Canadian Underwriter

Trial lawyers to intervene in important accident benefits case

March 2, 2023   by David Gambrill

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Ontario’s Superior Court has allowed the Ontario Trial Lawyers Association (OTLA) to intervene in an auto insurance case that will address whether a settlement agreement is enforceable when the injured claimant dies before accident benefits (AB) structured settlement instructions were sent to the auto insurer.

TD Insurance is appealing a ruling by Ontario’s Licence Appeal Tribunal (LAT) that the settlement is enforceable, even if the claimant died before the AB structured settlement instructions were communicated to the insurer.

Ontario’s Superior Court allowed OTLA to intervene because of the wider public policy implications of the case on structured settlements related to accident benefits.

“This case, although a private dispute, raises issues that may have a broader impact on settlements of personal injury claims arising from motor vehicle accidents, and structured settlements in particular, which are governed by the Automobile Insurance Regulation,” Ontario Superior Court Justice Paul Schabas wrote for the court in a decision released Wednesday.

“The case also implicates the application of s. 267.4 of the Insurance Act, which, among other things, requires that tort damages awarded at trial be reduced by corresponding collateral benefits, including accident benefits, among other things.

“In my view, therefore, this case does not simply involve a private dispute between two parties to which the law must simply be applied. The appeal raises public law issues and policy concerns that may have a wider impact on personal injury cases generally.”

TD Insurance is disputing that it had a valid and enforceable settlement agreement with their insured auto accident benefits claimant, Kayla Duff-Foley, on Sept. 1, 2020, at the conclusion of a mediation.

According to the settlement terms, Duff-Foley had to provide information for a structured settlement of accident benefits claims to TD. She then had to execute a release and the statutorily mandated settlement disclosure notice, to be prepared by TD.

But Duff-Foley died on Sept. 11, 2020, before communicating to the auto insurer how the settlement was to be structured. On Sept. 14, 2020, Duff-Foley’s lawyer provided TD with structure information and informed TD that Duff-Foley had died.

TD argued there was no valid and enforceable agreement. Counsel for Duff-Foley’s estate disagreed and applied to the LAT to enforce the settlement. The LAT concluded there was a binding settlement.

TD appealed the ruling to the Superior Court, which is scheduled to hear the matter on Apr. 18.

In the meantime, the court ruled there would be no prejudice to TD Insurance if OTLA intervened.

“I am satisfied that OTLA will bring a different and distinct perspective that may assist the court, as it proposes to address the broader implications of the issues and the application of the Automobile Insurance Regulation and the Insurance Act which are not directly addressed by [Duff-Foley’s estate],” Justice Schabas wrote.

“Although, as is often the case, OTLA’s position may be aligned with [Duff-Foley Estates’] interests, OTLA will address issues more broadly and can provide a useful contribution to the court.”


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