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David and Goliath; Przyk v. Hamilton Retirement Group Ltd

In many personal injury lawsuits, the Defendant in the action is defended by their insurance company. For example, when a plaintiff sues the driver/owner of a motor vehicle that is responsible for injuring them in a car accident, the driver/owner’s automobile insurance takes responsibility for, and pays the costs of, defending that driver/owner in the lawsuit. The insurance company then decides what settlement offers to make and pays the amount awarded or agreed to in the lawsuit, up to the policy limits.

As a result, it is often an injured person, who may be unable to work, fighting against an insurance company to receive the compensation they deserve. Generally speaking, the insurance company can easily afford to hire lawyers and pay for experts to strengthen their case. Further, while an injured person may suffer financially until their case is resolved, the insurance company has little incentive to resolve the case quickly (if you started a motor vehicle accident injury lawsuit today, the interest rate the defendant would have to pay is just 2%).

While the outcome of a personal injury lawsuit for an injured person is of the utmost importance to them (as their ability to support themselves and receive the care they need for their lifetime may depend on it) the outcome of an individual lawsuit for an insurance company can be of little consequence to them; it is just one of countless lawsuits and any damages they end up paying is just a ‘drop in the bucket’.

It is not uncommon for injured people to feel like the insurance company is taking advantage of the power imbalance by placing them in the position to either take less than they deserve now or have to suffer financial hardship until a trial date that could be years away. Another way injured people can feel pressure is by the insurance company refusing to make a reasonable offer and forcing the person to choose between going through an expensive, invasive and intimidating trial or walking away.

One of the reasons going to trial can be intimidating for an injured person is that it is possible they will be ordered to pay the insurance company’s costs if they lose at trial (always consult your lawyer about your specific case). In smaller cases, it might not make sense for an injured person to risk, if they lose, having to pay more to the insurance company than they could receive from the insurance company if they win. Alternatively, an insurance company is less constrained by such a risk as they can afford to lose. Further, even if they lose at trial on one case, if this strategy results in injured people walking away in many other cases, they have profited on the whole.

In the recent decision of Przyk v. Hamilton Retirement Group Ltd., the Judge acknowledged the tough position injured people are often placed in and refused to award the defendant, which was defended by the insurance company, Aviva, with costs even though Aviva won at trial. In the decision it states:

[30]      Modest complainants are always at the mercy of the economics of litigation.  This is not a lucrative area for a personal litigator.  It is not unexpected that a plaintiff such as Anna Przyk could end up against an insurer such as Aviva, an insurer of retirement homes with a head office in Kentucky.  This could be characterized as a “David and Goliath” situation.  Access to justice could be threatened by the resources of the opposing side.

 

[31]      From reading the employment advertising for Aviva concerning the sending a message to judges, mediators, and counsel, one detects a certain arrogance.  Size of the insurance market is not inconsequential.  Insurers are answerable to their shareholders. Playing hardball with the modest litigant may indeed be profitable, but that does not mean that the modest litigant should have a field day or that the insurer be vulnerable to frivolous claims.

 

[32]      Being a large market shareholder is not without social responsibility, size should not be wielded to oppress deserving litigants as that would encroach upon the broader social interest of access to justice.

 

[33]      Aviva with its approach is at risk of allegations of playing hardball.  In some circumstances that approach may result in no costs.  In a way, that is a cost of doing business in such a fashion.

 

[34]      I am of the view that there should be no order as to costs.  In other words, these parties should bear their own costs.  Given this finding, it is unnecessary to deal with the specific complaints as to the quantum of the cost.

 

While this is only one decision that may negligibly impact the insurance company’s bottom line, one can hope that this decision will encourage insurance companies to treat an injured plaintiff with dignity, on the merits and practicality of their individual case, and not just as a number in an overarching business strategy.

At Sokoloff Lawyers, we take pride in helping our clients level the playing field so that they feel empowered to make decisions based on what is fair and not fear. The Judge’s acknowledgment of “courageous advocates” is inspiring.       

Please note that this article is not meant to provide legal advice and you should always consult your lawyer with any questions about your specific case.