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HEARSAY - June 2017: In This Edition

Case Comments and Articles
CDL Foundation $5000 Essay Prize Winner The DEFENCE WINS… CDL General

Case Comments and Articles

DEFENDING DISABILITY INSURANCE CLAIMS: ALWAYS REVIEW THE COLLECTIVE AGREEMENT!

By Erin H. Durant
Borden Ladner Gervais LLP

A recent decision of the Ontario Court of Appeal highlights the importance of reviewing a collective agreement when defending a claim for disability insurance benefits. If a plaintiff is insured pursuant to a unionized employer’s group disability insurance policy, the plaintiff may need to file a grievance regarding the denial of benefits rather than commence an action. (Barber v. The Manufacturers Life Insurance Company (Manulife Financial), 2017 ONCA 164).

In Barber, the plaintiff became disabled from her employment as a police constable in 2009. She applied for long-term disability benefits under a group policy of insurance provided by Manulife. Manulife paid benefits until 2013 and then terminated the plaintiff’s benefits. The collective agreement between the police services board and the plaintiff’s union, which governed the plaintiff’s employment, required the police services board to offer disability insurance coverage to the plaintiff.

The plaintiff commenced an action in the Ontario Superior Court of Justice alleging that benefits were improperly terminated. She alleged that she had a contract for insurance with Manulife through her employer.

Manulife’s counsel brought a motion to have the claim dismissed on the basis that the Superior Court did not have jurisdiction over the subject matter of the action. The motion judge concluded that the language of the collective agreement made the plaintiff’s claim subject to arbitration. The matter was appealed to the Court of Appeal.

The Court of Appeal found that the resolution of the matter turned on the language of the collective agreement. Both parties agreed that the essential character of the dispute concerned the entitlement of the plaintiff to long term disability benefits. Accordingly, the Court of Appeal had to consider whether the claim’s essential character “arose from the interpretation, application, administration or violation of the collective agreement.” If so, an arbitrator, not a court, had the exclusive jurisdiction to decide the issue (Weber v. Ontario Hydro, [1995] 2 S.C.R. 929).

The court referred to well-established labour arbitration jurisprudence which had developed four general rules that are applied to determine whether a benefit entitlement claim is subject to arbitration under a collective agreement. The four categories are:

  1. where the collective agreement does not set out the benefit sought to be enforced, the claim is inarbitrable;
  2. where the collective agreement stipulates that the employer is obliged to provide certain medical or sick-pay benefits, but does not incorporate the plan into the agreement or make specific reference to it, the claim is arbitrable;
  3. where the collective agreement only obliges the employer to pay the premiums associated with an insurance plan, the claim is inarbitrable; and
  4. where the insurance policy is incorporated into the collective agreement, the claim in arbitrable.
The plaintiff submitted that the subject dispute fell within category 3 as the employer’s only obligation was to offer long-term disability coverage and remit premiums. The plaintiff submitted that since the employer had fulfilled its obligations in this regard, the current claim was outside the scope of the collective agreement. She argued that the claim arose out of the application of the Policy and the decision to deny benefits, not the collective agreement.

The plaintiff also argued that the dispute did not fall within Category 2 because the Collective Agreement did not oblige the employer to pay or to provide long-term disability benefits and that the employer only offers coverage and pays the premiums while Manulife provided the benefits. She argued that the dispute did not fall under category 4 because the collective agreement did not incorporate the insurance policy – it merely referred to the Policy number and provided a short description of coverage.

The Court of Appeal did not provide an excerpt from the collective agreement but provided a summary of the applicable language.  However, a copy of the agreement can be obtained from the Ontario Ministry of Labour Collective Agreements database. Article 18 established the Plaintiff’s rights to LTD benefits. The article did more than merely oblige the employer to pay premiums for insurance – the article covered certain terms, the amount of the disability benefits and the definition of total disability. The employer maintained the right to change insurers as long as the benefits defined by the collective agreement were continued.

The Court of Appeal found that the degree of detail provided in the Collective Agreement provided on the required terms of the LTD policy demonstrated that the collective agreement itself was the root of the plaintiff’s contractual entitlement to receive the relevant disability insurance benefits.  Accordingly, the dispute regarding the plaintiff’s benefits was within the jurisdiction of an arbitrator and the plaintiff’s claim was properly dismissed.

Disability insurers and their counsel should carefully consider at the outset of a new claim whether or not the plaintiff is a unionized employee and whether the plaintiff’s collective agreement requires that an arbitrator determine the dispute. Most collective agreements contain strict timelines under which an employee is required to submit a grievance to arbitration.  If the plaintiff has missed this timeframe, he or she may be out of time to commence a proceeding regarding his or her benefit entitlements. 

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CAN YOU BELIEVE YOUR EYES? HOW PHOTOS CAN DISTORT THE TRUTH

By Joshua J. A. Henderson
Zuber and Company

A picture is worth a thousand words and if you let the opposing lawyer speak for a thousand words you might just find yourself in a pickle. The photo below depicts an accident scene from an actual case I was involved in last year. It is a Google images photo from August 2011, near Milton, Ontario, and the dump truck on the intersecting road is unrelated to the incident in question, but it clearly demonstrates how photos can mislead. As a rhetorical exercise, look at the dump truck and make an educated guess as to its speed, location, and relative driver attentiveness as he approaches the intersection. We’ll come back to it at the end of the article.

Google images photo from August 2011, near Milton, Ontario

Google Images photos and satellite views are regularly tendered in court without the need to subpoena the Google photographer in question to prove the image. Actually most photographs including police reconstruction photographs, Facebook photos, surveillance videos, and municipal overhead survey photographs can also be adduced without the need to call the photographer or town registrar. This is a useful time saving technique that is appropriate in many circumstances but a lawyer who is faced with the request to admit photographic evidence without proof should consider the request carefully.

Sopinka in his seminal book on Evidence writes at section 18.79:
18.79 It has been held that the admissibility of photographs depends upon: (1) their accuracy in truly representing facts; (2) their fairness and absence of any intention to mislead; (3) their verification on oath by a person capable of doing so. It is not always necessary to have the sworn evidence of the person who took the photograph. Another witness who is familiar with the objects shown in the photograph may be permitted to identify it. Similarly, a person must be able to authenticate the accuracy of a videotape to represent the matter depicted or the reliability of an unmanned camera to accurately record the event.[1]
The test for admission seems generous to the party wishing to tender the evidence and courts often exercise their discretion to admit the evidence, but opposing counsel should carefully consider whether the photographs are accurate representations of what they purport to demonstrate.
 
Professor Wigmore, in Evidence (vol. 3, 1970 ed), takes the position that photographs can clearly mislead but that is no different from a normal witness who can clearly mislead. Prof. Wigmore states:
The objection that a photograph may be so made as to misrepresent the object is genuinely directed against its testimonial soundness. It is true that a photograph can be deliberately so taken as to convey the most false impression of the object. But so also can any witness lie in his words, and when a qualified observer is found to say, “This photograph accurately represents the fact which I observed.” In the circumstances, excluding the photograph as misleading may be begging the very question which the jury ordinarily have to decide; it may be as anomalous as if the judge were to order a witness from the stand because he was believed by the judge to be lying. Actual perjury should not be thus determined in advance by the judge – not more for photographic than for verbal testimony.
But with respect, Prof. Wigmore misses the crux; a witness who lies on the stand can be cross-examined to expose the truth, but a photo that misrepresents the scene cannot be cross-examined effectively. The only way to counteract the misleading photo is to tender another photo that proves the deception. 
 
The Ontario Courts have recognized that truth and accuracy in photos is crucial and distortions in dimensions of space can lead to their inadmissibility. In R. v. Maloney, [1976] O.J. No. 2446, the judge considers videotapes;
11     The recurrent theme throughout the cases is that for a proper foundation for admissibility of videotape material it must be established that it is a true and accurate reproduction. The videotape made during the game and the film are verified by the respective cameramen who took the same at Maple Leaf Gardens on the night in question. Portions of each of these materials were transferred to a three-quarter-inch video cassette for presentment and use at this trial.

24     In determining the admissibility of this part I must go back to the two key words, "true" and "accurate". The Shorter Oxford English Dictionary defines those words as follows:
Accurate -- Exact; correct. When related to a thing: Confirming with a standard of truth; precise; correct.
True -- Consistent with facts; agreeing with reality; representing the thing as it is; exact; accurate; precise.

25     The words "truth and "reality" are defined in that same dictionary to mean:
Truth -- Conformity with fact; agreement with reality.
Reality -- That which has an existence in fact and not merely in appearance.

26     In my view, reality therefore includes not only material objects, but also the immaterial such as light, sound and the dimensions of space and time.
Moreover, where a photograph or videotape is not an actual and true representation of the facts, it will not be admitted. In Toronto Star Newspapers Ltd. v. Southern Ontario Newspaper Guild, Local 87, [1992] O.L.A.A. No. 1, the court gave an example of where a videotape is not an accurate representation of the facts.
9     The admissibility of videotape material which does not accurately represent the facts was considered by two Ontario County Court judges when considering criminal charges laid against professional hockey players. In R. v. Maloney (No. 2) (1976), 29 C.C.C. (2d) 431, videotape film depicting certain events at their actual speed and in the proper sequence was accepted into evidence. Slow-motion film and film containing excerpts which were out of sequence, however, were not accepted. In R. v. Williams (1977), 35 C.C.C. (2d) 103, a videotape was accepted into evidence when shown at normal speed. Parts of the same tape when shown in slow motion, however, were held not to be admissible in evidence.
This issue was further discussed in a 2004 Advocates Society Journal article, entitled “The power and dangers of demonstrative evidence” 23 Advocates Soc. J. No 2, 14-20, by Damian J. Rogers[2], raises some excellent points as to how an apparently normal photograph can distort the image. The main concern for our purposes is that;
8  A complete lesson in photography is beyond the scope of this article, but some basics can usefully be considered. Lens type and camera position/perspective provide the greatest possibilities for the distortion of reality in photographs; however, the accuracy of a photograph is also affected by lighting, film type, lens filters, camera type and quality, length of exposure, and the development process used. Wide-angle lenses, for example, have the effect of exaggerating the size of objects close to the lens. Wide-angle lenses also appear to increase the distances between objects close to the camera and those far away from it. Telephoto lenses have an opposite effect: they create a compressed perspective that suggests that objects are much closer together than they are in reality.

9  In some cases, the perspective of a photograph will matter little. If the only purpose of a photograph is to show the text on a roadway sign, it will matter little whether the sign appears larger in relation to objects behind it because of a trick of perspective. If, however, its purpose is to show the position of a sign relative to that of an intersection further down the road from the sign, perspective becomes of substantial importance. If the case involved a motor vehicle accident and the plaintiff took the position that the driver had ample time after seeing a "stop ahead" sign to begin slowing, a photograph that lengthened the apparent distance between the sign and the intersection would be of considerable value to the plaintiff. The defendant, in contrast, might prefer a photograph taken with a telephoto lens that would compress perspective, silently supporting the defendant's position that there had been too little time to slow.9 A witness, shown either the plaintiff's or the defendant's photograph, might accept either as an accurate depiction of the intersection; the frailty of memory is such that while witnesses will likely generally recognize the subject of the photograph, they may not remember the subject so clearly that they will detect a slightly skewed depiction of it.
The potential for misleading photographs to induce false memories in witnesses is significant and problematic. Distortion in the photos will lead to distortion of witness testimony. To protect against this Geoffrey Adair, in his classic text, On Trial, writes that the method and circumstance of preparation of demonstrative aids (photos) must be properly proven.
The introduction of demonstrative evidence (real or demonstrative aids) requires the laying of a proper foundation through a live witness in order to establish (1) the method and circumstances of the preparation of the evidence; (2) the authenticity of same as accurately reflecting the facts recorded therein; (3) the utility of the evidence in the trial process; (4) the relevance of the real evidence or demonstrative aid; and (5) the proposed use of same.
Moreover, the Supreme Court of Canada in R. v. Nikolovski¸ [1996] 3 S.C.R. 1197, has stated that for a video or photo to be admitted it must be proven that it has not been altered or changed.
28     Once it is established that a videotape has not been altered or changed, and that it depicts the scene of a crime, then it becomes admissible and relevant evidence. Not only is the tape (or photograph) real evidence in the sense that that term has been used in earlier cases, but it is to a certain extent, testimonial evidence as well. It can and should be used by a trier of fact in determining whether a crime has been committed and whether the accused before the court committed the crime. It may indeed be a silent, trustworthy, unemotional, unbiased and accurate witness who has complete and instant recall of events. It may provide such strong and convincing evidence that of itself it will demonstrate clearly either the innocence or guilt of the accused.
But where there is a lack of certainty concerning the facts surrounding the taking of the original photos, it is encumbent on that party intending to tender the photos as evidence to prove sufficiently to the court that there is no distortion in the photos. This would typically require calling of the original photographer.
 
