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Insurance claims against city for damages from leaky water pipes denied

Property owners remain eligible for compensation under a proposed class action lawsuit
pinhole water leak

THUNDER BAY — While work continues on a proposed class action lawsuit over pinhole leaks in household water pipes, some Thunder Bay homeowners say they have received rejection letters from the city's insurer.

The leaks started showing up in copper pipes in homes and other buildings around the city in 2019, resulting in significant damage in numerous cases.

Many residents paid thousands of dollars out of pocket for repairs and cleanup costs.

After the pinhole leaks came to light, in 2020 the city discontinued the use of sodium hydroxide, a chemical it started adding to the water system in 2018 to reduce corrosion in lead water pipes.

However, the city has never admitted responsibility for any damages that may have been caused by the use of sodium hydroxide.

The proposed representative plaintiff in the class action suit, Patsy Stadnyk, isn't surprised that people who applied to the city for compensation have recently received letters from an insurance adjuster denying their claims.

One letter to a homeowner who experienced leaks in July 2019 and January 2020 states "After engaging in a lengthy investigation regarding the circumstances surrounding your claim, it was determined that the City of Thunder Bay is not responsible for any damages that may have occurred."

It's not clear how many letters like this have been sent out.

Stadnyk noted that the city previously denied liability in response to a lawsuit over pinhole leaks filed by St. Joseph's Care Group.

"They just wanted to make sure, I guess, that they had it in writing," she said, but added that the city "kind of gave us a little bit of false hope."

Stadnyk said "We thought, when they sent the adjuster, maybe the city was going to do something. This was before there was a class action suit. But as it turned out, no. It's a dead end."

Having received those letters, she said people who were counting on the city for some relief are now wondering if they would be covered in any class action settlement.

Under Ontario law, if a judge certifies the class action, any person with a property serviced by Thunder Bay's water system – and who could provide evidence of the damage caused by pinhole leaks –will automatically be included.

But Stadnyk advises people to save any photos of damage, receipts for repairs, and even a section of damaged pipe.

"It's the judge who makes the decision as things go forward," not the City of Thunder Bay, she said.

Toronto lawyer David O'Connor, who's working on the case, said Friday that his firm submitted affidavits in support of a motion for certification some months ago, and believes the city is scheduled to hand in its material before the end of July.

A certification hearing is scheduled for December.

O'Connor said it's not unusual for class action applications to take this long to get to a hearing.

"This case is actually moving at a pace that is fairly good. To get in front of a judge by the end of this year on certification is not a bad outcome."

He cited an ongoing class action against a bank that he's been involved in since 2007, but said it's a much more complicated case than this one.

"I know people want answers, and they'd like relief and some decision from the courts sooner rather than later. We're doing the best we can to get people across that finish line as fast as possible."

There's no estimate of the number of potential claimants, but the Thunder Bay Leaky Pipe Club Facebook group has about 3,900 members.


Gary Rinne

About the Author: Gary Rinne

Born and raised in Thunder Bay, Gary started part-time at Tbnewswatch in 2016 after retiring from the CBC
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