Aviva Gets a Slap on the Wrist by the Ontario Courts for it’s No Settle Threshold Policy

This post was written by Andrea Girones:

May 19 2015. As many personal injury lawyers know some insurance companies can be easier to deal with than other companies.

Aviva Canada has for years had a program whereby certain personal injury claims were considered “defendable” on the issue of the threshold. The threshold means that, if a car accident victim could not prove that they had suffered a “permanent, serious impairment, to an important physical, mental or psychological function”, then they would be unable to collect “pain and suffering” damages.

Once a case was placed in Aviva’s “defendable” program, the lawyer would not be allowed to offer one penny, not even the costs of a trial, to settle and avoid a full trial in the Superior Court of Ontario.

The program by Aviva Canada was intended to scare off cases that were anything less than a slam dunk winner, such as a case with significant orthopedic (visible on x-ray) injuries. Most at risk were cases with soft tissue injuries, injuries that relied primarily on the car accident victim’s word.

It meant that even in cases that had a monetary component, which is not protected by the threshold, no offer would be made at any point. This meant a lot of expensive and lengthy trials in the court system which frustrated many Judges who were trying to reach a compromise to avoid a trial.

Recently the Court in Marshall v. Luck 2014, ONSC 7179 handed down a remedial cost penalty to Aviva, after the accident victim won her case at trial. The Judge found that Aviva deserved this $50,000.00 cost penalty, to prevent them from taking such a hard nose line in the future.

I had a trial a couple of years ago on a case in the Aviva Canada “defendable” program. It was a soft tissue case with some good evidence and some other evidence that would challenge my accident victim client. The award I received a trial was not large. However because Aviva refused to settle, Aviva ended up paying a cost award of almost five times the Judgement amount.

The whole point of a settlement is to compromise for the risks of losing (or winning) and to avoid the subsequent cost award. My trial, and I suspect the Maxwell trial, could have been avoided by Aviva being willing to compromise even by a small amount. Hopefully this decision will encourage this, and other car insurance companies, to be more reasonable in the future.

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