McCoy v. Loveday, 2018 ONSC 3 (CanLII)

The plaintiff brought a motion to have counsel for the defendant removed due to a potential conflict of interest.  The plaintiff was a personal injury lawyer who had had discussions about his case with lawyers from an insurance defence firm.  This insurance defence firm was subsequently hired by the defendant’s insurer in the plaintiff’s personal injury action.  The plaintiff sought defence counsel’s removal from the action, owing to the aforementioned discussions.

Date Heard: November 23, 2017 | Full Decision [PDF]

This was a motion made by the plaintiff for removal of the defendant’s solicitor for potential conflict of interest.  It was heard by Master D.E. Short.

The plaintiff, Joel McCoy, is a litigation lawyer who was involved in a motor vehicle collision on January 1, 2014.  Mr. McCoy commenced an action against the defendant driver Christine Loveday.  Notice of Mr. McCoy’s claim was sent to the defendant on January 9, 2014.  The Statement of Claim was subsequently issued on December 24, 2015.  Mr. McCoy also acts as counsel in a companion action for the operator of the vehicle in which he was the passenger.  He also acts for the driver’s husband in this companion action.

After the defendant was put on notice, but prior to the issuance of the Statement of Claim, Mr. McCoy engaged in a number of conversations about the collision with both present and former lawyers at the insurance defence firm of Benson, Percival, Brown LLP.

On March 24, 2016, Mr. Harvey Klein of Benson, Percival, Brown LLP sent correspondence advising that his firm had been retained to act for the defendant’s insurer.

Mr. McCoy alleged in his affidavit that the discussions he had engaged in with lawyers at Benson, Percival, Brown included issues pertaining to threshold in his own case and in the companion action.  Mr. McCoy further alleged that he had discussed liability of the defendant, details of treatment, and findings of assessments.

Mr. McCoy stated that he had had these discussions with Mr. Michael Schmidt, a lawyer and partner at the firm as well as a second lawyer who no longer worked at there, but had been directly under Mr. Klein before departing.

Mr. McCoy argued that these discussions, which took place prior to Benson, Percival, Brown having been retained by the defendant’s insurer, put Mr. Klein in a conflict of interest, and he should therefore be removed.

Master Short did not accept the position of Mr. McCoy, holding:

Having considered the matter at some length. I am satisfied that neither generally informal conversations between members of the profession, in the nature of extending a professional courtesy, nor providing an informal view on a fact situation in such circumstances should result in a removal of the defendant insurer’s counsel of choice.

Master Short held that discussing the threshold with opposing counsel at such an early stage should only result in exclusion “if there was a clear assertion of potential solicitor client relationship articulated”.  He went on to state that, in applying a proportional analysis, the prejudice suffered by the insurer in being denied their counsel of choice was greater than the alleged prejudice suffered by the plaintiff.

Master Short then proceeded to review the Supreme Court’s decision in Wallace v Canadian Pacific Railway and the scope of the “bright line rule”.  Master Short held that his position was supported by the Supreme Court’s judgment in Wallace, noting that where the bright line rule does not apply, the test comes down to whether there was a substantial risk of impaired representation.  Master Short went on to note that clients who intentionally create situations that will engage the bright line rule, as a means of depriving adversaries of their choice of counsel, will forfeit the benefit of the rule.

n his conclusion, Master Short noted that Mr. McCoy was never a client of the lawyers he spoke with at Benson, Percival, Brown.  He did not pay the lawyers for the responses he obtained and volunteered the information he provided without indicating that he believed he was creating a solicitor client relationship.  Given these circumstances and the proportional impact on the defendant’s insurer, Master Short concluded there was no effective reason to exclude the defendant insurer’s counsel of choice.

 

Read the full decision [PDF]
Written by

Nick first joined Oatley Vigmond as a law student, and later an articling student, prior to joining the team as an associate lawyer. He has a Law Degree from the University of Kent, a Master of Laws from Osgoode Hall Law School, as well as an undergraduate degree in Political Studies from Queen’s University.

Nick is interested in ensuring that clients are provided with the support and advice they require during the litigation process. People who have suffered through the trauma of a serious personal injury are already in a position of vulnerability, and Nick is committed to helping them through this difficult process. Specifically, Nick seeks to help right the balance in an insurance system that is becoming increasingly antagonistic toward injured individuals.