Court File and Parties

Court File No.: 1316/20 Date: 2024/01/05 Ontario Superior Court of Justice

Between: Holly Thompson, by her Litigation Guardian, Jacinda Thompson, Plaintiff – and – Daniel McNally, Defendant

Counsel: Nigel G. Gilby, for the Plaintiff Maura Thompson, for the Defendant

Heard: In writing

Justice I.F. Leach

Endorsement

[1] Before me is a motion brought on consent and in writing seeking, pursuant to Rule 7.08(1) of the Rules of Civil Procedure, judicial approval of a proposed settlement on behalf of the plaintiff in this tort litigation; litigation which stems from an extremely serious motor vehicle collision that occurred at a rural intersection in Lambton County on August 21, 2018.

[2] In that regard, I note that, while the plaintiff Holly Thompson was found to be capable of instructing legal counsel pursuant to a capacity assessment conducted by Designated Capacity Assessor E. Ike Lindenburger on June 22, 2021, evolving concerns about her decision-making ability resulted in a further capacity assessment conducted by Designated Capacity Assessor Nadia K. Brown on September 12, 2023, which found:

a. that Ms Thompson was able to understand information relevant to making decisions relating to the management of her property, and capable of granting a power of attorney for property and/or making a will; and

b. that Ms Thompson nevertheless was not able to understand and appreciate the potential impact of her difficulties in thinking related to the brain injury she received in the aforesaid accident, in turn rendering her incapable of understanding and appreciating the reasonably foreseeable consequences of a decision or lack of decision regarding her property, and the impacts of her disability in that regard.

[3] In the result, the litigation thereafter quite appropriately has been approached on the basis that the plaintiff, although currently 25 years old, is a person under a disability within the meaning of Rules 1.03 and 7 of the Rules of Civil Procedure, with steps having been taken to have the plaintiff’s sister, Jacinda (or “Jaci”) Thompson, appointed as litigation guardian for the plaintiff.

[4] A review of the motion material confirms that it is procedurally in order, insofar as it includes all of the material required by Rule 7.08(4) of the Rules of Civil Procedure. Without limiting the generality of the following, I have received and reviewed the following:

a. an affidavit sworn on December 22, 2023, by the plaintiff’s sister and litigation guardian Jacinda Thompson, supporting the proposed settlement and contemplated fees to be charged, and attaching an irrevocable undertaking to invest the proposed settlement consideration not being paid into a contemplated structured payment arrangement and use it for the plaintiff’s exclusive benefit;

b. an affidavit sworn on December 22, 2023, by Nigel Gilby, (counsel representing the plaintiff), explaining and recommending the proposed settlement, outlining the contemplated fees to be charged, and attaching numerous documents, including detailed information regarding the underlying accident, (e.g., material relating to objective collision investigation and reconstruction carried out by the Ontario Provincial Police and a forensic investigation report carried out by an engineering firm), documentation from hospitals and heath care practitioners relating to the injuries, treatment and progress of the plaintiff following the accident, information outlining the projected future care costs of the plaintiff, detailed calculations of the plaintiff’s past and future income loss, detailed information about the statutory accident benefits received by the plaintiff from her own motor vehicle insurer and the final settlement reached in that regard, details of the retainer agreement with plaintiff counsel initially signed by the plaintiff’s mother and then by the plaintiff herself, and information regarding the contemplated settlement of the plaintiff’s tort claim, structured settlement arrangements, and fees to be charged in that regard; and

c. a copy of the proposed minutes of settlement, (signed by plaintiff and defence counsel), included as a further exhibit attached to Mr Gilby’s affidavit.

[5] While I have reviewed and considered all of that material in detail, I do not intend to outline its content exhaustively here. For present purposes, I think the general circumstances may be summarized as follows:

a. As noted above, the plaintiff’s tort claim herein stems from an extremely serious accident that occurred on August 21, 2018. In that regard:

i. Ms Thompson was driving an eastbound minivan that, according to the accident reconstruction evidence and forensic analysis, was struck forcefully on its right side by a northbound pickup truck operated by the defendant; an accident described in the vernacular as a “T-bone” collision. In the aftermath of that high impact collision, both vehicles rolled over repeatedly and came to a rest in a deep ditch to the northeast of the relevant rural intersection.

ii. There is no question that north-south traffic at the relevant intersection faced no traffic lights or signage requiring vehicles such as those driven by the defendant to stop, whereas east-west traffic at the relevant intersection was obliged to stop at posted stop signs and behind painted stop lines prior to entering the intersection. The accident reconstruction also left little to no doubt that the impact between the two vehicles occurred in the northbound lane of traffic at the intersection where the vehicle being operated by the defendant definitely had the right of way.

iii. Analysis of the accident scene and the “Event Data Recorder” information available from both vehicles also allowed for reasonable inferences/conclusions that the plaintiff’s vehicle was travelling east at a speed of 53 kph at the time of impact, (in turn allowing for a reasonable inference/conclusion that the plaintiff had not come to a complete stop as required before entering the intersection), and that the defendant vehicle had been travelling at approximately 116 kph, (or 26 kph over the posted 90 kph speed limit), prior to breaking in response to seeing the plaintiff’s vehicle enter the intersection ahead of it without stopping as required.

