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How is a personal injury claim different from a personal injury lawsuit?

In Canada, you are entitled to monetary compensation if you have been involved in an accident through no fault of your own, and the accident has resulted in an injury. The monetary compensation (commonly referred to as damages) is supposed to cover, among other things:

  • Medical bills incurred
  • Lost wages
  • Emotional suffering
  • Physical pain
  • Mental anguish
  • Diminished quality of life
  • Loss of support and companionship
  • Disability accommodations for your home and vehicle

The injuries that you can seek compensation for include dismemberment, significant scarring or disfigurement, bone fractures, significant limitation or loss of a body organ, and serious injuries like herniated discs that require expensive surgery. Note that you can also seek compensation in case of the death of a loved one.

Under Canadian law, you can seek monetary compensation in case of a personal injury and other losses in two ways. You can either file a claim and negotiate a settlement or you could file a lawsuit. So, what are the differences between the two?

The major and obvious difference between the two is that you file a claim with the insurance company and try to negotiate a settlement. The at-fault party will not be involved in the negotiations and will be fully represented by the insurance company. On the other hand, with a lawsuit, you are suing the at-fault party (mostly through the party’s insurance company) for compensation through a court of law.

Another major difference is that if you are involved in an accident and you are injured due to no fault of your own, this will always result in a personal injury claim, but it may not necessarily lead to a lawsuit.

The decision whether to file a claim or a lawsuit should be based on the severity of the injuries and the nature of the accident. Understanding the basic information about personal injury lawsuits and insurance claims will help you understand what best works for you given your particular circumstances.

You should also talk to a personal injury lawyer before making the decision. He/she will have the training and experience necessary to properly guide you. Hiring a lawyer for the entire process, be it a claim or a lawsuit, also allows you to heal from your injuries and increases your chances of getting a good compensation.

A criminal defence lawyer can advise you if you have a criminal case such as in a hit-and-run.

Personal Injury Insurance Claim

The claims process is simpler than the lawsuit process. The steps to follow are:

  1. You file the claim, effectively informing the insurance company/companies of the at-fault party/parties that you have been involved in an accident and you have injuries (you could, and should be represented by a lawyer in this and the other steps). This should be done as soon as possible as some insurance companies demand that you file a claim within 24 to 48 hours of the accident. You should be honest when filing the claim as an intentional misrepresentation of the facts could have serious legal ramifications.
  2. The insurance company will then launch an investigation into the claim. The investigation involves, among other things, reviewing your medical records, looking at damages to personal property to estimate repair costs, speaking to you and witnesses on what happened, reviewing police reports and any video or photo evidence of the accident, and returning to the scene to take additional videos and photos.
  3. You then write a demand letter to the insurance company. This letter details the facts of the accident and the injuries, and how much you think you should get as compensation.
  4. The insurance company, through its adjuster, will then decide on the merits of your claim based on the results of the investigations and other factors (such perceived strength of your case should you file a lawsuit and your perceived resolve to follow through with a lawsuit).
  5. You and the insurance company will then negotiate a settlement if the insurance companies had decided your claim has merit. You then accept or reject the settlement offer.

Personal Injury Lawsuit

Most personal injury lawsuits are filed after attempts have been made to settle a claim, but the claims have resulted in low offers or no offers at all (when an insurance company denies liability).

You could and should file a lawsuit if you suspect the insurance company is negotiating in bad faith. You can use “bad faith” as grounds to get more financial recompense, but you have to prove this.

You can also file a lawsuit to assist you to make a claim against your own insurance company, using the underinsured or uninsured portion of the policy or if the insurance company has a limit in its policy (most do) and your injuries exceeds this limit.

The steps to follow are:

  1. Before filing the lawsuit, your lawyer will do legal research and fact-finding, where he/she will look at all the relevant documents, collect names of possible witnesses, get your permission to review your medical records, and read relevant case law.
  2. The lawyer will then draft the “Statement of Claim”, which is a document that starts the lawsuit and details the amount of money you are claiming and all the facts of the accident and the injuries.
  3. The defendant (usually the insurance company of the at-fault party) will then respond with a “Statement of Defence”, giving defences and factual contentions.
  4. After this step, your lawyer may prepare “The Reply”, which consists of a final pleading to the defences and factual contentions detailed in the statement of defence.
  5. In Ontario, a 3-hour mediation is mandatory and is the next step. This could, however, be extended. Your lawyer, together with the defendant’s team, will get a mediator. Your lawyer will prepare a mediation brief to give to the other party, which will be a snippet of the entire case. You will be required to attend the mediation alongside your lawyers.
  6. Next is discovery (called deposition in the U.S.). This involves an exchange of all relevant documents in sworn affidavits. Both teams will have time to examine the discovery, where each team will be questioned by the other team’s lawyers under oath on the evidence in front of a court reporter.
  7. Before the trial starts, a Settlement Conference takes place before a judge or a master. There are also “motions” before and during the trial, such as motions to dismiss and motions to strike out certain evidence.
  8. The trial proper will be argued in court in front of a judge and a jury. Witnesses will be presented, examined, and cross-examined. The jury will then decide if the case has merit and if it does, it will make an award.

David CostaMr. David Costa is the founding member of Costa Law Firm leading criminal law division. Mr. Costa obtained his Canadian law degree from the University of Windsor. He can be reached at or 416-535-6329 ext 223.

Sal GrilloFor more than 30 years, Salvatore Grillo has been recognized for helping shape personal injury litigation in the Greater Toronto Area. Mr. Grillo obtained his degree from Osgoode Hall Law School. He can be reached at or 416-614-6000 ext 2015.