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Calling Upon the “Effective-Decision Maker”

13/Sep/2019

In Al-Khouri v. Hawari, 2019 ONSC 3681, Justice Trimble imposed a cost award against the Defendant for failing to have an “effective decision-maker” readily available during the pre-trial conference. Rule 50.05(2) of the Rules of Civil Procedure states that if a party requires the approval of another person before agreeing to a settlement at a pre-trial conference, the party must pre-arrange ready telephone access to the person with settlement authority. This “effective decision-maker” must be available throughout the entire pre-trial conference.

In Al-Khouri, a representative of the Defendant’s insurer, Aviva Insurance, was present with Defendant’s counsel at the pre-trial conference. The defence confirmed their position that there was no liability on the Defendant. The Aviva Insurance representative present at the pre-trial conference confirmed that A) she reports to a committee at Aviva Insurance for instructions, and B) she did not make arrangements for an effective decision-maker at Aviva Insurance to be available by telephone for the pre-trial conference.

Justice Trimble concluded that Rule 50.05(2) still required Aviva Insurance to have an effective decision-maker present or available by phone even though the defence was taking a no-liability position. Justice Trimble interpreted the Rule in a manner which requires that an effective decision-maker be available in case the insurance representative at the pre-trial conference, after hearing discussions at the pre-trial conference, determines that a settlement should be pursued.

Justice Trimble found that the insurance representative at the pre-trial conference was not an effective decision-maker and none was available by telephone. Further, Justice Trimble was not satisfied that any decision on settlement could be made without first reporting to the insurer’s oversight committee.

As a result, Justice Trimble ordered a $1,000 costs award against the Defendant due to the defence’s breach of Rule 50.05(2). Justice Trimble clarified that the costs award is not meant to be a comment on the merits of Aviva Insurance’s assessment of this claim. In any event, this decision sends a strong message to insurance companies that they must have a representative with settlement authority attend or be available for all pre-trial conferences under any and all circumstances, even if they have no intention of making a monetary offer at the pre-trial conference. The hope is that this decision will help reduce some of the bureaucratic red tape we see which can hinder the efficient resolution of personal injury claims at pre-trial conferences.

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