b. There is no question that, as a result of the accident, the plaintiff, (who had completed a high school education and been actively employed in construction and framing related occupations prior to the accident), sustained a catastrophic brain injury as a result of the accident and substantial resulting damages and impairments. In that regard:

i. The provided information and documentation relating to the plaintiff’s injuries, treatment and therapeutic care confirms an extraordinary number of impairments sustained by the plaintiff as a result of the accident, (e.g., in terms of severe and significant difficulties with mobility, vision, speech, photophobia and phonophobia, sleep disruption and fatigue, headaches, memory, mental processing and reasoning, dietary issues and emotional control), which necessarily have been addressed by extended periods of hospitalization, outpatient care and multidisciplinary therapeutic follow up.

ii. There appears to be no dispute that, while the plaintiff slowly has made progress towards recovery, and hopes to make continued progress in the future to the point where she might one day be able to live on her own, she is unable to return to work, currently requires ongoing assistance on multiple fronts, (e.g., in the form of direction, supervision, attendant care, and substantial help with homemaking and home maintenance), and is largely dependent on others for a majority of her daily living activities.

iii. Expert certified life care planning analysis provided with the motion material, based on underlying medical documentation and the plaintiff’s ongoing health care and progress, suggests that the plaintiff will require ongoing future health care at a cost of more than $250,000 per year.

iv. Expert accounting analysis set forth in the material provided, based on assumptions I find to be realistic, estimates the plaintiff’s total income loss, as a result of her accident, injuries and impairments, to be at least $1,800,000, and perhaps as much as $3,700,000 or more, if the plaintiff had obtained unionized work; a scenario which, in my view, was entirely realistic and reasonably foreseeable.

v. Of course, the plaintiff also clearly sustained significant non-pecuniary damages for pain and suffering as a result of her accident. While the material before me did not attempt to quantify the value of any claim in that regard, in my view quantification of such damages in the area of $300,000 would not be unrealistic based on the information provided.

c. As noted above, and as one might expect in such circumstances, the plaintiff had access to substantial accident benefits as a result of the accident; benefits that included access to income replacement, reimbursement of necessary housekeeping and home maintenance expenses, and $1,000,000 available for medical, rehabilitation and attendant care expenses. In that regard, there was never any dispute about the severity of the plaintiff’s injuries and resulting impairments, and the plaintiff’s own motor vehicle insurer readily accepted that she had sustained catastrophic impairments as a result of the accident. The plaintiff’s claims in that regard eventually were resolved on the basis of a payment from the statutory accident benefits insurer of $1,245,000; a payment representing a discount of less than 20 percent of total valuation of the plaintiff’s potential remaining benefits. The majority of those settlement funds were placed in a structured settlement, so as to provide security for the plaintiff, (e.g., in terms of ensuring that the funds could not and would not be diverted by others, but would provide a steady income stream for the plaintiff to address her expenses), but also were deliberately “front loaded” to reflect the reality that the plaintiff’s care and hoped for continued improvement would require more expenses in the near future rather than the more distant future.

d. After negotiations between senior counsel, the parties have arrived at a proposed settlement of the plaintiff’s tort claim herein, (commenced on August 20, 2020), whereby the defendant’s insurer, (having responsibility for providing liability insurance coverage with limits of $2,000,000), would provide a total settlement payment of $1,200,000. In that regard, the net settlement funds to be received indirectly or directly by the plaintiff, (after payment of costs of $264,581.97, HST on those costs of $34,430.76, and payment of $16,183.97 in relation to relevant disbursements and assignments), would be $884,803.30, with $650,000 of that to be structured in a manner providing the plaintiff with an additional secure stream of income safeguarded from diversion or inappropriate depletion, and the balance to be invested in a prudent manner to address the plaintiff’s possible need for an independent residence in the future, (if her condition progresses to the point where such a life is possible), or other unexpected future needs.

[6] Judicial approval of the proposed settlement on behalf of the plaintiff is required by the combined operations of Rule 1.03(1) of the Rules of Civil Procedure, (which generally defines “disability” for the purpose of the rules, where used in respect of a person, as including a person who is mentally incapable within the meaning of section 6 or section 45 of the Substitute Decisions Act, 1992), in respect of an issue in the proceeding, whether the person has a guardian or not), and Rule 7.08(1) of the Rules of Civil Procedure, which reads in part as follows:

No settlement of a claim made by … a person under disability, whether or not a proceeding has been commenced in respect of the claim, is binding on the person without the approval of a judge.

