Many people don’t know this, but insurers are required by law to attempt to settle a motor vehicle accident claim as quickly as possible. If they drag their feet, play hardball, negotiate in bad faith or refuse to consider reasonable settlement offers then this behavior will be considered by the court when it comes time to make an award of costs in the litigation.
As a general rule, successful parties are entitled to an award of costs. In the recent Ontario case of Maxwell v. Luck, the trial judge ruled that the insurance company breached its statutory duty to attempt to settle the claim expeditiously. He ordered that the insurer pay the plaintiff’s legal costs of the litigation in the amount of $206,000.00 together with the further sum of $50,000.00 that he described as a ‘remedial penalty’ that was assessed against the insurance company owing to its breach of statutory duty.
