Insurance company pursues reimbursement following dismissal of $100 million Wheatley explosion class-action lawsuit

A class-action lawsuit seeking $100 million against the Municipality of Chatham-Kent regarding the explosion that occurred in Wheatley four years ago has been abandoned. Although the lawsuit has been dropped, the individuals involved in initiating the legal action may still face financial consequences.

During a council meeting held one day before the fourth anniversary of the explosion on Aug. 26, 2021, it was disclosed that the lawsuit had been withdrawn. The reason cited for dismissing the case during a procedural hearing was the ample compensation and support services provided to residents, totaling over $8 million.

While it is positive news that the class action suit has been resolved and reflects the extensive efforts made to assist the residents of Wheatley, questions have emerged about the municipality’s intention to recover legal costs from the representative plaintiffs named in the lawsuit. Dave Taylor, the Director of Legal Services, clarified that the decision to pursue legal costs was not made by municipal administration or council.

In cases like this, the municipality is responsible for the initial $250,000 under its insurance policy, with the remainder of the costs covered by the municipality’s insurance company. The insurance company is the entity that decides on major legal steps in the litigation, including the pursuit of legal costs.

A motion was put forward by West Kent Coun. Melissa Harrigan to inform the municipality’s insurance company that Chatham-Kent is renouncing the recovery of its $250,000 insurance deductible related to the class action lawsuit. The motion also instructs municipal staff to communicate with the insurer on this matter and report back to council with further details.

Harrigan emphasized the council’s commitment to supporting Wheatley in its recovery efforts, noting that they have stood behind the town and its residents since the emergency explosion occurred. The motion received unanimous approval from council members, ensuring that Chatham-Kent has control over the portion of legal costs that it can waive.

Despite the challenges faced by the community, the councillors expressed their unwavering support for Wheatley and pledged to provide whatever assistance they can. The unity displayed by council and the province in aiding the town was acknowledged, even though certain aspects of the situation were beyond their control.

In conclusion, the dropped class-action lawsuit against the Municipality of Chatham-Kent raises issues regarding the recovery of legal costs, which are now being addressed through council motions and engagement with the insurance company. The ongoing commitment to support Wheatley and its residents remains steadfast despite the uncertainties surrounding the legal proceedings.