[7] Having reviewed and considered the matter at length, I am satisfied that the requested judicial approval, (including effective judicial approval of the proposed legal fee payment arrangements), should be granted, with an order to issue in the form of the draft judgment submitted with the plaintiff’s motion material. Without limiting the generality of the foregoing:

a. As noted above, the plaintiff’s injuries are serious, substantial and likely to be permanent, in the sense that the plaintiff will be substantially impaired in her daily living activities for the remainder of her life, even if she realizes her goal of improvement to the extent where she might be able to live independently in her own residence.

b. However, on any objective view, I think the liability risks of proceeding with an action in relation to the plaintiff’s tort claims arising from the accident were/are extraordinary. In particular, based on the information provided, there seems to be no doubt that the plaintiff’s own negligence was a substantial cause of the accident. She did not come to a complete stop at a marked stop sign, and proceeded into the relevant rural intersection at speed, effectively placing her vehicle directly across the northbound lane of traffic where the defendant clearly had the right of way. Photographs of the intersection make it clear that drivers approaching the intersection from each direction effectively had unimpeded sightlines of all traffic approaching the intersection, such that the plaintiff not only had an independent obligation to come to a complete stop before proceeding into and across the relevant intersection, but also could and should have seen, (at the time of the relevant accident, which took place after 8:00am on an August morning without any indication of fog or other visual impairment attributable to the weather), the defendant driver approaching the intersection at speed with no obligation to stop at that intersection.

c. To the credit of plaintiff counsel, retention of an appropriate forensic engineering expert and resulting analysis of the underlying vehicle event data information and other accident investigation analysis effectively helped to establish another arguable “but for” cause of the accident; i.e., the defendant driver travelling at an excessive rate of speed prior to the plaintiff improperly entering the relevant intersection, in circumstances where the defendant driver therefore arguably would have had sufficient time to react, brake and/or otherwise avoid an impact completely had the defendant been travelling at the posted speed limit or even slightly higher than the posted speed limit.

d. Having said that, I still think it entirely realistic to expect that a jury hearing the case might very well have be inclined to view the plaintiff as primarily responsible for the accident, insofar as the defendant had an entirely realistic expectation that the plaintiff would come to a complete stop as required before proceeding into the intersection, and certainly an entirely realistic expectation that the plaintiff would not have proceeded intersection at speed across the defendant’s lane of travel, in which the defendant clearly had the right of way. In the result, such a jury might very well apportion liability for the accident between the plaintiff and defendant in a manner that attributes most if not all responsibility for the resulting accident to the plaintiff. That very realistic possibility in turn creates the definite spectre of a disastrous result for the plaintiff if this litigation were to proceed to a determination by trial; i.e., with the plaintiff then not only recovering little or nothing in the way of damages as a result of this litigation, but with the plaintiff’s fixed assets from the accident benefit settlement being diluted not only by the fees and disbursements charged by her own counsel, but also by way of any adverse costs payable to the defendant, especially if the defendant has served or serves an appropriate Rule 49 settlement offer reinforcing the defendant’s entitlement to costs of the proceeding. In short, from a benefit-risk analysis, any settlement guaranteeing the plaintiff a positive recovery from litigation of her tort claim generally seems advisable.

e. However, in my view, the recovery contemplated by the proposed settlement would not only be reasonably positive but excellent, having regard to the underlying circumstances. As noted above, it will result in securing, for the plaintiff’s effective benefit, (including payment of the plaintiff’s associated legal fees and other assignment obligations), more than half of the defendant’s available liability insurance coverage. For the reasons outlined in greater detail in the motion material, it also will provide an additional secure income stream that will largely offset or “cushion” the effect of decreases in the income stream to be received by the plaintiff over time from the structured settlement put in place following resolution of the plaintiff’s claim for statutory accident benefits, while also building in a measure of flexibility, (i.e., the non-structured consideration to be received by the plaintiff), that nevertheless will be subject to additional safeguard’s from the ongoing involvement of the plaintiff’s sister and litigation guardian, and the irrevocable direction the plaintiff’s sister has provided in that regard.

f. In my view, the contemplated apportionment of indicated amounts to satisfaction of the plaintiff’s obligation to pay legal fees is also entirely appropriate in the circumstances. Indeed, while I think the circumstances of this particular case would have presented an example where an agreed 35 percent contingency fee was entirely justified by the risks inherently assumed by counsel when agreeing to take such a case on that basis, (given the extraordinary liability risks outlined above), and the excellent outcome achieved by plaintiff counsel notwithstanding the relatively weak figurative “hand” dealt to the plaintiff and her counsel by the underlying circumstances, plaintiff counsel very commendably has proactively volunteered and agreed to charge a far lower percentage of fee recovery, (i.e., 25 percent), with a sizeable portion of the resulting fee effectively to be paid by the defendant insurer. Plaintiff counsel’s conduct in that regard, reflecting obvious concern for the long-term welfare of the plaintiff, (who seems destined to remain entirely dependent on her finite and net litigation recovery for survival over the balance of her life), is in keeping with the finest traditions of the bar.

[8] For all these reasons, I have reviewed, finalized and signed the consent judgment contemplated by the parties.

Ian F. Leach Justice I.F. Leach

Released: January 5, 2024