So with all that being said, let’s revisit the original photograph at the top of this article. If you were like me, when you saw the photograph of the dump truck approaching the intersection on a backcountry road you probably assumed that the driver was either driving around 80 km/h or slowing down for a stop sign if the intersection was governed by one. You probably assumed that the driver was in the right lane and relatively attentive to his surroundings, but not hyper vigilant.

However, Google photographs taken from different angles demonstrates that the first picture misled us into making false assumptions. In fact, there is no driver in the vehicle at all, it is parked on the left side of the road in the middle of a construction zone. Which just goes to show you can’t trust a picture any more than you can trust a thousand words.

Google photographs taken from different angles

[1] See also Wigmore on Evidence, McCormick Evidence, and Evidence: Principles and Problems, by Delisle, Stuart & Tanovich. Rex v. Bannister, 1936 N.B.J. No. 2, Simpson Timber Co. (Sask.) v. Bonville, 1986 S.J. No. 426; R. v. Maloney, [1976] O.J. No. 2446, R. v. Nikolovski, [1996] 3 S.C.R. 1197, Edmonton (City) v. Lovat Tunnel Equipment Inc., [2000] A.J. No. 379.

[2] The 2004 Advocates Journal article is base in large part upon a 1984 Law Review Article; Benjamin V. Madison III, Seeing Can Be Deceiving:Photographic Evidence in a Visual Age – How Much Weight Does it Deserve?, 25 Wm. & Mary L. Rev. 705 (1984). 

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MIG LAT STATS: THE LICENSE APPEAL TRIBUNAL ONE YEAR IN

By Devan Marr
Samis and Company

Overview

 
In the year since the LAT took over, MIG decisions have made up a significant portion of the reported decisions. Claimants who fall within the Minor Injury Guideline are limited to $3,500.00 in available medical and rehabilitation benefits. In comparison, non-MIG individuals are entitled to access $50,000.00 in medical rehabilitation benefits and $36,000.00 in attendant care benefits or $65,000.00 in combined med/rehab and attendant care for accidents that occurred after June 1, 2016. Classification within the MIG appears to be one of the first issues claimants are disputing. The results have been largely unfavourable to claimants seeking to remove themselves from the MIG. In reviewing the available cases, the most glaring issue that presents itself is the failure of parties to adapt to the fact that the vast majority of LAT hearings will be heard in writing. It is apparent that counsel have been having difficulty marshalling the evidence in an effective manner to persuade adjudicators to rule in their favour.
 

The Stats


In the year since claimants began filing applications, 74 LAT decisions have been released. Approximately one out of every four of these decisions dealt with the Minor Injury Guideline as an issue in dispute. With eighteen released decisions in total it is immediately noticeable that Insurers have been successful 72% of the time, with thirteen favourable decisions. Claimants have only been successful in removing themselves from the MIG on five occasions. Of these five decisions, claimants were removed for psychological impairments twice. Two decisions appear to have seen the Insurer concede the MIG argument but focus on reasonable necessity of the treatment plans and in one decision, an Insurer was unable to raise the issue of the MIG due to s. 38 notice issues. On two of the occasions where a claimant was removed from the MIG, some treatment plans in dispute were still found to be properly denied as not being reasonable and necessary.  Of the 18 decisions, only 1 has been an oral hearing, and 1 was a hybrid hearing. The rest appear to have been written hearings.
 

Whose Onus Is It?


The question of which party bears the burden of proving the Claimant falls outside of the MIG appears to remain settled with the decision of Scarlett v. Belair, 2015 ONSC 3635.
 

What Injuries are minor?


The Schedule defines a “minor injury” as one or more of a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and includes any clinically associated sequelae to such an injury. The majority of the MIG decisions deal with injuries that fall within the above definition.

With one exception, it appears an accident related psychological diagnosis will be sufficient to remove a claimant from the MIG.

It remains unclear whether an assertion that a claimant is suffering from Chronic Pain Syndrome/Chronic Pain will be accepted without an expert opinion specifically addressing the issue and whether it will be considered as taking the claimant outside of the MIG. In three reported cases, Adjudicators found that an Claimant’s assertion that she suffered chronic pain syndrome was unsupported by the medical evidence, and specifically took note that the claimant’s physiatrist never provided a diagnosis. In M.K. v. Dumfries Mutual Insurance Company, a claimant’s assertion that her injuries had become chronic and therefore fell outside the MIG was not accepted. Adjudicator Theoharis found:  
there is no evidence that the Claimant was referred to a chronic pain specialist, or that she was assessed by a chronic pain specialist.  A health practitioner noting that self-reported pain may be chronic without conducting further medical tests does not satisfy the onus to establish that the injuries fall outside of the MIG.
 

Will pre-existing injuries get you out of the MIG?


As with the issue of “minor injury” Claimants are faring poorly on this ground. Adjudicators have universally denied Claimant’s claims that are advanced on this basis. A significant issue appears to be a failure to identify how the pre-existing conditions relate to the accident, and why they will result in prolonged recovery.

It appears Adjudicators are also taking seriously the requirement that a pre-existing condition be recorded prior to the accident if it occurred after February 1, 2014. In L.C. v. Aviva Insurance Company of Canada, the Adjudicator declined to accept a pre-existing degenerative spine condition as it was only identified three years after the subject accident. Similarly, in M.M. v. Wawanesa, the adjudicator put no weight on the records of the family doctor which were created after the subject accident and found, “[t]herefore, Dr. Beaton’s records cannot and do not document a pre-existing condition that prevents the Claimant from achieving maximal recovery under the MIG.
 

Section 38 Notice Issues


The extent to which a deficient section 38 notice will impact a MIG decision remains uncertain. Notice issues have been raised in four decisions. Insurers have been successful in three of these decisions. Adjudicators have been willing to interpret an Insurer’s overall conduct to satisfy section 38 notice requirements, rather than a rigid approach utilized in previous FSCO jurisprudence. With only four decisions addressing notice issues, it is still unclear how much clout the strict FSCO jurisprudence continues to have. It is obvious that some Adjudicators are following the requirements of section 38 strictly, while others are willing to review overall conduct of the Insurer to impute appropriate notice.
 

What evidence is being used?


The evidence being used most at these hearings appear to include the usual clinical notes and records of treating health care providers. Medical-legal reports obtained on behalf of the Claimant appear to be used in a minority of cases. Uniformly, Insurers are utilizing the section 44 reports they relied on for the initial denials. There has been a significant emphasis on OCF-3 disability certificates, no doubt in part because the LAT requires their inclusion with all Case Conference Summaries. Adjudicators have also been placing weight on treatment and assessment plans (OCF-18) and treatment confirmation forms (OCF-23) where no pre-existing condition is noted to undermine the Claimants claim to a pre-existing injury. In a handful of decisions, affidavit evidence is being utilized to bolster a Claimant’s decision where a written hearing is taking place. These affidavits have generally been ineffective, and in the context of some of the recent Non-Earner Benefits cases, been seen as self serving with little weight.

Insurers continue to rely on surveillance with mixed results. In W. L. v. Co-Operators General Insurance Co., Adjudicator Sewrattan reviewed surveillance but noted that it was not particularly helpful to determine whether the Claimant was, or was not, suffering from ongoing pain. The surveillance appeared to demonstrate the claimant as being fairly active and utilizing extremities with minimal difficulty. In contrast, in W. A. v. Cooperators General Insurance Co., surveillance was used effectively. The report outlined activities carried out by the claimant in May, 2016, including driving a car and attending at a phone store and flea market booth on two different days. The surveillance showed that the claimant remained in the store for 8.5 hours and at the flea market for about 6 hours on the days in question. The claimant was observed to enter and exit his car, walk and climb stairs, carry light objects such as a bag of takeout food without “any obvious signs of physical restriction”. This surveillance was used to undermine the claimant’s credibility relating to the disputed income replacement benefit and no doubt played a role in the determination of the MIG issue.
 

What cases are being cited?


Prior FSCO jurisprudence is being referenced sparingly. LAT Adjudicators have made it very clear that they are not bound by prior FSCO decisions. The average LAT decision cites a single case, although most decline to cite any previous jurisprudence.
 

Common themes and Concluding Comments


The common theme that has emerged to date is a failure to muster the appropriate evidence by claimants to prove their case. The fact that claimants can no longer expect to rely on in-person testimony of their experts or treating physician has resulted in significant difficulties at hearings. Adjudicators appear to be unwilling to make any logical leaps or draw conclusions from the medical evidence when the Insurer has provided a competing report that specifically addresses the issues in dispute.

In contrast, due to the need to adjust and review a claim on an ongoing basis, Insurers often come prepared to a hearing with expert reports which specifically address the questions in dispute. This has led to Adjudicators accepting their evidence more often than not.

Overall, it is clear that Insurers have largely adapted quickly and effectively to the changes brought by the LAT. The burden to prove entitlement to enhanced benefits outside the MIG at the LAT remains challenging for claimants. While the initial decisions appear to heavily favour Insurers, the vast majority of these successes have resulted from a failure by claimants to obtain proper evidence to meet their burden, rather than any specific strategy on the part of Insurers. The trend for Insurer victories is likely in large part due readily available opinions addressing the issues in dispute which have been obtained through the proper adjusting of a file.  

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NINTH CIRCUIT FINDS NO COVERAGE UNDER CRIME POLICY FOR CLIENT FUNDS LOST IN SOCIAL ENGINEERING FRAUD


By David S. Wilson and Chris McKibbin
Blaney McMurtry LLP   

In the March 9, 2017 decision of Taylor & Lieberman v. Federal Insurance Company,[1] the Ninth Circuit Court of Appeals affirmed a decision of the U.S. District Court for the Central District of California holding that a business management firm did not have coverage in respect of client funds which it was fraudulently induced to wire overseas. 
 
While the District Court had held that the insured had failed to establish that it had sustained any “direct” loss at all,[2] the Ninth Circuit affirmed the result on other grounds, holding that the insured had also failed to establish that the loss came within the substantive requirements of any of the Forgery, Computer Fraud or Funds Transfer Fraud insuring agreements. 
 

The Facts

 
Taylor & Lieberman (“T&L”) was an accounting firm which also performed business management and account oversight services for various clients, including the client in issue.  Clients’ funds were held in separate bank accounts maintained with City National Bank.  Clients granted Powers of Attorney over their accounts to a designated individual at T&L, permitting transactions to be made in the accounts.
 
A fraudster obtained access to the client’s email account and sent two emails from that account to a T&L employee, as follows:
  • The first email directed the employee to wire $94,280 to an account in Malaysia.  The employee did so, and then sent a confirming email to the client’s email account.
  • The next day, the employee received another email from the client’s account directing her to wire $98,485 to an account in Singapore.  The employee again complied, and again sent a confirming email to the client’s email account.
The employee then received a third email, purportedly from the client, but sent from a different email address.  The employee contacted the client by phone, and discovered that all three emails were fraudulent.  T&L was able to recover some of the funds, but had to reimburse its client and incurred a net loss of nearly $100,000.
 
T&L submitted a claim under each of its Forgery Coverage, its Computer Fraud Coverage and its Funds Transfer Fraud Coverage.  The District Court held that each of these coverages required “direct loss sustained by an Insured” and that, as a matter of law, no direct loss had been sustained.
 
On appeal, the Ninth Circuit did not disturb the finding with respect to direct loss, but affirmed the result on the basis that T&L had failed to establish that the loss came within the scope of any of the insuring agreements. 
 

