The Insured sustained various injuries in a 1994 accident when he was crushed against the rear of a van by a forklift. Within 30 days of the accident, the Insured retained a lawyer. However, the lawyer did not request a legal opinion concerning the Insured’s claim until 1996. A claim on behalf of the Insured for statutory accident benefits was made thereafter to the Insurer, who had no prior knowledge of the accident. The Insurer rejected the claim as being out of time.

Cervo v. State Farm Mutual Automobile Insurance Co., [2006] O.J. No. 4378, Ontario Court of Appeal

The Trial Judge dismissed the Insured’s action against his Insurer, but left the action against his lawyer untouched.

On appeal, the Court of Appeal upheld the Trial Judge’s decision finding that the Insured’s reliance on his lawyer’s advice was not a reasonable excuse for failing to file his claim with the Insurer in time. The Trial Judge was entitled to conclude that the Insured had an alternative to the action against his Insurer in the form of an action against his lawyer and as such, would not suffer significant hardship from the dismissal of his action against the Insurer.

Of note, the Ontario Court of Appeal commented that relief from forfeiture is an equitable remedy and is purely discretionary, therefore requiring an examination of all relevant facts.

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