Ombudsman Toronto Report - Enquiry into How the City of Toronto Handles Homeowner Third-Party Liability Claims for Basement Flooding and Sewer Backups

Insurance and Risk Management and Toronto Water should revise the Basement Flooding - General Information brochure to include better information for the public about how the City handles basement flood and sewer backup claims. This information should include: - The fact that making a third-party liability claim against the City does not guarantee payment; - That the City will only pay a claim where the claimant is able to prove that the City was negligent; - Reference to the City's website for information on making a claim against the City. Explain the Claimant's Onus of Proof to Establish Negligence 2. Insurance and Risk Management should ensure that the City's website and all written communications to claimants about the claim investigation process clearly explain that the onus is on the claimant to prove that the City was negligent. Information for the Public Must be Clear and Accurate. 3. Insurance and Risk Management and Toronto Water should work with the City's Strategic Communications division to revise all relevant sections of the City's website to ensure that the public gets clear, consistent and detailed information about how Toronto Water investigates basement floods and sewer backups, and ensure that these sections of the website also provide information about how the City handles third-party liability claims about basement floods and sewer backups. Tell People Reporting to 311 May Make the Difference 4. Insurance and Risk Management, in collaboration with Toronto Water, Legal Services and Strategic Communications, should provide clear information on the City's website about the importance of reporting a basement flood or sewer backup to 311. The information on the website should explain why reporting a basement flood or sewer backup incident to 311 to allow Toronto Water to investigate may play an important part in the claims investigation process. Stop Routinely Asking for a Confidentiality Clause on Settlement 5. Insurance and Risk Management should stop routinely including a confidentiality clause in the Final Release it has claimants sign when settling a claim. This should apply to all third-party liability claim settlements, not just those related to basement floods and sewer backups. The exception will be where the City Solicitor or outside counsel representing the City expressly recommends including a confidentiality clause in a particular case. Develop a Process for Storm Events 6. Insurance and Risk Management, Legal Services and Toronto Water should develop a written "business process" to coordinate the investigation of storm event claims. 7. In developing a business process for storm event claim investigations, Insurance and Risk Management, Legal Services and Toronto Water should consider the following: - Including a definition of a "storm event" for the purposes of grouping third-party liability claims into a storm event category; - Objectives of the storm event claims investigations process; - Sources of evidence to be considered in the storm event claims investigation process; - Outlining the roles and responsibilities of the various actors involved in the storm event claims investigations process; - Establishing/outlining a process to share evidence Toronto Water staff gathers during the storm event claims process with other sections of Toronto Water (e.g. the Basement Flooding Prevention Program); - Developing a communications strategy to: - Implement a schedule to ensure regular communication with claimants about the status of the storm event claims investigations; - Give homeowners information about the negligence claims process, including making homeowners aware of the difference between reporting a flood/sewer backup incident to 311 and making a third liability claim against the City; - Give homeowners information about storm event claims investigations, including general explanations of why some homeowners impacted by a storm event may be successful in their claims while others may not. 8. The City should post information about the storm event claims investigations process on its website. Make Better Use of the Toronto Water Coordinator Position 9. Toronto Water should review the job responsibilities for the Coordinator - Business Process position and examine ways in which third-party liability claims data could be shared with sections of Toronto Water responsible for preventing and addressing basement floods and sewer backups. 2. City Council direct the General Manager, Toronto Water, in consultation with the Director, Insurance and Risk Management, Finance and Treasury Services, and the City Solicitor to report to the General Government and Licensing Committee in the second quarter of 2021 on recommended eligibility criteria and financial implications of providing a one-time no-fault grant for residential property owners and / or tenants in the Rockcliffe neighbourhood of Ward 5, York South-Weston, and other similarly impacted areas, who were uninsurable for basement flooding insurance coverage and reported one or more sewer back-up / basement flooding incidents to the City of Toronto as of a result of storm events during the time period January 1, 2018 to December 31, 2020 inclusive.