The Forgery Coverage

 
The Ninth Circuit quickly dismissed T&L’s contention that this insuring agreement’s requirement of a “Forgery or alteration of a financial instrument” did not require proof of a “Forgery” of a financial instrument, because the insuring agreement required only proof of an alteration of a financial instrument or a free-standing “Forgery” of any document, of any type.  The Court held that the insuring agreement plainly required either a “Forgery” or an alteration of a financial instrument. 
 
More substantively, the Court rejected T&L’s contention that the emails to T&L were financial instruments:
Here, the emails instructing T&L to wire money were not financial instruments, like checks, drafts, or the like.  See Vons Cos., Inc. v. Fed. Ins. Co.  …  (C.D. Cal. 1998) (holding that wire instructions, invoices, and purchase orders were not “documents of the same type and effect as checks and drafts.”).  And even if the emails were considered equivalent to checks or drafts, they were not “made, drawn by, or drawn upon” T&L, the insured.  Rather, they simply directed T&L to wire money from T&L’s client’s account. In sum, there is no forgery coverage.

The Computer Fraud Coverage

 
The Computer Fraud insuring agreement required T&L to demonstrate “an unauthorized (1) “entry into” its computer system, and (2) “introduction of instructions” that “propogate[d] themselves” through its computer system.”  The Court held that the sending of an email, without more, did not constitute an unauthorized entry into T&L’s computer system.  Further, the emails were not an unauthorized introduction of instructions that propagated themselves through T&L’s computer system:
The emails instructed T&L to effectuate certain wire transfers. However, under a common sense reading of the policy, these are not the type of instructions that the policy was designed to cover, like the introduction of malicious computer code.  …  Additionally, the instructions did not, as in the case of a virus, propagate themselves throughout T&L’s computer system; rather, they were simply part of the text of three emails.

The Funds Transfer Fraud Coverage

 
The Funds Transfer Fraud insuring agreement indemnified against:
fraudulent written, electronic, telegraphic, cable, teletype or telephone instructions issued to a financial institution directing such institution to transfer, pay or deliver Money or Securities from any account maintained by an Insured Organization at such Institution, without an Insured Organization’s knowledge or consent.
The Court held that the requirements of the insuring agreement were not met: 
This coverage is inapplicable because T&L requested and knew about the wire transfers.  After receiving the fraudulent emails, T&L directed its client’s bank to wire the funds.  T&L then sent emails confirming the transfers to its client’s email address.  Although T&L did not know that the emailed instructions were fraudulent, it did know about the wire transfers.
 
Moreover, T&L’s receipt of the emails from its client’s account does not trigger coverage because T&L is not a financial institution.
As a result, there was no coverage available under the Federal policy. 
 

Conclusion

 
Following the Fifth Circuit’s decision in Apache,[3] the Ninth Circuit’s decision in Taylor & Lieberman provides another example of a clear trend on the part of the courts to refuse to find coverage for social engineering fraud losses under the “traditional” crime policy coverages (typically, computer fraud and funds transfer fraud coverages, but occasionally, as here, other coverages as well).  The proliferation of social engineering frauds has created a new exposure for insureds, and fidelity insurers have responded by creating discrete social engineering fraud coverages.  Like Apache, Taylor & Lieberman serves as a cautionary tale to businesses (and to their brokers) of how a business may be exposed to an uninsured loss in the event that it does not maintain such coverage.
 
Taylor & Lieberman v. Federal Insurance Company, 2017 WL 929211 (9th Cir.)


[1] Taylor & Lieberman v. Federal Insurance Company, 2017 WL 929211 (9th Cir.). 

[2] Taylor & Lieberman v. Federal Insurance Company, 2015 WL 3824130 (C.D. Cal.).

[3] Apache Corporation v. Great American Insurance Company, 2016 WL 6090901 (5th Cir.).  

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THE LOW-DOWN ON PIPEDA REQUESTS IN PERSONAL INJURY CASES

By R. Lee Akazaki, C.S., B.A. (Hons.)
J.D. 

Seemingly out of nowhere, institutional litigants, insurers and the third-party vendors they retain to support their obligations in responding to claims have been inundated with requests for disclosure on pain of complaints or actions to collect damages under the Canadian federal Personal Information Protection and Electronic Documents Act (PIPEDA).  In some instances, parties or their lawyers directly approach non-parties such as medical experts and private investigation companies and demand production of documents separately from any disclosure procedures in the claims or lawsuits.

It is hard to point to any single rationale for employing the resort to the federal privacy legislation, except that obtaining access to personal information is probably not one of them.  Traditionally, a party to a personal injury lawsuit would, through his or her lawyer, be the conduit for information in health records, employment files and other personal data.  The defendant or respondent would be the one making the disclosure request, in order to verify a claim or instruct a medical expert in advance of a medical examination.  If the plaintiff or claimant wanted to obtain the independent medical examiner’s notes, he or she would ask for them from the defendant or insurer’s counsel.  It is therefore counter-intuitive for the injured party to be making the PIPEDA request of the defendant or respondent.  Approaching experts and other hired witnesses behind the back of an adverse party in litigation is also an ethical grey area.

So why would anyone make such a request?  The reasons for casting the PIPEDA net can include:

  • gaining access to draft reports, to obtain evidence of undue influence on court experts
  • obtaining billing records to discredit experts on the basis of payments received to perform examinations and give opinions
  • investigation of communications to look for information of bias or bad faith
  • provoking an adversarial contest with an independent witness, to be used to discredit the witness’ independence at trial
  • launching a complaint and damages suit for slow or inadequate compliance with disclosure requests

There need not be a particular thought-out strategy, in that each request can potentially serve one or more purpose such as the ones outlined above.  Where the law firm sends out “PIPEDA requests” as a matter of course, on a template, the practice is not dissimilar to the practice of bulk demand letters that have come under increased scrutiny by Ontario’s Law Society: LSUC v. Deanna Lynn Natale; and legal ethics academics: Salyzyn, “Zealous Advocacy or Exploitive Shakedown?”.

The purpose of this article is not to delve into the particular ethics or legalities of these methods or tactics.  Rather, it is to point out some basic misunderstandings of PIPEDA that these targeted efforts seek to create or exploit.

Purpose of PIPEDA to Regulate Information Retention in Commercial Activity


For those who remember, the legislative history leading to the 2000 enactment of PIPEDA was pretty straightforward.  As the Canadian Privacy Commissioner’s Guide to the legislation shows, the Act was driven by Industry Canada as a means of promoting public confidence in the new digital economy.  The Office of the Privacy Commissioner was placed in charge of administering the Act because of its existing expertise regulating the collection of information by federal government agencies.  A random search of Privacy Office decisions and activity would show that the purpose of the regime is to allow Canadians access to data held by businesses, such as financial institutions and credit rating bodies.

The use of the legislation to gain advantages in injury litigation or insurance claims therefore falls outside the purpose of promoting consumer confidence when they shop for clothes online, or when applying for financing on a new car.  Therefore, the first question that one must ask as a recipient of a “PIPEDA request” in the course of such litigation or claims is whether the custodian of the personal information is engaged in a “commercial activity” when it obtained the information.

The scope of PIPEDA has been interpreted by the courts to include parties collecting information regarding an insurance claim, such as a claim for no-fault accident benefits following an auto accident.  On the other hand, information such as surveillance collected during the course of a defence of a tort action has been held not to be commercial in nature, because business before the courts is not commercial: State Farm Mutual Ins. Co. v. Canada (Privacy Comm.)  A recent decision of the Privacy Commissioner, published in 2017, has confirmed that its policy now reflects State Farm.  PIPEDA cannot be used to circumvent the court rules for obtaining disclosures.
 

Personal Information, Not Business Information, is Protected


As one might gather from the legislative purpose, the Canadian Parliament’s intention was to allow individuals in the digital economy to gain ease of access to information that businesses collect from them, to ensure the data is secure, and to afford the opportunity to correct information such as bad credit ratings.  The legislation did not contemplate providing access to the businesses’ own information.

The nexus between personal information and the use made of it has been the subject of controversy.  Individuals seeking advantages in claims or litigation have cited PIPEDA in seeking draft reports, billing information and other work product information passing between service providers such as medical experts and those who hire them, such as insurers and employers.  While each case must be considered on its individual merits, the overriding principle is that individuals are allowed access to the personal information obtained from them, such as doctors’ history notes and medical records supplied by an insurance adjuster.  PIPEDA cannot be cited as authority for seeking information beyond what the individual has actually provided or the use that has been made of the information.  The ruling in Windowe v. Rousseau is often misstated as rationale for complete disclosure from a doctor performing an independent examination.  In fact, the Federal Court held that access was only available to the notes containing the personal information and the final report provided to the insurer:
In light of the Privacy Commissioner’s recognition that there are in the notes information which is personal to Mr. Rousseau and information which is not, it may be said that in the end, Mr. Rousseau has a right of access to the information he gave the doctor, and to the final opinion of the doctor in the form of the report to the insurer. In accordance with Principle 4.9.1. of Schedule I to the PIPED Act, this enables Mr. Rousseau to correct any mistakes in the information he gave the doctor or which the doctor noted, as well as any mistakes in the doctor’s reasoned final opinion about his medical condition. But the process of getting to that final opinion from the initial personal information of Mr. Rousseau belongs to the doctor.

Breach of PIPEDA is not a Breach of Something Else


It is important to observe that the entity that has jurisdiction over PIPEDA is the Privacy Commissioner.  It is only after a report by the Privacy Commissioner finding a breach of the Act that an affected party can seek enforcement of the Act before the Federal Court of Canada.  Therefore, a threat to complain to a regulatory body such as a provincial professional college is somewhat misleading because such entities do not have the jurisdiction or the expertise to determine whether there has been a breach of the privacy regime.  For example, a PIPEDA request citing the Ontario College of Physicians and Surgeons’ (CPSO) bulletin on Third Party Reports might find the following advice:
Physicians must comply with any statutory obligations they may have to provide access to reports, documents or notes. This includes but is not limited to applicable obligations under Ontario and Canadian privacy legislation.
Such advice is helpful to doctors, but there is no legislation, regulation or code of conduct bringing physician PIPEDA compliance (i.e. record-keeping outside clinical practice) within the CPSO’s regulatory or disciplinary power.  The CPSO also does not have jurisdiction over private medical assessment companies.
 

Threatening a Suit for Damages


Under s. 16(c) of PIPEDA, an individual can seek an order from the Federal Court of Canada for an award of damages, including damages for humiliation.  However, there is no direct right to sue.  Under s. 14, a plaintiff can only sue after a Privacy Commissioner report rules in the individual’s favour that an organization has breached his or her rights under PIPEDA.  Thereafter, the report is not binding on the court, and the court is at liberty to disagree that there was ever a breach.

Even where the court agrees with the Commissioner that there was a breach, the typical order is to require the organization to comply with disposition recommended by the Commissioner.  This is no small matter, as intentional disobedience with the court order can lead to a finding of contempt of court.

Damages, on the other hand, are not easy to obtain.  The leading case on the legal threshold for awarding damages is Randall v. Nubodys Fitness Centres.  Consistent with the legislative purpose of protecting privacy in digital commerce, the court held that damages should only be awarded “in the most egregious situations,” such as videotaping in private quarters and phone tapping.  A bona fide mistake in the scope of a document disclosure cannot, based on this principle, give rise to automatic liability for damages.  The most recent decision as of time of writing, a 2017 decision in A.T. v. Globe24h, awarded $5,000  (a typical award) in damages against a company that published the complainant’s private information online.  Having regard to the case law, a custodian of records’ delay or refusal to provide access to data generated in an insurance claim or law suit would be difficult to place in this category of complaint.

A PIPEDA request containing a threat of damages would likely be misleading, if one followed the reasoning in Natale and in Salyzyn’s paper.  Given that a party can sue for damages only after the Commissioner’s finding of a breach, there is no basis for threatening a suit in a simple request for disclosure or access.

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HEARD IT THROUGH THE GRAPEVINE: POTENTIAL EXPOSURE FOR “MINOR” PRIVACY BREACHES


By Trevor S. Fisher
Lerners LLP

The decision in Hailey v. McCann is the latest example of the continued development of torts related to breaches of privacy by Ontario Courts.  It is a reminder that potential liability for privacy breaches is not limited to the large-scale hacks, such as Ashley Madison or Casino Rama.  This Small Claims Court decision could also be a sign of potential exposure for businesses and organizations through claims of vicarious liability or negligence.

