Ontario politicians debate municipal joint and several liability insurance
March 11, 2016
Two years after Ontario’s ruling Liberals pledged to “work with” the province’s municipalities on a “solution” to joint and several liability, a Progressive Conservative member of provincial parliament is taking the Attorney General to task for not changing the province's negligence laws.
The liability of municipalities in lawsuits arriving from traffic accidents is an issue for some Ontario politicians
On Feb. 27, 2014, the Ontario legislature passed a motion stating that the provincial government "should protect taxpayers from higher property taxes by implementing a comprehensive, long-term solution to reform joint and several liability insurance for municipalities by no later than June 2014, addressing the alarming rise in insurance premiums due to rising litigation and claim costs."
The motion was tabled by Randy Pettapiece, PC MPP for Perth-Wellington, a riding north and west of Kitchener that includes Stratford, St. Mary's and Listowel.
"There's not much to debate, Mr. Speaker, in this particular motion because we agree with it," Liberal MPP Glen Murray - then minister of transportation and infrastructure and now minister of environment and climate change - said in February, 2014. "It's already well in progress. We're working with (the Association of Municipalities of Ontario) and (the Rural Ontario Municipal Association) to a solution." At the time, the Liberals had a minority government, but gained enough seats in election that June to form a majority government.
Later in 2014, a spokesperson for the Ministry of the Attorney General told Canadian Underwriter the Ontario government "decided not to move forward with changes to the rule of joint and several liability," due to "significant concerns" raised, including the "potential burden" on injured plaintiffs.
Ontario's Negligence Act stipulates that where damages have been caused or contributed to by the fault or neglect of two or more persons and where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering the loss or damage.
The Ontario Trial Lawyers' Association explains how damages are awarded in lawsuits filed in the province.
"If one of the wrongdoers is 50% responsible for the loss, (meaning his several liability is 50%) but is unable to pay the damages, the innocent victim can collect the entire loss from the remaining wrongdoers, who are 'jointly' liable to the plaintiff for the loss," OTLA states on its website. “This approach ensures the goal of restoring innocent victims to the position they would be in had the wrong not occurred.”
When Pettapiece tabled his motion in 2014, New Democratic Party MPP Monique Taylor (who represents Hamilton Mountain) suggested that she asked a risk management professional working for the City of Hamilton about how joint and several liability applies.
"He told me to think about it this way: Two trucks are driving toward each other on a country road,” Taylor said at the time. “They collide and one veers off and hits a tree on a municipal easement. The judge in this case has an award of $5 million and finds the municipality 1% at fault. The driver, who is significantly at fault, only has $1 million of liability coverage. Thanks to joint and several liability, the municipality is on the hook for the remaining $4 million. This is an issue that municipalities would like to see addressed."
The motion tabled in February, 2014 "received unanimous consent from MPPs of all parties - even Liberals - yet here we stand over two years later and the government has done absolutely nothing," Pettapiece said Wednesday during Question Period in the legislature in Toronto. He was asking Attorney General Madeleine Meilleur why the Liberals will not "respect the will of municipalities across Ontario."
Meilleur replied Wednesday that there was "no support" for the motion, "except from the insurance company and some of the municipalities," an apparent reference to the Ontario Municipal Insurance Exchange (OMEX).
In 2010, the Association of Municipalities of Ontario (AMO) published a paper titled The Case for Joint and Several Liability Reform in Ontario.
"Joint and several liability encourages plaintiffs to target so-called 'deep pocket' defendants who are generally insured," said AMO. "The obvious result of this is an exponential rise in insurance claims, a corresponding rise in the cost of insurance and the unavailability of insurance at all in some cases, effectively crippling risk-exposed defendants."
AMO’s members include the cities of Ottawa, Hamilton, Mississauga, Brampton, London, Cambridge, Kitchener, Waterloo, Vaughan and Markham, as well as the regional municipalities of Peel, York, Durham, Halton, Niagara and Waterloo, among others.
In its paper in 2010, AMO said a "pure proportionate system" of joint and several liability would compensate "an injured plaintiff to the extent that any defendant is found liable." This would mean that "if a municipality was found 25% liable and another codefendant 75%, but without funds to pay, the municipality would pay only its 25%."
Another way to address the problem would be to raise, from $200,000, the minimum amount of third-party liability coverage that vehicle owners must buy, AMO said at the time.
Meilleur said Wednesday there was "wide consultation" on the issue of joint and several liability but that plaintiffs' lawyers "were very much against any change in joint and several liability."