Health authorities do not owe an insured a duty to settle their subrogated interest in their insured’s tort action

The Court concluded that Manitoba Health did not owe the plaintiff contractual or fiduciary duty of care under the province’s health legislation; however, it owed the plaintiff a private law duty of care in compliance with statutory obligations and established policies and guidelines.

Lewycky v. Government of Manitoba, 2008 M.J. No. 390, Manitoba Court of Queen’s Bench, D.P. Bryk, J, November 6, 2008

The plaintiff sustained injuries in a helicopter crash.  He sued the helicopter company and another person and negotiated a settlement to his claim for damages.  The plaintiff requested Manitoba Health’s consent to the settlement and offered Manitoba Health approximately $55,000.00 to satisfy its subrogated claim for accident-related hospital and medical expenses which had been paid on behalf of the plaintiff.  Manitoba Health refused the settlement and opted instead to pursue the helicopter company in a separate action, which was ultimately settled for $70,000.00.  As a result, the plaintiff sued Manitoba Health for breach of duty.  The primary issue was whether Manitoba Health owed the plaintiff a duty of care and if so, the precise nature of the duty.

The court reviewed whether Manitoba Health owed the plaintiff a contractual or fiduciary duty of care under the Health Insurance Services Act, C.C.S.M. c. H 35, and concluded that it did not.  The court further determined that while Manitoba Health owed the plaintiff a private law duty of care to comply with statutory obligations and to deal with the plaintiff’s claim fairly, expeditiously and in accordance with established guidelines and policies, Manitoba Health had discharged that duty.  Finally, the court considered whether the plaintiff had suffered undue hardship as a result of Manitoba Health’s conduct, and concluded that he had not.  As a result, the plaintiff’s claim was dismissed.

This case was originally summarized by W. Jay Havelaar and originally edited by David W. Pilley.

To stay current with the new case law and emerging legal issues in this area, subscribe here.