The plaintiff voluntarily admitted herself to a mental health crisis facility in order to seek help in dealing with some recent life changes.  The defendant was an intake worker at the facility and also the estranged half-sister of the plaintiff.  They had only seen each other twice in the past 15 years.  The plaintiff was unaware that the defendant worked at the facility. 

The crisis facility, which was not named as a defendant, had a privacy policy in place.  When she was hired, the defendant signed a confidentiality agreement confirming that she would abide by the privacy policy.  At trial, she denied being familiar with the policy or receiving any training on it. 

The policy was also reviewed with the plaintiff at the time of her admission and she consented to the release of personal health information to only two individuals: her boyfriend and a support worker.  The plaintiff chose not to tell others that she had sought help, including her adult children, other family and friends.

When the defendant arrived for a shift during the admission, she discovered her half-sister’s name on the resident list.  She examined the plaintiff’s file to confirm her identity and then spoke to her daughter (a nurse) and a co-worker for advice about how to handle the situation.  The defendant decided to avoid the plaintiff during her shift.

After the completion of her shift, the defendant told her husband and her brother about the plaintiff’s attendance at the facility.   She claimed that it was done out of family concern but the brother testified that she was “amused” about the situation. 

A week after her discharge, the plaintiff was sitting on her front porch when she was confronted by the brother’s former spouse about her stay at the facility.  The plaintiff became very upset and complained to the facility and the privacy commissioner.  After initially denying responsibility, the facility acknowledged that there was a contravention of its privacy policy and apologized to the plaintiff.  The defendant never apologized.

In the opinion of her family doctor, the plaintiff has become more stressed, anxious and depressed since the disclosure.  Her boyfriend also reported that she has been more fragile and reclusive.  She has also been reluctant to seek further care from other facilities for fear of a further disclosure.

The Court began with a review of the recent developments in tort law regarding two new causes of action where there is an invasion of privacy.  The first is intrusion upon seclusion and was established by the Ontario Court of Appeal in Jones v. Tsige, 2012 ONCA 32.  This decision, which has been the subject of much commentary and debate, represented a bold step by the courts into the privacy realm, an area previously occupied almost exclusively by governmental privacy agencies.  This cause of action is not engaged in Hailey.

The second cause of action is the public disclosure of private facts and was outlined in the recent decision of Jane Doe 464533 v ND, 2016 ONSC 541.  It involves more than a mere invasion of privacy but also publication to others.  The case in Hailey involved an application of this more recent tort.

The first element of the tort is established where a defendant gives publicity to a matter concerning the private life of a plaintiff.  There can be little debate as to whether the admission was a private matter given that it constitutes personal health information, which was to be protected by both legislation and the confidentiality agreement/privacy policy.  More notably, in telling her family members about the plaintiff’s admission, the Court found that the defendant publicized this personal health information.  Mass publication on the internet or media is not required and it can include the simple act of telling someone who is not entitled to know.  The extent and manner of publication goes to the issue of damages. 

Second, the publication must be highly offensive to a reasonable person.  In analyzing this element, the Court found that it must be considered from an objective and subjective standpoint.  In other words, is the publication highly offensive to a reasonable person in the plaintiff’s situation?  In the circumstances of this case, the Court considered the reasonable person to be someone who has suffered from depression and has been admitted to a crisis facility while taking steps to ensure that this was a secret.  In this context, the disclosure to one’s family can be seen as far more offensive than disclosure to total strangers.

Finally, the information must not be a legitimate concern to the public.  In considering this requirement, the Court conducts an objective determination of the explanations offered by the defendant.   The defendant asserted that she needed advice from her daughter, comfort from her husband and wanted her brother to give support to the plaintiff.  The Court rejected all three explanations.

The Court also seems to read in an additional element of malice as a requirement of the tort.  The source of this additional requirement is not all together clear.  It appears to be a factor which may impact the amount of damages as opposed to liability.  It is clear that the lack of an apology from the defendant was quite bothersome to the Court.

As with the tort of intrusion upon seclusion, it must be noted that proof of actual harm, such a pecuniary loss, is not required.  The Courts have held that non-pecuniary damages for humiliation are contemplated although acknowledged to be modest.  However, in Hailey, the Court found that there was actual emotional harm and relied on the uncontested evidence of the family doctor.  It rejected the defendant’s argument that the plaintiff had an extreme or unusual reaction as this was a case of “take your victim as you find them”.  Further, the defendant was aware of the plaintiff’s fragile mental health.  The Court awarded $7,500 in general damages.

There was also an award of punitive damages ($1,500) as a result of the reckless disregard and malice shown by the defendant.   The Court cited the lack of an apology and the extremely high degree of vulnerability of the plaintiff in support of this award.

Aside from the continued expansion of tort law into the privacy realm, this decision is also notable for the potential exposure of the crisis facility.  It is certainly conceivable that it could have faced a claim of vicariously liability for the actions of its employee or negligence for failing to ensure the proper training of its employees or implementation of its policy.

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SAADATI V MOORHEAD: IS THERE A SILVER LINING IN THE SUPREME COURT’S FINDINGS?


By Alison Hopkins and Katelyn Rattray
Race & Company LLP 
 
On June 2, 2017, the Supreme Court of Canada released its decision in Saadati v Moorhead, 2017 SCC 28 (on appeal from the British Columbia Court of Appeal). Writing for a unanimous Court, Mr. Justice Brown produced a phrase that defence counsel around the country may be loath to hear: “[a] finding of legally compensable mental injury need not rest, in whole or in part, on the claimant proving a recognized psychiatric injury.”

The plaintiff, Mohsen Saadati, was involved in five motor vehicle accidents spanning the years 2003 to 2009. He brought an action for injuries sustained in the second accident, which occurred on July 5, 2005. In his Statement of Claim, the plaintiff alleged to have suffered a traumatic brain injury, a number of physical injuries and “such further and other injuries as may become apparent through medical reports and examinations, details of which shall be provided as they become known”.

Unfortunately, the plaintiff was deemed mentally incompetent in 2010 – after the Statement of Claim had been filed, but before the trial began. Due to his incapacity, the plaintiff’s case relied heavily on evidence from family and friends, many of whom were not present in the plaintiff’s everyday life. Expert evidence was adduced by the plaintiff from a treating psychiatrist on the issue of the alleged brain injury.

In closing, both counsel focused submissions on the alleged physical injuries and brain injury claim. Little was submitted to the Court on the issue of any mental injury. The trial judge reserved judgment.

Though the plaintiff’s Statement of Claim did not allege a psychological or mental injury, no medical evidence was led to support a diagnosis of a psychological condition and counsel did not make specific submissions on the topic, the trial judge found that the plaintiff had suffered a psychological injury as a result of the second accident and awarded $100,000 in non-pecuniary damages. The trial judge relied on the statements of family and friends who described him as, among others, a “changed man” following the second accident.

The British Columbia Court of Appeal overturned the decision of the trial judge, ruling that in order for “psychological disturbance” (which is compensable) to be distinguished from “psychological upset” (which is not compensable), a court must have the assistance of expert medical evidence in order to determine if a plaintiff suffers from a recognized medical condition. In obiter, Mr. Justice Frankel noted a concern that the trial judge decided the case on a basis that was “neither pleaded nor argued by Mr. Saadati”. Further, there was no medical evidence before the court sufficient to establish the existence of a recognized psychiatric illness and “absent expert medical opinion evidence, a judge is not qualified to say what is, or is not, an illness”.

In the Supreme Court of Canada decision, Mr. Justice Brown reiterated that the test for compensation in tort requires the plaintiff to prove: (1) that the defendant owed the plaintiff a duty of care; (2) that the defendant breached that duty; (3) that the plaintiff sustained damage; and (4) that the damage sustained by the plaintiff was caused by the defendant’s breach. He went on to state that the test remains the same whether the alleged damage is physical or mental.

Turning to the requirement (or, as it now appears, lack thereof) of a recognized psychiatric illness, Mr. Justice Brown stated that the requirement that a plaintiff prove that they are suffering from a recognized psychiatric illness allows psychiatrists to define the bounds of what a plaintiff may or may not recover and is “inherently suspect as a matter of legal methodology.” He notes that triers of fact are required to consider symptoms and effects, rather than diagnoses. Or, “put simply, there is no necessary relationship between reasonably foreseeable mental injury and a diagnostic classification scheme” (Saadati at para 31).

Referencing Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Mr. Justice Brown confirmed that “not all mental disturbances will amount to true “damage” qualifying as mental injury, which is “serious and prolonged” and rises above the ordinary emotional disturbances that will occasionally afflict any member of civil society without violating his or her right to be free of negligently caused mental injury” (Saadati at para. 19). He went on to acknowledge concerns about ‘subjective’ symptoms, but confirmed that these are to be dealt with by the trier of fact as a question of credibility, rather than a question of medical diagnosis. “Ultimately, the claimant’s task in establishing mental injury is to show the requisite degree of disturbance (although not…to show its classification as a recognized psychiatric illness).” (Saadati at para. 37).

For the defence bar, this case is a reminder of the importance and key role that lay witnesses, including the plaintiff, may play in the ultimate decision of the court. As Mr. Justice Brown states in Saadati, “a trier of fact adjudicating a claim of mental injury is not concerned with diagnosis, but with symptoms and their effects…the trier of fact’s inquiry should be directed to the level of harm that the claimant’s particular symptoms represent, not to whether a label could be attached to them” (Saadati at para. 31). Although expert medical evidence may assist the court in understanding the possible symptoms or effects of a diagnosis, whether physical or mental, the prognosis and possible treatment of an alleged injury, the question that should be at the forefront for the trier of fact when assessing damages should be function.

This emphasis on function demonstrates the importance of the early use investigative tools including surveillance of the plaintiff and interviewing witnesses or where necessary, the pre-trial examination of witnesses. It also provides reason for defendants to require independent medical examinations in both physical and mental medical disciplines in order to counter the plaintiff’s own potential evidence.

In speaking to the sufficiency of the pleadings in Saadati, Mr. Justice Brown references the inclusion of “such further and other injuries as may become apparent…” and allegations of pain and suffering and loss of enjoyment of life, and finds that these, combined with the references to ‘psychological reaction’ and ‘emotional reaction’ in the plaintiff’s oral and written closing submissions were ample notice to the defendants of the case that had to be answered.

In defending a claim, the use of boilerplate pleadings may open a new path for challenging limitations on disclosure of records deemed to be “irrelevant” by plaintiff’s counsel on the basis that the general catch-all and the claim for “loss of enjoyment of life” must be read to include any number of potential injuries or damages other than those specifically pleaded. Further, that the defendant must have access to all documents in order to prevent potential ambush of a new type of injury claim at trial.

As trial approaches, it will be prudent to ensure that a demand for particulars is served demanding that the plaintiff enumerate those “further and other injuries” that may have become apparent since the filing of the pleadings. If particulars do not include an alleged mental injury, is the defendant in the clear from having to defend against such claim? Only time will tell.

The Saadati decision serves, in part, as a reprimand on civil society and the legal field for treating mental health any differently from physical health. It is a reminder of the basic principles of tort law and the legal test therein that a plaintiff must meet to recover damages (whether physical or mental). The trier of fact is to look to function - and not medical diagnoses - when assessing whether a plaintiff has sustained damages. Implicit in all this is the trier of fact’s obligation to not forget the fourth step of analysis - causation (and remoteness).

Subsequent judgments will give us the clarification we need to understand the true impact of Saadati. However, the judgment itself - for better or for worse - provides some much-needed clarity on the standard required to prove a psychological injury. Perhaps there may be a silver lining in the fallout of this decision for defence counsel in defending claims - justification for wider disclosure, access to lay witnesses, and the broadened use of mental health experts.

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AN OWNER MAY LEND A VEHICLE WITH A VALID PROHIBITION AGAINST LENDING IT TO A THIRD PARTY


By Brian A. Vail, QC and Scott Matheson
Field LLP 
 
If you loan your vehicle to someone, can you impose a condition that they not lend it on to an unknown third party? In the decade since Mugford v. Weber, the Alberta law has been that owners cannot put conditions on their consent to others’ possessing their vehicles that bind injured third parties. However, in its ground-breaking decision in Garrioch v. Sonex Construction Ltd., the Alberta Court of Appeal recognized an exception – an owner can validly prohibit the vehicle from being handed on to a third party.

