending at the job site, the arborist begins to unload his equipment from his van. It includes all of the normal stuff which any arborist would carry: spikes for climbing trees, ropes, counter weights, pylons and chain saws etc. But is also includes something which you shouldn’t find on any job site; an open container of alcohol; in this case a tall boy of beer.

Having an open can of beer may not seem like a big deal. The general labourers there to help the arborist tell the property owner that having a beer on the job site isn’t a problem; and that they do it all the time. They tell the property owner that this is just the way that the licensed arborist works. He needs beer to concentrate and do his job. They are trying to pass this off like it’s all normal.

The notion that a man climbing 20+ feet in the air; with a large gas powered chainsaw; needs to be fueled by alcohol isn’t normal whatsoever.

Yet, this is what the arborist and his friends tried to convey to the property owner.

In case you are wondering, that property owner was me. And I’m a personal injury lawyer. And I wasn’t having anything of it.

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The majority of my clients are first time litigants:

  1. It’s their first time retaining a personal injury lawyer; or retaining a lawyer at all
  2. It’s their first time suing
  3. It’s their first experience with the legal system
  4. It’s their first time getting really hurt and needing to do something about it from a legal perspective
  5. It’s their first time getting denied by an insurance company
  6. It’s their first time feeling gaslit by an insurance company
  7. It’s their first time participating in sworn statements, an examination for discovery, medico-legal assessments, mediation, having surveillance conducted on them, Pre-Trial, Trial and all of the other things which go hand in hand with personal injury cases

The parties which my clients sue or seek benefits from are large and sophisticated insurance companies. This is not their first rodeo. They are well versed in the dark arts of litigation. Strategically defending lawsuits is what they do well.

Insurance companies know what they are up against. They are facing off against for the most part, unsophisticated accident victims who are hurt or injured. The Plaintiffs are new to litigation and all of the ups and downs which it presents. Insurance companies know how to say the right things because they have experience. Having their lawyers say “healing words” to appease a Plaintiff; or say all the right things to gloss over a terrible sequence of events is less expensive than paying out an award for damages.

An apology costs n0thing. Stating condolences for the loss of a loved one costs nothing as well.

But paying out of a claim costs the price of said claim.

There is a quantifiable economic difference between the two which insurance companies and their lawyers know all too well. Why pay out on a claim when you don’t have to? Why pay more on a case when you don’t have to? It makes financial sense. If an insurance company either liked your claim, or wanted to get you the compensation you deserve; you would have received that compensation by now.

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There are serious misconceptions of how people get paid, or receive benefits after they’ve been seriously hurt or injured in an accident.

You’ve likely heard stories of insurance companies paying for an accident victim’s lost wages, treatment costs or even getting them a modified vehicle or modified home before their case even settles.

Some of these things might be true. Some of these things might be false.

At the end of the day, it’s this sort of misinformation which creates large scale confusion as to what benefits get paid, and what benefits don’t get paid before a case even settles.

Goldfinger Injury Lawyers would like to set the record straight with this instalment of the Toronto Injury Lawyer Blog.

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