TORONTO — The Alexandria, Va.-based Truck Renting Leasing Association is applauding a move by the Ontario government to cap vicarious liability for owners of rented or leased vehicles.

The Ontario Ministry of Finance introduced vicarious liability reform legislation on Nov. 2, 2005. The proposed law would freeze vicarious liability for owners of rented and leased vehicles at $1 million — and that exposure is also reduced by any amount recovered from the actual operator of the vehicle, whose insurance becomes primary under the proposal.

Ontario is one of a handful of North American jurisdictions with unlimited vicarious liability law, which holds the owner of a vehicle vicariously liable for the actions of the operator of the rented vehicle.

TRALA and its’ Industry Council for Vehicle Renting and Leasing are currently conducting an in-depth review of the legislation to fully assess its impact and to identify any sections that may need improvement.

The vicarious liability problem in Ontario for non-negligent owners of rented and leased vehicles was highlighted last year by a $13 million award against Primus Automotive Financial Services, TRALA says. According to the group, plaintiff’s lawyers in Ontario been permitted to work under contingency fee agreements, which undoubtedly provided encouragement to the trial bar to more aggressively pursue vicarious liability claims in lawsuits.

The Ontario legislature is expected to act on vicarious liability reform legislation in mid-December 2005 within the context of a larger budget bill. In the meantime, TRALA says it will continue working with the ministry and will communicate any concerns in the drafting of the legislation.