Personal injury lawyers and claimants need to know that a “without prejudice” letter from an insurance adjuster containing a request to settle does not extend the limitation deadline to start the lawsuit, says the Court of Appeal (Trombley v. Pannu,2016 BCCA 324).  The trial judge dismissed this personal injury case as statute barred, finding that the letter from the adjuster did not acknowledge liability because (1) it was marked “without prejudice”, and (ii) the purpose of the letter was to simply move the claim forward before the approaching two-year limitation period.
Ryan v. Moore, 2005 SCC 38 is the seminal case in this area of law and provides the governing test for determining whether a written communication has confirmed a cause of action:

  1.  The party writing the letter acknowledged the cause of action; or
  2. That there was a payment made in respect of the cause of action.

The simple acknowledgement of the “existence” of a personal injury claim is insufficient to meet the requirements.  Acknowledgment must involve acknowledgment of some liability before the court will consider extending a missing limitation period.

In this case, three months before the 2 year limitation period to file the lawsuit, the adjuster wrote to the claimant asking him for his “settlement demands”. The critical paragraphs stated:

As the matter of investigation and assessment has continued, there has been no indication of what is expected in terms of settlement. As we are nearing the two year mark following the date this incident occurred, in an attempt to keep matter moving forward, please forward your settlement demands.

We thank you in advance for forward [sic] the requested records, and we look forward to further discussions regarding settlement.

The “without prejudice” notation on the adjuster’s letter, reinforced that the letter was made during the ongoing “investigation and assessment” stage and did not demonstrate an intention to admit liability.The “without prejudice” notation on the letter ensured there was no acknowledgment of liability.

 The appeal was unanimously dismissed by a three judge panel.

Learn more about how Without Prejudice offers are used in personal injury cases.

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