Sonex Construction entrusted its truck to its employee Garrioch. Sonex policy designated drivers for each vehicle and prohibited use personal use of company vehicles but the trial judge held that these policies were merely “paper” policies and not enforced.  Garrioch felt he was too drunk to drive so he allowed Tessman to drive. Tessman got into an accident and Garrioch sued for his injuries.
 

At Trial


The trial judge found that Tessman was driving with Sonex’s implied consent and was vicariously liable pursuant to the Traffic Safety Act, s. 187.  She found that Garrioch had consented to Tessman acquiring the truck and that Tessman reasonably believed that he had permission to possess the truck.  On the basis of Mugford she found that “[w]hen a vehicle owner trusts someone with the complete possession of the vehicle and the permission to drive, the owner no longer exercises control over the vehicle” such that a condition that the vehicle not be given to anyone else is not valid as against injured third parties. She also found Sonex liable for negligent entrustment of the truck to Garrioch.
 

In The Alberta Court Of Appeal


The Majority held “the only reasonable inference from the facts is that Sonex did not give Garrioch permission to pass on possession to other persons, at least those who were not employees”.  The Majority summarized several principles:
  1. “The only issue is as to whether or not the owner expressly or implicitly consented to the third party having possession of the vehicle”. 
  2. “Implied consent is a question of fact, requiring that an inference be drawn from all of the circumstances, including such things as the knowledge or expectation of the owner about subsequent transfers of possession, the relationship between the parties, any past pattern of conduct, any express prohibition on transferring possession, and any other relevant fact”.
  3. “Consent to possession cannot be granted on conditions, such as conditions respecting the manner of driving or the occasions on which driving is consented to: Mugford. Such conditions cannot be asserted against an injured plaintiff.” The Court was unanimous in concluding that “conditional consent is impermissible” and that an owner’s consent “is an ‘on or of’ switch: either it exists or it does not.” 
  4. However, there is an exception:“[a]n owner can consent to possession of the vehicle on the condition that possession will not be passed on to third parties or classes of third parties. The one condition that the statute specifically allows the owner to place on his vicarious liability is ‘consent’. The owner is allowed to consent to the second party having possession of the vehicle, and limit that consent to the second party. If the third party wants consent to possess the vehicle, he has to get it from the owner. Just because the owner consents to one driver having possession of his vehicle does not mean that the owner consents to the whole world having possession.”
The consent issue is easy to resolve where the owner expressly allows or prohibits the second party to transfer the vehicle to a third party. Where the owner says nothing about passing on possession to third parties, consent to do so may be implied from the context, the onus being on the plaintiff to prove it.  “[T]he subjective belief of the third party driver is not directly relevant, except to the extent that it reflects the view that the informed, objective, reasonable person might have of the circumstances, as that latter view might demonstrate the existence of implied consent in fact . . .  [but] [t]he driver cannot turn his subjective perceptions into the owner’s actual state of mind.” Also, “the question cannot be subjectively resolved by the owner with hindsight, and a negative answer to a hypothetical question put to the owner at trial of whether consent would have been granted at the time of the accident is not conclusive”. In dissent, Mr. Justice Berger did not reject the exception recognized by the Majority, but was of the view that the evidence did not establish that Sonex had prohibited Garrioch from lending the vehicle to another and that Tessman had Sonex’s implied consent in the circumstances.

The Majority also held that the plaintiff failed to establish negligent entrustment by Sonex.  The evidence did not establish that Sonex knew or ought to have known that Garrioch would use poor judgment in selecting alternate drivers.  Importantly, the Majority held that “[w]hen the statute does not impose vicarious liability (because there is no consent for the possession by the driver) care should be taken in imposing liability through an alternative theory of ‘negligent entrustment’” because “this theory has the potential of finessing the public policy that liability only arises (and the owner’s insurance coverage is only engaged) if the third party driver has consent to operate the vehicle”.

From a practical perspective, we expect that this will be a major case for the defence. In claims where the owner (be it an employer, rental company or otherwise) has provided consent to a person who then hands the keys to another, Garrioch may shield the owner’s insurer from liability.

Campisi v. Ontario, 2017 ONSC 2884 

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CONSTITUTIONAL CHALLENGE TO SS. 267.5(1) AND 280 OF THE INSURANCE ACT


By Lisa C. Pool
Sullivan Festeryga LLP 
 
Insurance companies, personal injury lawyers and injured persons were all awaiting the decision on this application as it could have potentially changed the course of disputes with respect to accident benefits. The applicant, Joseph Campisi, challenged the constitutionality of two automobile accident provisions in the Insurance Act.

The impugned provisions:
  • Section 267.5(1) – This section caps the pre-trial recovery of lost income. After September 1, 2010, the cap is 70% of gross income and from 1996 until that time, the cap was 80% of net income.
  • Section 280 and LAT – In 2014, the provincial legislature amended s. 280 of the Insurance Act so that effective April 1, 2016 all SABS disputes would be resolved solely by Licence Appeal Tribunal ("LAT"), subject only to appeals on questions of law or applications for judicial review. Prior to this change, any dispute not resolved by mediation could be decided by arbitration before the Financial Services Commission of Ontario ("FSCO"), or by a proceeding in the courts.
Although this application was decided on the basis that the applicant did not have standing, Justice Belobaba also considered the substantive issue. Here are the bullet point findings, followed by a more detailed summary of the case:
  • The applicant lacked private interest standing as he was not an injured person.
  • The applicant did not meet the prerequisites for public interest standing.
  • The pre-trial limitation on recovery of income loss applies to all injured persons. The type or category of accident victim is not on enumerated or analogous ground protected by section 15 (1) of the Charter.
  • The distinction between those who are able to enforce legal rights in the court system and those who are part of an administrative scheme is not a distinction based on disability. The principles of equality underlying s. 15 are not offended by that distinction.
  • Tort claims are proprietary in nature and the right to sue for damages for personal injuries is not protected by s. 7.
  • Section 7 does not extend to property interest and an injured person's right to security of the person is not violated by a law that restricts his or her ability to access the courts to recover damages for personal injury claims.
  • The type of dispute that the LAT is deciding did not exist in 1867. And because "new powers or jurisdictions are not part of the core of jurisdiction protected by a section 96 of the Constitution Act, 1967" this finding is dispositive of the matter.
  • The SABS dispute resolution jurisdiction that has been granted to the LAT is necessarily incidental to the stated goal of injured persons with speedy no-fault benefits coupled with a quick and efficient system of dispute adjudication. Also, in a larger context, the LAT’s jurisdiction is necessarily incidental to the overall system of automobile accident insurance regulation.


No Standing


With respect to standing to bring the constitutional challenge, Justice Belobaba first held that Mr. Campisi did not establish a private interest standing to bring this application. He had not been injured in an automobile accident. He was not claiming for lost income. Nor was he disputing a SABS benefit before LAT on his own behalf.

Second, he held that Mr. Campisi also lacked public interest standing to bring the application. Public interest standing may be granted in the court’s discretion if the following three prerequisites, in combination, are satisfied:
(i) There is a serious justiciable issue raised;
(ii) The applicant has a real stake or a genuine interest in the issue; and
(iii) In all the circumstances, the proposed application is a reasonable and effective way to bring the issue before the courts.
He held the Mr. Campisi did not satisfy the second prerequisite as he had not demonstrated that he has a real stake or genuine interest in the constitutional validity of the two provisions in question. With respect to the third prerequisite, Justice Belobaba held that there are other reasonable and effective ways to bring these issues before the courts.
 

The Merits


When considering the substance of the application, Justice Belobaba found no breach of ss. 15(1) or 7 of the Charter or s. 96 of the Constitution Act, 1867.
 

No breach of section 15(1) of the Charter

Section 15(1) of the Charter provides for a quality before and under the law "without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability."

The starting point for any analysis is to consider whether the impugned law creates a distinction on the basis of a prohibited or analogous ground. Neither subsection 267.5(1) nor section 280 discriminates between persons based on their physical disability as argued by the applicant. As previously stated by the Divisional Court in Hernandez v Palmer, "the type or category of accident victim is not an enumerated or analogous ground protected by s. 15(1) of the Charter."

The pre-trial limitation on recovery of income loss applies whether the accident victim is physically disabled or not and regardless of the severity of any injury.

The requirement that an injured person with an accident benefits dispute proceeds before the LAT and cannot go to court is not a distinction on the basis of disability. It was previously held by the Supreme Court of Canada in Nova Scotia (Worker's Compensation Board) v. Martin that the distinction between those were able to enforce legal rights in the court system and those who are part of an administrative scheme is not a distinction based on disability.

In 2005, the Ontario Court of Appeal dealt directly with s. 15(1) of the Charter and the SABS in Daley v. Economical Mutual Insurance Company. In that decision, the Court noted:
The no fault benefit provisions in the [SABS] could not work if distinctions were not made among the various persons whose disabilities entitled them to some form of no fault benefit. The principle of equality underlying s. 15 is not offended whenever a distinction is drawn by legislation. Equality is put at risk only where the distinction discriminates against an identifiable group on the basis of the grounds identified in s. 15 …

No breach of section 7 of the Charter

Section 15(1) of the Charter provides that "Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice."

Justice Belobaba indicated that the applicant filed little to no evidence about any deprivation of life, liberty or security of the person. Had that been provided, the s. 7 challenge to the impugned provisions would still fail as "the case law is clear that neither statutory limitation tort damages by the elimination of a court option deprives an accident victim of his or her right to life, liberty or security of the person."

In Whitbread v. Walley, the British Columbia Court of Appeal concluded the tort claims are not proprietary in nature and the right to sue for damages for personal injury is not protected under s. 7 of the Charter. This was affirmed by the Supreme Court of Canada.

With respect to the elimination of the court option in s. 280, Justice Belobaba stated that s. 7 does not extend to property interests and an injured person's right to security of the person is not violated by a law that restricts his or her ability to access the courts to recover damages for personal injury claims. The Ontario Court of Appeal in Rogers v Faught stated that s. 7 of the Charter does not embrace the right to bring an action for the recovery of damages in personal injury. A civil action is economic and proprietary in nature and as such is outside the range of the interests protected by s. 7.
 

No violation of section 96 of the Constitution Act, 1867

In Residential Tenancies, the Supreme Court set out a three-part test for determining when s. 96 of the Constitution Act, 1867 allows jurisdiction to be conferred on an administrative tribunal as follows:
(i) Does the power or jurisdiction “broadly conform” to a power or jurisdiction exclusively exercised by a superior, district or county court at the time of Confederation?
(ii) If so, is it a judicial power? and
(iii) If so, is the power either subsidiary or ancillary to a predominantly administrative function or necessarily incidental to such a function?
In this matter, only the first and third steps are required to be considered as the LAT obviously exercises a judicial power in determining the dispute.

With respect to the first step, Justice Belobaba held the dispute that is being resolved is not simply a contractual dispute that ordinarily fell within the jurisdiction of superior courts at the time of Confederation. Modern-day insurance policies are not ordinary, freely negotiated contracts. They are statutory contracts. Further, the type of dispute is a novel power or jurisdiction that did not exist in 1867 because neither automobiles nor automobile insurance existed in 1867.

With respect to the third step, Justice Belobaba held that the resolution of SABS disputes by the LAT is necessarily incidental to the broad policy goals the led to the creation of no-fault automobile insurance in the first place. He describes the policy goal as "providing automobile accident victims with speedy no-fault benefits coupled with a quick and efficient system of dispute adjudication."
 

Concluding Thoughts


The dismissal of this application was the anticipated outcome based on the questions many had with respect to the standing of the applicant to bring this application. At the time of writing, it is unknown whether the applicant will be appealing this decision.

However, as the findings on the merits of the challenge are obiter dicta, it remains to be seen what would happen if a constitutional challenge is made by a person injured as a result of an automobile accident. Most likely, the outcome at the first instance would be the same.

For now, we continue with the LAT....

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ATTENDANT CARE BENEFITS - Does the February 01, 2014 amendment to the "non-professional" attendant care provider provision apply to past claims or just future claims for attendant care benefits?


