This recently released court ruling contains a rather bizarre factual circumstance: a slip and fall personal injury claim defended privately by the owner of the subject apartment complex, rather than through an insurance company. This is very rare indeed. Typically, businesses purchase insurance to acquire peace of mind. When the company is exposed to potentially large losses, it is comforting to know that there is an insurance policy that will provide them with financial protection.
But in this instance, the Defendant did not wish to call upon their insurance company. Indeed, the property owner went so far as to profess there was no insurance: an assertion that the trial judge thought was incredulous given the massive apartment complex owned and operated by the Defendant corporation in this case. But the trial judge was correct: the existence of insurance coverage was immaterial to the personal injury trial. The trial proceeded with the Defendant company having it’s (non-lawyer) owner represent them during the personal injury trial.
Interestingly, the Plaintiff did not press the Defendant very hard to disclose their insurance particulars. Indeed, as explained by the judge, the Plaintiff had many ways to compel the Plaintiff to disclose the insurance particulars, including by compulsion of court order if the Defendant refused, but none of these steps were taken by the Plaintiff. It is not clear why the trial proceeded in this way. It is possible that the Plaintiff and their counsel were unaware, or simply forgot, that the procedural steps to compel the production of insurance particulars were available to them.
However, it is also possible that this was a strategic move on the part of the Plaintiff: namely, a decision to forego the potential recovery against an insurance company in exchange for having a trial against an opponent with no legally trained representative. The company’s representative in this instance was not a lawyer. If the case was defended through an insurance company, the insurance company would have retained a lawyer to defend the apartment complex. There is, of course, no way to determine whether the result would be any different, but it is safe to say that the Plaintiff likely would have been under a higher degree of scrutiny had a trained defence lawyer been directing the defence rather than a lay person.
But if this was a strategic move on the part of the Plaintiff, it was a risky one. A claimant taking this position would have to be very assured that the defending party had the assets to fully (and perhaps easily) cover any judgment, because if they didn’t, the chances of getting an unsatisfied judgment paid is likely close to zero if the insurance company is not involved early on. Indeed, without the insurance company involved, a claimant would likely recover little-to-nothing if the defending party fails to pay the judgment, and the defendant has no assets upon which to enforce payment.
A claimant facing an unsatisfied judgment could start a claim against the insurance company (assuming it’s identity is finally disclosed to them), in order to try and seek recovery under section 132 of the Insurance Act, however, these cases are very difficult to win in situations where the insured defendant failed to involve the insurance company from the beginning (as would appear to be the case here). See for example Svia Homes Limited v. Northbridge General Insurance Corporation, 2019 ONSC 7459 (upheld on appeal, 2020 ONCA 684), where the court concluded that the defending party’s insurance coverage was forfeited because the insured defendant breached a policy condition to provide prompt notice of the claim (a feature in almost every insurance policy).
In this recent case, however, it appears that everything worked out well for the Plaintiff because it seems they likely had a weaker foe, and had a good chance of 100% recovery given that the Defendant owns and operates a large residential apartment complex (that hopefully is not over-leveraged).
In the end, however, does the risk/benefit scale make this a sensible strategy? What if the Defendant nonetheless hires a defence lawyer: is that benefit gone? What if the Defendant, despite looking strong on paper, is on the verge of bankruptcy? What if the major impressive asset (in this case a large building complex) is over-leveraged? What if your damage assessment is wholly undervalued and the judgment is for a staggering amount that the Defendant cannot afford to pay?
Strategically, it is probably best for claimants to insist that the defending party disclose their insurance particulars, and to get the defendant’s insurer involved. After all, the end-game is to ensure that any judgment eventually obtained is collectible: otherwise the claimant and their lawyer went through great pains to earn a piece of paper filled with a lot of nice words. A self-defended defendant could make collection very difficult and protracted, whereas insurance companies, absent an appeal, general pay judgments within short-order.
To compel insurance particulars, the judge in this case provides a nice summation, at paragraph 29:
“…. The plaintiff … (was)… aware, or ought to have been aware, that the defendant was a residential apartment complex with over two hundred tenants, which made it improbable that the defendant would not have had insurance. ….. Insurance particulars could have been obtained by the plaintiff by a timely motion under r. 31.06(4). …. Had the plaintiff brought a motion, obtained an order, and there was some evidence before the court of the defendant’s intentional breach of its disclosure obligation, the result may have been otherwise.”
The takeaway – don’t sit back, demand insurance particulars, and bring a motion under rule 31.06(4) to compel its production if the defending party drags their feet. Once the insurance particulars are known, the claimant should put the defendant’s insurer on notice themselves, if the defendant hasn’t done so. By and large, this provides any claimant with the best possible chance of recovery on any given judgment.
Tarrington v. Havcare Investments Inc., 2022 ONSC 5876
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc5876/2022onsc5876.html