Ontario courts have been signalling for some time now that a failure to treat pre-trial conferences seriously will have consequences. A recent Superior Court of Justice decision may be read as increasing the standard to which insurers will be held for their participation at pre-trial conferences. Rule 50.05(2) of the Rules of Civil Procedure states as follows:
A party who requires another person’s approval before agreeing to a settlement shall, before the Pre-trial Conference, arrange to have ready telephone access to the other person throughout the Conference, whether it takes place during or after regular business hours.
The Rule does not explicitly require insurers to engage in settlement negotiations, so one would think that an insurer could safely take a no-liability position without any adverse effects. The insurer was not so lucky in the decision of Al-Khouri v. Hawari. In that matter, Aviva attended the pre-trial conference as the defendant’s insurer along with counsel.
Aviva had taken a no-liability position throughout the claim and did not partake in settlement negotiations. At the pre-trial, Justice Trimble probed the Aviva adjuster as to her authority and Aviva’s decision-making hierarchy. The adjuster advised that she did not have another decision-maker available by phone and that she reported to a committee in advance of the pre-trial. Defence counsel clarified that the committee is simply for oversight.
Justice Trimble was not convinced that the Aviva adjuster satisfied the requirements of 50.05(2), finding that she was not the “effective decision maker”. The court ordered Aviva to pay $1,000.00 in costs for its conduct.
On one hand, Al-Khouri seems unfair to Aviva, which at some point must have made a decision to take a no-liability position. Presumably, that decision was made within the authority of an Aviva employee (i.e. an “effective decision maker”). The decision also calls into question who an effective decision maker is, which will vary amongst insurers, depending on their internal structures. Insurers who proceed to a pre-trial conferences ought to be prepared to answer questions about their internal decision-making structures and have superiors available, even when having no intentions of settling a claim.
See Al-Khouri v. Hawari, 2019 ONSC 3681 (CanLII)
Better known around the water cooler as “Amazon Prime”, Tim has a knack for knowing just what his insurance clients need and delivering it overnight (at a premium). Whether he’s flexing his subrogation muscles, “nerding out” over a new coverage issue or investigating fraud, Tim enjoys thinking outside the box.