On January 16th 2014 the Ontario Court of Appeal finally clarified a confusing part of Ontario Law in the decision of Schmitz v. Lombard Insurance Company of Canada, 2014 ONCA 88.
Under most of our car insurance policies is the OPCF 44R Family Protection Endorsement. This optional endorsement protects you and your family from accidents involving an uninsured or under-insured motorist, For example, if you are hurt in an accident, and the driver only carried $200,000.00 in insurance, you could look to your own insurance company to top up your damage award under the OPCF 44R endorsement, up to the liability amount that YOU carry. (I always recommend that people carry $2 million in liability coverage for this reason).
The disturbing question for Plaintiff lawyers was WHEN do you have to sue the second insurance company? It had long been held that the 2 year limitation period only began after an inadequately funded trial Judgement had been rendered. Then a series of Ontario cases started to suggest that the limitation period began to run “from the date the lawyer knew or ought to have known” the insurance funds available from the tortfeasor would be inadequate.
Needless to say this was a worrisome and uncertain standard. How can we know for certain in the early days of a case whether a decision at trial will exceed the policy limits?
Thankfully the Court of Appeal clarified that then old standard was correct. The limitation period begins to run once a trial Judgement was rendered, a demand for payment was made, and the insurance company is unable to pay the full amount of the judgment.
To read the detail please visit the court of appeal website found here; http://www.ontariocourts.ca/coa/en/
