Changes to Ontario joint and several liability law for municipalities ‘under consideration,’ AG says

Ontario government officials are “reviewing” a proposal to place “reasonable limits” on the amount of money that can be recovered from a municipality named as a joint defendant in a negligence lawsuit, Attorney General Madeleine Meilleur suggested earlier this week.

However, a Progressive Conservative opposition MP contends the ruling Liberals have “still not committed” to reforming the rules on joint and several liability.

Critics contend municipalities are facing huge increases in liability insurance premiums and deductibles.

In replying in the legislature Tuesday to a question from Wellington-Perth MPP Randy Pettapiece, Meilleur noted that the Association of Municipalities of Ontario (AMO) has “asked the government to consider the impact of the law on joint and several liability on municipal insurance.”

She told the legislature that within her ministry, “two options are under consideration.”

Related: Ontario to reform law stipulating joint and several liability in negligence lawsuits against municipalities

One model, Meilleur said, would “limit municipal liability for negligence in road maintenance to two times the proportion of damage.”

The other model, as described by Pettapiece, is a “combined model which would place reasonable limits on the damages that can be recovered from a municipality.” This, Pettapiece said, has the support of AMO and several individual municipalities.

In 2010, AMO published a paper, dubbed The Case for Joint and Several Liability Reform in Ontario. It cited several cases, including a legal settlement in 2007 arising from an 11-year-old boy who suffered severe brain damage after being hit by a car. The boy had been riding rollerblades through an intersection whose stop sign was removed by thieves. The un-named city’s liability was estimated at 25% and damages were settled at $8.3 million, but the claim against the city was $6.375 million — nearly 77% of the total damages.

“Joint and several liability encourages plaintiffs to target so-called ‘deep pocket’ defendants who are generally insured,” AMO stated at the time. “The obvious result of this is an exponential rise in insurance claims, a corresponding rise in the cost of insurance and the unavailability of insurance at all in some cases, effectively crippling risk-exposed defendants.”

AMO added there are “many options” to reform.

“A pure proportionate (several) liability system would allow compensation to an injured plaintiff to the extent that any defendant is found liable,” AMO stated. “Therefore if a municipality was found 25% liable and another codefendant 75%, but without funds to pay, the municipality would pay only its 25%.”

Another way, AMO said at the time, would be to change auto insurance regulations by increasing the compulsory minimum third-party liability coverage stipulated under Ontario auto insurance law, currently $200,000. The current minimum, AMO contends, is “just a fraction of the funds necessary to cover catastrophic injury claims and a situation which often compels plaintiffs to seek out those with deep pockets to provide for long-term care.”

During Question Period at Queen’s Park in Toronto July 8, Pettapiece referred to a motion passed Feb. 27 by the legislature calling on the province to implement a “comprehensive, long-term solution to reform joint and several liability insurance for municipalities by no later than June 2014.”

On Feb. 27, Progressive Conservative MPP Julia Munro (who represents York-Simcoe) told the legislature that insurance premiums for municipalities have increased by $35 million between 2010 and 2014.

In 2010, AMO had stated in its paper that when Essex County renewed its insurance policy in 2010, its premiums went up by 47.5%.

One municipality in Pettapiece’s riding — the Township of Wellington North — “faces a 6% hike in its insurance premiums” and was advised to double its liability coverage, from $25 million to $50 million, Pettapiece said Feb. 27 at Queen’s Park.

The motion Feb. 27 had not specified how exactly the Negligence Act should be changed. The motion stated that “in the opinion of” the legislature, that the Ontario government “should protect taxpayers from higher property taxes by implementing a comprehensive, long-term solution to reform joint and several liability insurance for municipalities by no later than June 2014, addressing the alarming rise in insurance premiums due to rising litigation and claim costs.”

On July 8, Pettapiece asked Meilleur: “When will you get it done?”

Meilleur did not commit to a specific date.

“It’s a very complex matter, and we want to make sure that we have it right before we move forward,” Meilleur told the legislature.

In a July 8 press release, Pettapiece stated: “The June deadline has passed, and the government has still not committed to getting this done.”

The legislature was not in session for most of May and all of June because of the June 12 election. The election was called in May after the PC and New Democratic parties announced they would not support the 2014-15 budget. At the time the Liberals had a minority government, but they were returned to power June 12 with a majority government and reconvened the legislature July 2.