This case, released today, is a bit of a head-scratcher.In Branco v. Allianz Insurance, the plaintiffs were claiming damages as a result of personal injuries suffered in a motor vehicle accident. The trial lasted eight days before Justice Siegel and a jury. The judge ruled that the claim met the threshold. The jury evidently had other ideas though, because once Insurance Act deductibles were taken into account, the net award of damages (to several plaintiffs!) totalled $750.00. (No, that decimal is not in the wrong place.)
Undaunted, counsel for the plaintiff asked the judge to award substantial indemnity costs, relying on s. 258.5(1) of the Insurance Act, which says that “An insurer that is defending an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile on behalf of an insured or that receives a notice under clause 258.3(1) (b) from an insured shall attempt to settle the claim as expeditiously as possible.” In this case, the defendant had not made an offer, so the plaintiffs argued that that fact alone should entitle them to recoup their costs on a substantial indemnity basis.
The court disagreed, saying that the defendant Allianz had acted reasonably in not making an offer to settle in the face of several offers from the plaintiff, all of which were in the range of $150,000 to $200,000.
So, the plaintiffs then asked for costs to be awarded on a partial indemnity basis, in the amount of $56,650. The defence argued that the plaintiffs should receive no costs because the damages were less than $25,000, which was then the limit for “Rule 76”, a.k.a. “simplified Rules” claims. The judge acknowledged that, even adding the deductibles back in, the recovery still fell short of $25,000, but he decided nevertheless to exercise his discretion and allow partial indemnity costs to the plaintiffs.
The judge did feel though, that the costs should be reduced, to reflect what he described as the “mixed success” of the plaintiffs. So, he awarded costs of $21,000 plus GST.
The case raises another issue that we have wondered about. It is not uncommon for a judge to find that an injury meets the threshold but for the jury in the same case to assess the damages at a very low figure (although this case is about as extreme an example as we have seen). How can both findings co-exist? How is it possible for an injury to be a “permanent serious impairment of an important physical, mental or psychological function” and be worth $750.00?
Just curious.