Lawyer's failure to get court approval for plaintiff under disability did not void the settlement
The Ontario Superior Court of Justice refused to set aside a personal injury settlement, finding that the insurer acted in good faith despite the plaintiff’s lawyer’s fraudulent actions.
In 2010, the plaintiff was severely injured in a car accident, suffering orthopedic and significant head injuries that impaired his cognitive abilities. He retained a lawyer, Bradley Duby, to bring an action on his behalf, and to advance claims under the Family Law Act on behalf of his family members.
The plaintiff’s lawyer settled the case against the insurer for over $1,000,000, splitting the funds between two injured passengers. The plaintiff’s claim was reduced by 25 percent for not wearing a seatbelt. However, the lawyer did not appoint a litigation guardian or obtain the required court approval under Rule 7.08 for individuals under disability. The plaintiffs later discovered the lawyer had forged signatures and kept the settlement funds for himself.
The plaintiffs argued the settlement should be voided because it was neither court-approved nor fair. They also claimed their lawyer’s fraudulent actions invalidated the agreement, and they sought to avoid returning the settlement funds as they never received them.
The Superior Court found that although the plaintiff was under a disability and required court approval for the settlement, this failure did not automatically void the agreement. The court concluded the insurer had acted in good faith and was unaware of the plaintiff’s cognitive impairments. While not perfect, the settlement was neither unreasonable nor unconscionable.
The court emphasized that setting aside a final judgment, especially a consent order, is an extraordinary measure. In this case, the plaintiffs failed to provide sufficient grounds to overturn the settlement despite their lawyer’s fraudulent conduct.
Ultimately, the court ruled that the plaintiffs were wronged by their lawyer, not the insurer, and should seek redress elsewhere. The plaintiffs were ordered to pay $30,000 in legal costs to the defendants.