By Rhonda Macedo, CPA, CMA, CFF
BDO Canada LLP 
 
MVAC Fund v. Barnes (FSCO Appeal P16-00087)

On February 1, 2014, subsection 19(3) of the 2010 Schedule was amended, limiting the amount of the attendant care benefit payable by the Insurer to the actual amount of economic loss sustained by a non-professional care provider. 
 

Case Facts


Ms. Barnes sustained a catastrophic impairment as a result of a motor vehicle accident on January 3, 2012 and received attendant care benefits for services provided by Ms. McColeman, her mother. Ms. McColeman took a leave from her work in March 1, 2012 and these benefits continued beyond February 1, 2014.

Accountants are routinely engaged to quantify economic losses for attendant care benefit purposes, and there was no dispute in this case that Ms. McColeman had sustained an economic loss in providing attendant care to Ms. Barnes and that attendant care services were incurred throughout the period that she provided attendant care.  The issue on appeal was whether the amendment of February 1, 2014 applies to Ms. Barnes whose accident occurred before the amendment.

The MVAC Fund appealed the underlying arbitration decision of November 22, 2016, wherein the arbitrator held that Ms. Barnes’ entitlement to attendant care expenses for services provided after January 31, 2014 is not limited to the economic loss sustained by Ms. McColeman, who provided the attendant care services. In this decision, the arbitrator found that Ms. Barnes had acquired a vested right to determination of her entitlement, without the February 1, 2014 amendment.
 

Analysis


However, Delegate Rogers found that there is no vested right in an unchanged version of the Schedule and he relied on subsection 268(1) of the Insurance Act, which states: “Every contract evidenced by a motor vehicle liability policy, including every such contract in force when the Statutory Accident Benefits Schedule is made or amended, shall be deemed to provide for the statutory accident benefits set out in the Schedule and any amendments to the Schedule, subject to the terms, conditions, provisions, exclusions and limits set out in that Schedule.

Delegate Rogers noted that this section establishes three principles. First, the terms of the agreement for a motor vehicle policy are set by the legislation, not as a private agreement between an insurer and its insured. Second, it makes the Schedule a part of every policy and, third, it makes all amendments to the Schedule a part of every policy.

Delegate Rogers also noted that Ms. Barnes did not have a vested right in attendant care benefits simply because she was injured in a motor vehicle accident before that date. Instead, Ms. Barnes’ right to attendant care benefits was contingent on her ongoing need, the provision of services and that the benefit is incurred.  Therefore, in Ms. Barnes’ circumstances, the application of the amendment has immediate application and changes “the future legal effect of an on-going situation.”

Delegate Rogers held that the arbitrator erred in relying in the FSCO appeal decision of Federico v. State Farm (FSCO Appeal Decision, P12-00022), which deals with the application of amendments to interest provisions in the 2010 Schedule. In this regard, Delegate Rogers found that the Court upheld the decision on the interpretation of the legislation, but made no mention of the issue of vested rights. Similarly, Delegate Rogers rejected the Superior Court decision in Davis v. Wawanesa (2015 ONSC 6624), which also relied on Federico v. State Farm. In that case, it was determined that ongoing entitlement to attendant care benefits for services provided after January 31, 2014 was not limited to the economic loss sustained by the attendant care provider. The arbitrator found that the amendment would affect a substantive and vested right and therefore did not apply to the claimant’s accident benefit claim. 

However, Delegate Rogers found that in Federico v. State Farm, the Delegate did not consider the effect of subsection 268(1) of the Insurance Act, nor did he consider the earlier appeal decision in Gan Canada v. Lehman (FSCO P97-00064), which was identical to the issue in this case. This is important to note as Lehman rejects the ideas that rights to accident benefits arise from a private contractual agreement and vest at the time of the accident.

Delegate Rogers determined: “I find it illogical to apply the concept of vested contractual rights to a relationship in which the parties have no direct input in the terms of their relationship, and the terms may be amended from time to time without their input or consent. The Federico approach is inconsistent with s. 268(1) and incompatible with the history of frequent amendments to the SABS, both incremental and wholesale.”  Accordingly, Delegate Rogers found that Ms. Barnes had no vested right to the determination of her entitlement to attendant care benefits under the 2010 Schedule as it existed at the time of her accident and, therefore, her entitlement to attendant care benefits for services provided by Ms. McColeman after the amendment, is limited to a maximum of the economic loss she sustained in providing the services.
 

Conclusion


Accordingly, contrary to the outcome in Davis v. Wawanesa, attendant care benefits payable beyond February 1, 2014 in relation to a pre-February 1, 2014 motor vehicle accident are limited to the amount of the economic loss sustained by a non-professional attendant care provider. This case could prove to have implications for accident benefits claims vis-à-vis the June 1, 2016 amendment to subsection 19(3) of the 2010 Schedule, which limits the amount of the attendant care benefit payable by the Insurer to the lower of the amount of the actual expenses incurred by a professional care provider and the Form 1 amount.

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SUMMARY JUDGMENT AND THE RIGHT TO A JURY TRIAL


By Jessica L. Kuredjian
Reisler Franklin LLP 
 
If you are considering a summary judgment motion and a jury notice has been delivered by any party, proceed with caution.
 
In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada outlined the Court’s approach to summary judgment motions. First, it must determine whether there is a genuine issue for trial based on only the evidence provided; however, if it appears that there is a genuine issue requiring trial, the Court is to determine whether a trial can be avoided by exercising the fact-finding powers in Rules 20.04(2.1) and (2.2). The latter powers are often referred to as the “toolbox” and the decision to open the toolbox is at the discretion of the Court. A review of recent case law highlights that the present of a jury notice can be a strong determinative factor in the Court’s decision to not open the toolbox and deny summary judgment.
 
In the case of Mitusev v. General Motors, 2014 ONSC 2342, Justice Edwards set a high bar to opening the toolbox in an action with a jury notice.  Justice Edwards stressed that the service of a jury notice by a party signalled the exercise of a fundamental and substantive right that should only be infringed upon by way of summary judgment “in the face of relevant admissible and compelling evidence that leaves the motion judge confident that he or she has the necessary legal facts that will allow him or her to apply the relevant legal principles so as to resolve the dispute”. Justice Edwards concluded that if a party is denied their right to a jury trial, the motion judge needed to have evidence strong enough to leave them confident that there is truly no genuine issue requiring trial.
 
In the more recent case of Yusuf v. Cooley, 2014 ONSC 6501, one of the defendants sought summary judgment where a jury notice had been delivered. It is important to note that this case was fraught with serious conflicting evidence of how an accident occurred. In denying summary judgment, Justice Lederer noted that the interests of justice dictated that the fact finding powers in the toolbox should not be used to grant summary judgment to one defendant, especially where a jury notice was delivered. Justice Lederer did note, however, that if there is no genuine issue requiring trial (i.e. no liability) then a jury notice is not a factor because in effect, there would be no case for the jury either.
 
Similarly, in the case of McDonald v. John/Jane Doe, 2015 ONSC 2607, Justice Dunphy found that the existence of a Jury Notice is not a bar to proceeding with a summary judgment motion requiring Rule 20.04(2.1) but should be considered in deciding whether the interest of justice requires that the toolbox only be used at trial. Justice Dunphy commented that the court might conceivably be able to resolve the liability issues employing the toolbox to draw inferences or make findings of credibility; however, he doubted whether the court should do so when it would deprive a party of their substantive right to a jury trial. Justice Dunphy also found that the plaintiff’s story, if heard by a jury, may be compelling and concluded that it was incumbent upon the court to give consideration to a jury notice and other relevant factors when considering whether the interest of justice requires the toolbox to remain unopened.
 
In the recent case of Wardak v. Froom, 2017 ONSC 1166, Justice Matheson again confirmed that the delivery of a jury notice did not preclude summary judgment but must be considered in deciding whether to use the fact-finding powers afforded by Rule 20. Notably, Justice Matheson found that it was irrelevant that it was the moving party defendants, and not the plaintiffs, who had delivered the jury notice.
 
In conclusion, if you suspect that your new file may be one that is fit for summary judgment but may require the Court to open the toolbox, consider holding off on that jury notice unless you’re certain your party is not liable and confident you have the evidence to prove it.

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CDL FOUNDATION $5000 ESSAY PRIZE WINNER

ALLOCATING LOSS AT THE INTERSECTION OF INSURANCE AND TORTS: READING THE PRINCIPLED DEVELOPMENTS IN THE LAW OF SUBROGATION

By Nick Hooper
Schulich School of Law

Introduction


The legal areas of insurance and tort often intersect without losing their distinctive features. There is, of course, a necessary degree of overlap between these regulatory responses to loss; each deals, after all, with wide-ranging harms in an effort to effect predictable and equitable compensation. Although there is no shortage of literature on discrete points of interaction between insurance and torts, relatively little is written about the fundamental tension that attends their concurrent use. For all their similarities, these areas of the law respond to loss in markedly incongruous ways; the cost-spreading impulse of indemnity is diametrically opposed to holding a tortfeasor to full and exclusive account for her wrongdoing. Interactions between these areas require, then, either compromise, supremacy, or incoherence.

While such an inquiry may present as an academic exercise, there is significant practical value in understanding how the allocable purposes of torts and insurance diverge. Specifically, the law of subrogation, which stands as perhaps the clearest example of interplay between torts and insurance, has recently undergone a major shift. The jurisprudence that has progressively qualified subrogation rights is often vague about the rationale for this change; given insurance law’s contractual nature, disputes are generally limited to the individual terms at issue, making predictable development far less likely. However, when we understand that subrogation is mediating the tension between communal loss spreading and fault-based compensation, the ever-shifting landscape of subrogation becomes increasingly predictable. To this end, my paper will outline the basic features of this area of the law while underscoring points of tension regarding loss allocation, culminating in a close reading of the landmark case of Somersall v Friedman. Thereafter, I will examine the judicial treatment of subrogation in the aftermath of this Supreme Court decision, which can be productively organized around the principles of insurance law. This discussion concludes by elucidating the principles that will continue to inform the multifaceted interaction between insurance coverage and tort claims.
 

I. The Tension of Allocation in Insurance and Torts


The justificatory basis for any area of the law is generally subject to considerable debate, but few would argue against the proposition that both tort and insurance law evince a fundamental preoccupation with allocating loss. Where conduct is circumscribed as tortious, there is a general sociolegal preference for the tortfeasor to bear the consequences of her transgression—at least to the extent possible through monetary compensation.[1] Similarly, on a macrocosmic level, indemnity insurance is designed to equalize costs associated with inevitable, but highly localized, damage.[2] As one critic suggests, we can usefully imagine a community of one thousand houses where, as a matter of statistical probability, one dwelling will burn down each year.[3] Our regulatory choices are simple: either the unlucky homeowners will be left to their own devices, or each homeowner can insure against this unlikely eventuality. In the latter event, the costs associated with the fire are shared equally as a function of each payer’s home value and relative degree of risk. It is, at the level of theory, a democratic impulse.[4]

In reality, these situations are far more complex. The intersection between the insurance companies that administer such schemes and the regulatory framework imposed by the state import countless points of nuance—and they should. Insurable risks are multifarious and rarely caused by a singular event;[5] the nominal reason for a home’s destruction might be the fire, but what about unaddressed building code violations or unplugged smoke detectors? The law has responded by codifying important features of the insurance contract in an effort both to resolve these difficult policy questions and lend predictability to this area of the law.[6] Amidst these regulatory difficulties, the fundamental purpose remains unaltered: “to relieve individuals from the crushing weight of losses that come upon them without their own fault by distributing the burden over the community.”[7]

This aim of indemnity remains possible in the various scenarios that complicate the insurance contract, but a more challenging question arises where tortious liability causes an insured risk to materialize. Broadly speaking, the (contested) utility of tort law lies in the effect of imposing liability on the tortfeasor; when someone causes harm in this legal sense, they are held financially accountable and presumably deterred or, at least, sanctioned.[8] The theoretical challenge, however, arises where the tortious harm was also subject to indemnity from an insurance contract. It is well settled that the aggrieved party has a choice; she can litigate in tort or seek indemnification from her insurance company, but not, of course, both.[9] We are confronted, in other words, with “the problem of cumulation of remedies.”[10]

The most common solution for this interaction of torts and insurance is the law of subrogation. This doctrinal mechanism, taking its name from the Latin for either “substitution” or “surrogate,” allows one party to stand in the place of another, thereby acquiring the rights of the substituted party which are enforceable against a third party.[11] More simply, for the purposes of this discussion, in the foregoing situation where an insured party is indemnified by her insurer for tortious harm, “the insurer may well be entitled to take over the insured’s rights of action, and to insist that the insured lends his [or her] name to proceedings to enforce these for the insurer’s benefit.”[12] In practice, the remedial problem of excess is solved; the insured party is indemnified and the insurer is thereafter free to recover from the tortfeasor. There is, however, a subtle change in the legal allocation of loss. While the tort law raison d'être is well served by bringing an action in the plaintiff’s name, the distributive logic of indemnity insurance is qualified: loss will be shared by the community of participants only where caused by non-tortious means.

