Followed this thread with interest, it is a sad case all round. I don't know the full story either. From this:
http://blogs.ajc.com/news-to-me/2014/04/28/driver-kills-teen-cyclist-sues-his-parents/ it sounds like the driver was speeding, however I'm not sure if it truly made a difference or not. It also sounds like the kids' parents were first to file a lawsuit against the driver -pretty ballsy as it appears they didn't have lights or reflective vests at night. Add in the fact the driver's husband was a cop and it can get murkier.
However (and I'm not taking any side here) and granted I don't know the Canadian system, at least in the States this may not be as ridiculous as it sounds. If you require medical care (including counselling) it can be pretty expensive (a million dollars expensive? I don't know but certainly thousands -possibly tens of thousands of pounds -and the insurance company can and will pursue the person at fault to sue them or their insurance company for the costs.) Or a person with no insurance can do similarly. As bad as it sounds, why shouldn't an individual do this? If it's someone elses fault, why should they be stuck with a potentially very expensive medical bill?
FYI: I was out running and strained my calf muscle and had to undergo physical therapy. At around the same time, I was involved in an automobile accident. I was subject to threatening letters from my health insurance company demanding to know if this was a result of the automobile accident (and no, it wasn't due to any concern on their part either!). I put off responding as much as I could as I pay a hefty health insurance premium every month and I resented this intrusion immensely. In the end I was threatened with loss of coverage (which they can do) unless I answered. I did so extremely begrudgingly -and with a new found knowledge that insurance companies clearly scan accidents here (I did not provide any details of my health insurance coverage at the accident either).
Anyway, sadly no winners here, but I do think there are two sides to a story like this, and I'm not sure we're getting them.