Insurer to stand trial for claim handling practices.

On August 31, 2016, an Ontario judge ordered that a law suit against an insurance company, based on alleged mishandling of the insured’s mother’s accident benefit claim, is allowed to proceed. The judge found that it was not “plain and obvious” that the law suit was certain to fail.

In Watkins v. Western Assurance Co., 2016 ONSC 2574,  the insured’s mother was involved in a car accident when the insured was 15 years old. The insured was not present at the accident.

The insured’s first law suit claimed damages arising out of the insurance company’s handling of his mother’s accident benefits. The insured alleged that he was deprived of his mother’s care, guidance, and companionship which ultimately led to his inability to acquire a post‑secondary degree, achieve his pre-accident goals, maintain relationships, and integrate into society.

In the other law suit, the insured sought non‑earner benefits and alleged the insurance company acted in bad faith.

The insurance company brought motions for summary judgment seeking to dismiss both law suits. The judge hearing the motions found that the claim for non‑earner benefits was brought out of time because time started to run when the insured reached the age of majority; the action was brought some six years later. As for the second law suit, the judge concluded it was not plain and obvious that the claim was certain to fail; the action was novel. Accordingly, the motion for a summary judgment in respect to that law suit was dismissed.