This is undoubtedly justifiable from the perspective of the insurer. It might be argued, for instance, that non-tortious harms are exactly those contemplated by the contractual relationship. Similarly, as various treatises note, it is usually straightforward to purchase insurance against the possibility of tortious liability.[13] The tension, however, persists: Insurance law disperses costs across the community while tort law necessarily holds a singular actor[14] wholly liable. Subrogation has long been heralded as a fundamental aspect of insurance law,[15] but it is also a unique point of intersection between indemnity and tort. As such, it provides a particularly instructive means of considering the legal values that animate the concurrent use of these areas of the law.
 

II. Somersall v Friedman: The Radical Shift and the Underlying Rationale


Nearly two decades ago, the Supreme Court significantly diminished the scope of subrogation rights in the case of Somersall v Friedman[16]—a trend that can be understood as the protection of insurance law’s preference for sharing loss. This decision stands as a stark and unexpected qualification of rights owed to an insurer. Notably, in resolving this dispute concerning the terms of an automobile insurance agreement, the Court did not claim to fundamentally alter the law. Whether this was disingenuous or not, Somersall’s impact has been substantial. While it is uncontroversial that the insured “must protect (and not prejudice) the interest of the insurers” as they relate to subrogated claims,[17] the Court modified this edict with a focus on the principles of insurance law.[18] Essentially, despite the insured parties entering a “limits agreement” with the tortfeasor without the consent of the insurer,[19] it was held that their obligation to protect the insurer’s subrogation rights had been fulfilled. Since these rights are acquired exclusively through the insurance contract, the scope of the insured’s obligation to protect the insurer’s claim is highly contextual.[20] The facts of this case provide a useful example, since “only a clear and unambiguous obligation upon the insured to maintain a claim in tort and not waive it in exchange for a payment” could have supported the insurance company’s claim.[21] In other words, the robust image of unadulterated subrogation rights owing to an insurer after indemnifying for tortious conduct no longer accurately reflects the state of the law.
 

(a.) Facts, Law, and Analysis: The Unstated Tension of Somersall

At first glance, such a holding suggests a degree of neutrality. If subrogation rights simply depend upon the language of the insurance agreement, they are neither limited nor expanded; rather, parties are free to enter into bargains that will be enforced on their own terms. While the Somersall decision does, at least implicitly, recognize this freedom to contract regarding the exact nature of the insurer’s subrogation rights, the resultant agreement will be interpreted in the best interests of the insured, pursuant to the doctrine of contra proferentum.[22] The ambiguity here was accordingly resolved in that direction; the ability to enter into “limits agreement” was protected by the silence of the insurance contract.[23] As such, subrogation can be understood as a contractual right that is a priori limited to privilege the freedom of the insured.

This, to be sure, is a radical shift in the law of subrogation. Since its inception, this doctrine has traded the rights of the insured to their insurer in exchange for indemnity.[24] It is difficult to overstate the imbalance at play here: The insurer is paying for damage expressly contemplated by the insurance agreement—ostensibly, they have traded nothing in return for a potentially valid cause of action. The reality is, of course, more complex; there are multifarious costs associated with litigation and enforcement (which must be paid by the insurer), and presumably the right of subrogation figures into the entire context of the contract: an insurer who could not make subrogated claims may very well charge more, offer less coverage, etc.[25] At its core, however, this is a legal mechanism for immunizing the insurer whenever the insured loss arises as the result of tortious conduct. In many cases, this will be a relatively arbitrary distinction. Consider, for instance, the aforementioned fire insurance example. When this year’s house burns to the ground, we expect the insurer to indemnify out of the collection of communal resources—loss has, once more, been borne democratically by those at risk of localized harm. However, where this fire was caused by tortious conduct—faulty wiring, say—the insurer will thereafter recover from a single actor. The communal resources are dispensed, recovered, and finally retained by a single party. In this way, insurance law has great difficulty accommodating the ethos of torts. At the level of resource allocation, when our community decides to share inevitable, calamitous loss through an insurance scheme, there is no meaningful distinction between fire caused by negligence and that caused by bad luck.

This central tension between insurance and tort law helpfully explains the unstated core of Somersall. The majority’s decision to limit the insured’s obligation to protect subrogation rights was met with some academic criticism. This ruling, in one critic’s estimation, fundamentally “misconstrues, underestimates, and undermines subrogation as a fundamental principle of both insurance law theory and practice.”[26] Another suggests that the Court lacked the evidentiary basis for altering the “cost-saving potential of subrogation” in the context of automobile insurance.[27] This argument submits that subrogation, in its most unqualified and expansive sense, is economically efficient because it reduces insurers’ costs, which trickles down to prices of insurance premiums. While it is certainly true that the majority in Somersall did not weigh the economic impact of a limited obligation to protect subrogation rights, this criticism misses the larger point. This doctrine is limited based on the underlying legal principles, an understanding of which elucidates the contemporary trends toward protecting the rights of the insured.
 

(b.) The Valorization of Insurance Law Principles in the Tort Law Context

The Somersall decision embodies a particular reliance on the principles of insurance law.[28] It is important to recall that the Court was ostensibly concerned with the specific subrogation rights at issue in that dispute—not the operation of the doctrine in general. As such, contra proferentum was invoked to resolve competing interpretations of the insurance contract.[29] The holding, then, allows parties to explicitly adopt a robust formulation of the insured’s obligation to protect subrogated rights, but such a stipulation will be interpreted against the insurer wherever ambiguity occurs. The justification for such a rule is obvious. As the Supreme Court famously observed in an earlier case, “one must always be alert to the unequal bargaining power at work in insurance contracts, and interpret such policies accordingly.”[30] Most importantly, at least for the purposes of this discussion, the majority in Somersall alters the operation of subrogated rights as part of the larger question of how torts and insurance should interact. This highly complex inquiry is resolved, in other words, by considering the “interpretive and substantive” principles that justify the scope of the insurance agreement.[31]

According to the Court, the “underlying objectives” of subrogation include achieving full compensation for the insured (that is, “no more and no less than a full indemnity) and imposing liability upon the persons responsible for the harm.[32] While these are presented as compatible aims, there is, as discussed, a degree of tension between these two emblematic statements about insurance and torts, respectively. In other words, these two purposes of subrogation require some further criteria to resolve disputes in a principled fashion. Here, the majority rightly observes that subrogation is hardly necessary to ensure that insured parties are not overcompensated;[33] so-called double recovery is, of course, incompatible with our law of damages, regardless of whether subrogation is involved. Similarly, subrogated rights can be invoked only once the insured party is indemnified—a mechanism for effecting quick restitution for aggrieved parties,[34] but one that often has little bearing on how the scope of subrogation should apply in any given insurance relationship. In short, the majority dispenses with the tropes of justifying subrogated claims and instead engages with how this insurers’ right should be interpreted in light of the contractual relationship between the parties.

This analytical move places the judgment directly into the sphere of textual interpretation and the unequal bargaining power that attends any insurance agreement. The majority submits that “insurance principles of subrogation, though not the principle of interpretation contra proferentem, may be altered by the terms of the contract between the parties.”[35] Beyond the obvious rationale for privileging contra proferentum in this context, the majority’s focus embodies a broader concern with the principled operation of insurance law. This commitment is tested where tortious conduct is involved; in result, the Court holds that this doctrinal intersection requires (a.) careful attention to the terms of the contract and (b.) an appreciation of the insured parties’ rights as a fundamental principle of insurance law. Further, by acknowledging the standardized nature of insurance contracts, the Somersall decision evokes the larger question of the insured’s rights in light of agreements tailored exclusively by elite actors in the insurance industry and associated regulatory bodies.[36]

Returning more explicitly to how this affects our understanding of the insurance/tort interaction, the Somersall holding is important for what is left largely implicit: the law of subrogation disproportionately favours insurance companies over those who purchase their services. Its most obvious function is to circumscribe the forms of loss that must truly be borne by an insurer, and it arises solely from a contract that has generally been drafted solely by those involved in this industry. More specifically, its fundamental tort law impulse—that is, to impose liability exclusively upon the tortfeasor—is entirely collateral to the function of insurance law, which seeks only to compensate, but generally does this via communal resources. Accordingly, the facts of this case, along with the Court’s reaffirmation of the interpretive principles at play, suggest that curtailing the insurers’ subrogation rights is symptomatic of a broader effort to impose organizing principles on the law of insurance—particularly where it must interact with the theoretically incompatible area of torts.
 

III. Post-Somersall: Giving Content to Insurance Principles

Since the shift marked by Somersall in 2002, nearly one hundred decisions have engaged with the Supreme Court’s qualified image of subrogation.[37] Many of these cases have directly considered the (now contextual) question of subrogation rights, but several others demonstrate the broader concerns implicit in Somersall—that the power imbalance in every insurance agreement requires careful adherence to the principles of insurance law. As a result, intersections between tort and insurance law have, at least in this context, become far more dependent on the specific facts at issue. This has created a jurisprudential trend toward systematically interpreting even standard form agreements in an effort to foreground insurance law principles. Left unstated, but critically important for this discussion, is the impact of this result: where insurance principles are supreme, tort principles are subordinated.

Consider, for instance, the recent decision of Porter v Co-operators General Insurance Co.[38] After citing the proposition that the specific terms at issue “should be read in the context of the wording of the entire endorsement and not in isolation,”[39] the Court affirms this “liberal,” contextual treatment of the insurance agreement.[40] On its face, this sentiment seems relatively amorphous, but it helpfully introduces the post-Somersall impulse toward greater reliance on contractual language. The result is well stated in Loree Estate v Canada West Insurance Co, which exemplifies the insistence on interpretive principles in recent cases.[41] After glossing several key elements of Somersall, the Court holds that “certain parallels” exist between the rights of an insured relative to both the tortfeasor and the insurer.[42] In other words, whatever the differences between either source of compensation, the primary concern is expeditious indemnification. This extends beyond the language of the contract and is asserted as a fundamental purpose of insurance law. Once more, the concerns of tort law are, at best, collateral.

The impact of this shift in the law of subrogation has been far-reaching in insurance law generally. As one post-Somersall decision noted, courts will now consider “the wisdom of the policy that will result from the interpretation adopted by the court.”[43] This recent willingness to consider the macrocosmic interests at stake in the insurance relationship has significant implications for our understanding of the insurance/torts interaction. The judicial interpretation of insurance contracts continues to prioritize the interests of the insured in light of their lesser bargaining power, but this recent trend also imports criteria outside the scope of the contract.[44] In effect, courts must construct the agreement in a manner that is broadly congruent with the aforementioned principles of insurance law, including those that relate to loss allocation and efficient indemnification. This, in turn, invites a holistic form of reasoning, which tellingly leaves the tort law concerns at the peripheries.[45] The legacy of Somersall, then, can be understood as the valorization of insurance law principles at the expense of those embodied in the other side of subrogation—the allocable logic of torts. While critics and litigants continue to argue about the appropriate scope of subrogation, the result of this jurisprudential trend culminates in a form of rough fairness. So long as we pay careful attention to the implications of relying on these principles, developments at the intersections of insurance and torts will remain largely predictable.
 

