A decision of the Ontario Superior Court has reinforced that automobile insurers cannot take unreasonable settlement positions in lawsuits. If they do, they may face cost consequences at the end of the day.
After a jury verdict was handed down in a chronic pain case, Justice Howden was asked to award costs to the successful plaintiiff. His honour applied his experience on the bench to arrive at a global assessment, looking at more than just the bill of costs submitted by the plaintiff. In the end, Justice Howden mposed a penalty on the insurer defendant based upon the criteria set out in the Court of Appeal decision of Keam v. Caddy.
In the Maxwell case Justice Howden found that Aviva had not made a reasonable attempt to resolve the claim. In fact, Aviva had gone to a mediation for the sole purpose of announcing that they were not offering anything to settle the Plaintiff’s claim. Justice Howden used his discretion to award a $50,000 penalty on top of the $150,000 awarded as costs and $56,000 for disbursements.