The insurance industry came under fire this week after reports revealed that “at least some” Regina Beach homeowners learned of their involvement in a lawsuit from news outlets, not the insurance company who named them as plaintiffs.
One such resident worried that the litigation made it appear as if “the named property owners were suing their neighbours.”
The Co-operators filed the statement of claim against other property owners, SaskEnergy and the Town of Regina Beach in an attempt to regain some of the funds it had paid out after a natural gas explosion earlier this year. The carrier says it was also caught off-guard by the publicity, but provides a reasonable explanation for why incident unfolded the way that it did.
“Our usual practice is to speak with our clients before we serve a claim in their name, and that’s what we were doing in this case,” said Leonard Sharman, senior advisor, media relations, The Co-operators. “The media somehow got hold of the filing we had done, however, and it became public before we could notify our clients.”
The Saskatchewan Insurance Act mandates that insurance companies seek compensation by initiating legal action on behalf of clients, and there is no requirement to request their permission first. It is known as a subrogated right, and is mentioned in the wording of The Co-operators’ home insurance policies.
“It does have to be in their names. Their names have to appear on the suit, that’s how it works,” Sharman said.
The lawsuit alleges that defendants were negligent in monitoring a gas line on land susceptible to “soil movement and instability” issues. Sharman says that it’s too early to comment on his expectations for its legal outcome, but expects the current controversy to resolve itself soon.
“It was done properly, it just happened to get out in the media before we spoke to them,” he said. “This led to a little bit of confusion, but it’s fine.”
