Colin Perkel, The Canadian Press
TORONTO — It is up to the provincial legislature or the law profession’s regulatory body to decide whether victims should receive compensation when harmed by lawyers who end up without insurance coverage, an Ontario court has decided.
The Superior Court decision means the family of a couple badly hurt in a car crash cannot force payment from the insurance all lawyers in the province must carry in the public interest.
“I…am bound by the law and the facts of this case,” Justice Jamie Trimble said in his decision this week. “If there is a remedy for the Caputos, that remedy lies with the Law Society or the legislature.”
The case arose in 2004 when Francesco Caputo was in a car crash that cost him his life and left his passenger wife Carolina Caputo, who has now died, badly and permanently injured. However, their now-disbarred lawyer, Wayne Novak, failed to file an auto insurance claim. In 2014, a judge ordered Novak to pay the Caputos $321,500.
Because he had no money, the Caputos looked to his insurer, the Lawyers Professional Indemnity Company, known as LawPro, for the money.
LawPro refused to cover the award on the grounds that Novak had refused to co-operate with its investigation. The Caputos, using a novel legal approach, asked the courts to force LawPro to pay up for Novak.
The Law Society of Ontario, which governs the province’s 50,000 lawyers, set up LawPro more than two decades ago to defend and cover claims against its members. Lawyers must carry the insurance to practise. However, if a lawyer fails to report a claim or won’t co-operate with LawPro’s investigation, the insurance company — with about $743 million or 83 per cent of the law society’s total assets — denies coverage.
An investigation by The Canadian Press last year turned up several cases in which victims of negligent lawyers went uncompensated after LawPro would not pay. In response, the law society updated its website to refer to a little known policy which it said offers coverage in those cases.
On Tuesday, the society said it would consider claims denied because a lawyer fails to report a claim or to co-operate with the insurer “provided that the lawyer intended to prejudice the claimant’s efforts to obtain compensation.”
In his decision, Trimble found LawPro, had solid grounds to refuse to cover Novak given his serious failure to co-operate with its investigation.
“My conclusion that LawPro’s denial of coverage to Mr. Novak is appropriate acts as a bar to the Caputos’ notice of garnishment,” Trimble wrote. “LawPro owes no debt to Mr. Novak and therefore, there is nothing exigible under the policy for the Caputos to garnishee.”
In essence, Trimble concluded, the Caputos were asking him to create public policy by declaring that LawPro provide no-fault coverage, which it doesn’t.
“What the Caputos are really asking is that the court engage in judicial legislation (but) it is not the court’s job to legislate,” Trimble said. “The question of whether there should be no-fault coverage for lawyers in Ontario is a question for the (law society) within its statutory mandate, or the legislature.”
Ava Hillier, who represented the Caputos at no charge, expressed disappointment at the decision and noted the family was now potentially on the hook for tens of thousands of dollars in LawPro’s legal costs. Hillier said the family was also considering an appeal, which also carries the risk of further costs.
“Our clients deserve to be compensated; there’s no question about that,” Hillier said. “I’d like to proceed on the basis of public interest.”
A spokesman for Ontario’s attorney general, Caroline Mulroney, did not respond to a request for comment.