Flood of special award claims unlikely to follow rare ruling

A recent Financial Services Commission of Ontario ruling to grant a special punitive award against an insurance company for its handling of a client’s application for catastrophic impairment is unlikely to open the floodgates to a rash of special award claims, Toronto personal injury lawyer Darryl Singer tells Law Times.

In Waldock v. State Farm Automobile Insurance Company, the plaintiff was helping a car stuck in a snow bank when he was struck by a vehicle that had lost control coming down a hill, the article says.

He subsequently applied for and received statutory accident benefits from State Farm, but disputes arose between the two parties about whether or not his injuries were deemed ‘catastrophic.’

In 2014, a preliminary issues hearing to determine if he was catastrophically injured ruled in favour of the plaintiff, but LawTimes reports that the arbitrator deferred the decision on hearing costs until a later date.

“When the 2014 decision was released, [Arbitrator Knox] Henry found that the insurer’s medical assessor failed to follow the accepted guidelines to determine whether a person is catastrophically impaired, and ruled the insurer based its denial of catastrophic impairment on a flawed report.”

In mid-November, the arbitrator ruled that State Farm had refused to accept his original ruling of catastrophic impairment.

“Because the insurer had ample evidence to support Waldock was in fact seriously injured and partially incapacitated by the collision, he found the company was responsible for withholding or delaying payments, and he ordered a special award of 30 per cent of the $361,520 still owing, plus accumulated interest, calculated at two per cent per month and compounded monthly starting from early July 2010. Waldock was also awarded $125,435 for his bill of costs and disbursements of $45,824,” Law Times reports.

While Singer says Waldock is not a ruling that will lead to a flood of special award claims, he tells Law Times that it is a “sound decision” that reinforces the court’s discretion in making such rare awards.

“The conduct has to be essentially so egregious; in this particular case, it should have been patently obvious to the insurer the client was catastrophically injured,” he adds.

The arbitrator ruled because the insurer decided to force the matter to arbitration, and even after the ruling on catastrophic impairment, only paid the client about a third of what was owing, Singer tells AdvocateDaily.