What Is a Notice Letter?
If you have sustained an injury that is the result of the negligence of another person, you could have an action for damages. Your entitlement to damages begins at the moment you suffer your loss. However, as anyone who has brought a lawsuit before knows, you will not get paid for a long time.
Since you are entitled to your damages right away, but you often have to go through the legal process to get them, the court allows for something called prejudgment interest. This interest accumulates on the money you are owed before you are paid it.
In order to claim prejudgment interest from a motor vehicle claim, you must notify the person who caused your damages that you are hurt and will be seeking damages from them. In personal injury law, we call this a "notice letter".
There is no standard format for a notice letter, and every law firm has a slightly different version. Generally speaking, the letter should identify the injured person, how and when they were injured and inform the recipient that a lawsuit against them is being considered. In Ontario, most people who receive a notice letter immediately pass it on to their insurance company who handles the claim from there.
The Ontario Court of Appeal recently considered the amount of prejudgment interest in motor vehicle claims in a pair of cases: Cobb v. Long Estate O.J. No. 4830 and El-Khodr v. Lackie, O.J. No. 4828.
The Court clarified that prejudgment interest is to be calculated by the Courts of Justice Act section 128(2): "the bank rate at the end of the first day of the last month of the quarter that precedes the quarter in which the proceeding was commenced". An action commenced in the fourth quarter of 2017, for example, would have a prejudgment interest rate of 0.8%.
A notice letter entitles an injured party to claim this interest in a motor vehicle tort claim. It also has other benefits, such as the preservation of evidence. For example, in a slip and fall case, it is important to notify stores with video cameras quickly before they delete the crucial evidence for the case.
Lastly, a notice letter is critically important if a municipality could be at fault. According to the Municipal Act section 44(10): "no action shall be brought for the recovery of damages under subsection 2 unless, within 10 days after the occurrence of the injury, written notice of the claim and of the injury complained of has been served upon or sent by registered mail to the Clerk of the Municipality. There are some exceptions to this rule if a reasonable explanation for the delay can be given, but it is best not to take the risk of your action being stopped before it can even get started.
A notice letter is the first step in most lawsuits. They are important because they entitle the plaintiff to prejudgment interest and they help preserve evidence. If a municipality could be at fault, they need to be sent within 10 days of the injury. Consulting with a lawyer quickly after an injury is important so that a notice letter can be sent to the right parties at the right time.