If you bring a tort claim against a driver for a motor vehicle accident, it is highly likely the claim will settle before ever going to trial. But what happens when the Defendant’s insurance company is unwilling to offer any amount of money during settlement negotiations? A 2016 case, Valentine v Rodriguez-Elizalde (ONSC 6395), successfully argued by Ziv Tsimerman of Pollack Tsimerman helps to clarify this question.

In this case, the Plaintiff made numerous offers pre-trial, which were all rejected by the Defendant. Importantly, the Plaintiff put forward an offer to settle in the amount of $5,000 plus interest, costs, and disbursements which was rejected by the Defendant. The Plaintiff was then forced into a ten-day jury trial.

Under the Insurance Act, the insurer has a duty to settle the claim as expeditiously as possible. An insurer also has an obligation to participate in mediation. Failure to comply with these rules may result in the court awarding costs against the insurance company.

In this situation, the Plaintiff was awarded damages by the Jury at trial in the amount of $54,684.17 plus interest. In Ontario, the losing party must pay the costs of litigation to the winning party on top of any damages awarded. In this case, the Defendant had to pay costs to the Plaintiff. While the law surrounding costs and the amount to be awarded is quite complicated, the judge ultimately determined that the Defendant insurance company was required to pay $172,000.

The judge did not find that the Defendant insurance company breached their duty to settle the claim as expeditiously as possible, and further found that the insurance company meaningfully participated in mediation. Therefore, the Defendant insurance company was not required to pay a penalty to the Plaintiff for breaching their duty to negotiate in good faith. However, this judgement is significant in that it is a warning to Defendant insurance companies. Here, the insurance company rejected an offer to settle for $5,000 plus interest, costs and disbursements, and ultimately ended up having to pay over $200,000.

Often times, insurance companies will try to play hard-ball when negotiating with Plaintiffs. After all, insurance companies are businesses, and their main goal is to try and spend as little as possible. However, in their unwillingness to settle claims, they are taking on a significant risk that a judge or jury will award significantly more than what could have been negotiated during settlements.

While this case is a good reminder to insurance companies to think twice before refusing reasonable offers, it is also a good reminder to Plaintiffs about the value of having a great personal injury lawyer. Our name partner Ziv Tsimerman was confident that although the insurance company in this case did not bargain in bad faith, they came incredibly close. Mr. Tsimerman knew that his client deserved more than the insurance company was willing to give, and ultimately was proven correct. Head to this article to read more about why you should consider hiring a personal injury lawyer to take on your claim.