Liberty Mutual joins aftermarket fray

Only days after class action suits were started in Quebec against insurers AXA Canada and ING Canada, Liberty Mutual General Insurance in Canada became the next victim of the aftermarkets parts legal fever sweeping North America. With its American parent having a class action suit filed against it previously in the U.S., Liberty Mutual Insurance, the twelfth largest auto insurer in Ontario, was named in a notice of action filed with the Ontario Superior Court of Justice.

Liberty joins an array of insurance companies feeling the impact of the U.S. aftermarket parts class action trial that ended October 8 in Marion, Illinois with a US$1.18 billion award against State Farm Insurance. The plaintiffs had accused State Farm of failing to perform their obligations under its contract with insured motorists and violating the terms of its policies by using non-original equipment manufacturer (OEM) parts, or “aftermarkets” crash parts to repair their insured’s vehicles instead of restoring vehicles to original “pre-loss” condition as promised by company policies.

In the Toronto action, the plaintiff is requesting an order stopping Liberty Mutual from using or requiring the use of parts manufactured other than by the original equipment manufacturer, damages in the sum of $250 million, and punitive damages in the amount of $10 million.

Plaintiff Terrance O’Brien claims his damaged car was repaired with inferior, replacement parts supplied by a source other than the original equipment manufacturer at the express direction of the insurer.