Conclusion


The recent developments in the law of subrogation provide a uniquely instructive case study in how the courts are resolving the theoretical dissonance between insurance and tort law. More specifically, at the level of allocating loss, each legal area has a distinctive function; when the two intersect, one must be qualified or give way completely. Since the Supreme Court’s decision in Somersall, the jurisprudence surrounding subrogation has embodied a pronounced shift toward protecting the principles of insurance law. This has provoked a largely unstated result; that is, despite the clear presence of tort law concerns in virtually every case of subrogated rights, those underlying principles are subordinate to the concerns of indemnity and insurance law more broadly. While recourse to underlying principles may suggest unpredictable development—it is difficult, after all, to give precise content to themes such as “liberal” or “contextual” interpretation—an understanding of the competing interests in the insurance/torts intersection provides a useful framework for anticipating continued change. The landmark decision of Somersall effectively imposed a highly fact-driven regime of interpreting insurance claims, but the foregoing analysis demonstrates that, where tort concerns arise, these will be relegated to the analytical margins. As a clear example of how insurance and tort law interact, the law of subrogation provides an instructive account of how courts weigh the competing preoccupations of each respective legal area.


[1] The classical image is, as John Goldberg puts it, “a tort plaintiff act[ing] as a private attorney general who sues on behalf of and vindicates the public's interest in safety or loss-spreading (“Introduction: Pragmatism & Private Law” (2012) 125:7 Harvard L Rev 1640 at 1659.

[2] For perhaps the most comprehensive account, see: Emeric Fischer & Peter Swisher, Principles of Insurance Law, 2nd ed (New York: Matthew Bender & Co, 1994).

[3] Barbara Billingsley, General Principles of Canadian Insurance Law, 1st ed (Markham: LexisNexis Canada, 2008) at 2-3.

[4] This is seen most clearly in the context of health insurance, particularly through the American literature. See, e.g., Edith Rasell, “Cost Sharing in Health Insurance—A Reexamination” (1995) 332:17 New England J of Medicine 1164 and Everette James, Walid Gellad & Brian Primack, “Implications of New Insurance Coverage for Access to Care, Cost-Sharing, and Reimbursement” (2014) 311:3 JAMA 241.

[5] For a sense of the range of insurable risk, see generally: Peter Moizer & Lisa Hansford-Smith, “UK Auditor Liability: An Insurable Risk?” (1998) 2:3 Intl J of Auditing 197; Michele Schroeder, “Lender Environmental Collateral Protection and Liability: An Insurable Risk into the Next Millennium” (1999) 12:1 Environmental Claims J 45; and Eugene Jericho & Edward Coultas, “Are Lawyers an Insurable Risk” (1977) 63:6 ABA J 33.

[6] Supra note 3 at 60-63, 96-108.

[7] John Wilder May, The Law of Insurance: As Applied to Fire, Life, Accident, Guarantee and Other Non-maritime Risks, ed by John Gould (Boston: Little, Brown, & Co, 1900) vol 1 at §1.3.

[8] See, e.g., David Owen, Philosophical Foundations of Tort Law (Oxford: Clarendon Press, 1995); Mark Reiff, “No Such Thing as Accident: Rethinking the Relation Between Causal and Moral Responsibility” (2015) 28:2 Can JL & Jur 371; and William Rowe, “Responsibility, Agent-Causation, and Freedom: An Eighteenth-Century View” (1991) 101:2 Ethics 237.

[9] Supra note 3 at 331-33.

[10] Tony Weir, “Subrogation & Indemnity” (2012) 71:1 Cambridge LJ 1 at 2.

[11] Charles Mitchell & Stephen Watterson, Subrogation: Law & Practice (Oxford: Oxford University Press, 2007) at 1.01.

[12] Ibid at 10.04.

[13] Obviously, it would also be illogical to immunize tortfeasors from liability when they cause insured harm.

[14] This can, of course, be plural in cases of e.g. contributory negligence.

[15] Barbara Billingsley, “Somersall, Subrogation and the Supreme Court: How the Top Court’s Ruling in Somersall v. Friedman Undermines Insurance Law Theory and Practice” (2003) 40 Alta L Rev 917.

[16] 2002 SCC 59, [2002] 3 SCR 109.

[17] CED 4th (online), Insurance, “Subrogation: Rights and Obligations of Insurer and Insured Relating to Subrogation” (IX.10.(b).(ii)) at §487.

[18] Supra note 16 at para 46.

[19] That is, the insured parties reached an agreement with the negligent motorist whereby he would admit liability in exchange for claimed damages equal to the limit of his insurance coverage.

[20] As will be made clear, this is an important shift from the classical position, which suggests that “subrogation is a creature of equity not founded on contract, but arising out of the relations of the parties” (National Fire Insurance Co v McLaren (1886), 12 OR 682 (Ont Ch) at 687).

[21] Supra note 16 at para 48.

[22] Ibid at para 47.

[23] Ibid.

[24] See, e.g., Matthew Conaglen & Peter Turner, “Subrogation, Accounting & Unjust Enrichment” (2010) 69:1 Cambridge LJ 30.

[25] See generally: Ronald Horn, Subrogation in Insurance Theory & Practice (Homewood: Irwin, 1964).

[26] Supra note 3 at 917.

[27] Kendal Gummer, “Subrogation in the Rear-View: Evaluating Alberta's Current Approach to Automobile Liability Insurance for Impaired Drivers” (2014) 51:3 Alta L Rev 601 at 612.

[28] Supra note 16 at paras 46-55.

[29] Ibid at para 56.

[30] Non-Marine Underwriters, Lloyd's of London v Scalera, 2000 SCC 24 at para 70, [2000] SCJ No 26.

[31] Supra note 16 at para 46.

[32] Ibid at para 50.

[33] Ibid at para 51.

[34] Ibid at para 53.

[35] Ibid at para 56.

[36] Ibid at para 47.

[37] One major legal search engine reports 85 judicial citations of the Somersall decision. Another returns only 77. The differences, however, are only reflected in cases with a tangential relationship to the subject matter at issue in this discussion.

[38] 2014 NSSC 425, 2014 CarswellNS 892.

[39] Campbell-MacIsaac v Deveaux, 2004 NSCA 87 at para 58, 2004 CarswellNS 257.

[40] Supra note 38 at para 19.

[41] 2013 ABQB 320, 2013 CarswellAlta 897.

[42] Ibid at para 35.

[43] Zurich Insurance Co v Ison TH Auto Sales Inc, 2011 ONSC 1870 at para 25, 2011 CarswellOnt 2207.

[44] See also: Kovacevic v ING Insurance Co of Canada, 2015 ONSC 3415, 254 ACWS (3d) 444.

[45] Supra note 43.

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The DEFENCE WINS…

DAMAGES FOR MINOR INJURIES IN NOVA SCOTIA: A NEW CASE ON THE NEW CAP

By Jennifer Taylor – Research Lawyer
Stewart McKelvey, Halifax 

This post originally appeared on the Stewart McKelvey website on April 20, 2017.
 
Stewart McKelvey partners Christa Brothers, Q.C. and Chris Madill, with associate Sara Nicholson, successfully represented the Defendant in this matter.

Damages for pain and suffering are capped for Nova Scotians who are injured in motor vehicle accidents if their injuries are considered “minor.” The cap was amended for accidents occurring on or after April 28, 2010. In a recent decision about an accident that occurred in July 2010, Justice Robertson of the Nova Scotia Supreme Court agreed with the Defendant that the Plaintiffs’ injuries were minor, applied the new cap, and limited the Plaintiffs’ damages for pain and suffering to $7,500 each.

The case is Warnell v Cumby, 2017 NSSC 88. The Plaintiffs, a wife and husband, were injured in a head-on collision near New Germany, Nova Scotia, when the Defendant driver “failed to negotiate” a sharp turn and collided head-on with the Plaintiffs’ truck. Liability was not at issue, but Justice Robertson still had to determine whether the Plaintiffs’ injuries were caused by the Defendant’s negligent driving, and the amount of damages to which they were entitled.

The Plaintiff wife suffered neck, shoulder, and back injuries. She gradually returned to work as a personal care worker a few months after the accident, but stopped working about 15 months post-accident because of hip pain (a labral tear). She claimed $100,000 in general damages for pain and suffering.

The Plaintiff husband suffered neck and back injuries, and subsequently complained of wrist pain. He had gone back to his job as a tool pusher on international oil rigs within a year of the accident and was still working full-time at the time of trial in October 2016. His general damages claim was for $65,000.

It was up to the Plaintiffs to prove their injuries were not minor, in order to be awarded damages beyond the capped amount of $7,500 (the 2010 amount; since then, the cap has been adjusted every year for inflation). Justice Robertson, relying on Justice Chipman’s 2016 decision in Gibson v Julian for the law on the cap, reviewed the Plaintiffs’ treating physicians’ narratives in detail to assess whether their injuries met the criteria of “minor injury” in Nova Scotia’s Insurance Act and Automobile Accident Minor Injury Regulations. A “minor injury” is defined as a sprain, strain, or whiplash-associated disorder injury “that does not result in a serious impairment” making the claimant substantially unable to perform their essential tasks at work, school, or home.

There was no expert evidence to support the Plaintiffs’ claims that their injuries were a “serious impairment.”

The Plaintiffs tried to introduce a report from Dr. Ivan Wong, an orthopedic surgeon, about the labral tear in the wife’s hip and whether it was caused by the accident (Dr. Wong was not called as a witness at trial despite initially being on the Plaintiffs’ witness list). Justice Robertson refused to admit this report. It did not qualify as a treating physician’s narrative, and it did not meet the criteria for a proper expert’s report under the Nova Scotia Civil Procedure Rules.

Neither were the Plaintiffs permitted to introduce Dr. Wong’s report as rebuttal evidence, because that would have constituted improper case-splitting. (See paragraph 9 of the trial decision, and the mid-trial motions decision reported as Warnell v Cumby, 2016 NSSC 356.)

Dr. Michael Gross, an orthopedic surgeon retained by the Defendant, was the only expert witness before the Court. Justice Robertson accepted Dr. Gross’s evidence that the Plaintiff wife’s hip trouble was degenerative and not caused by the accident, explaining that: “A labral tear upon impact from a motor vehicle accident would have been felt immediately, impaired her mobility immediately and resulted in a complaint about her hip pain at the emergency department. This did not occur.

According to Dr. Gross, the Plaintiff’s neck and low back pain from the accident were resolved several months before she stopped working. The hip pain that caused her to stop working was unrelated to the accident.

In the end, Justice Robertson found that both Plaintiffs’ injuries were “minor.” (The husband’s wrist injury may have been pre-existing, but even if it was caused by the accident it was not a serious impairment.)

As a result of these findings, the Plaintiffs’ general damages were limited to $7,500 each. There were some other damages awarded as well: $52,000 to the husband for loss of income to cover his time off work post-accident, and $15,000 to the wife for loss of housekeeping / valuable services (she did not get damages for past loss of income; the income replacement benefits from her insurer exceeded what she lost from not working for a brief period after the accident).

This will be an important case for defendants and their automobile insurers when relying on the new cap on general damages. Even though plaintiffs bear the burden of showing their injuries are not minor, defendants can retain medical experts to rebut the plaintiffs’ case (as was done here). Defendants can also rely on evidence from the plaintiffs’ own doctors to demonstrate that their injuries were minor and not a serious impairment in their daily lives.

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RSA V INTACT INSURANCE

Jason Mangano of Blaney McMurtry LLP successfully argued the case for Intact at first instance. RSA appealed and Jason (with the assistance of Jennifer O'Dell) also acted for Intact on the appeal.

In RSA v Intact Insurance, Ms. Wilson and her husband met with their insurance broker on February 29, 2012. Her license had been suspended on account of unpaid fines. In order to maintain coverage on her Impala she had to purchase coverage from different insurance carrier. She decided to purchase a policy from Intact that insured the Impala but designated her as an excluded driver based on her driving history. Ms. Wilson executed an Excluded Driver Endorsement. The endorsement did not make express reference to the Impala. Rather, the endorsement contained the following all-encompassing language: “See Certificate of Automobile Insurance for which automobile(s) this change applies to”. A few months later, Ms. Wilson was involved in an automobile accident while driving the Impala.

Intact denied coverage based on the Excluded Driver Endorsement. As such, RSA, the plaintiff’s uninsured/underinsured motor vehicle carrier, was forced to respond. RSA challenged the Intact denial by way of application arguing in part that the Excluded Driver Endorsement was void because it did not allegedly conform with various provisions of the Insurance Act (the “Act”). Specifically it was argued the Intact endorsement was not a form pre-approved by the Superintendent contrary to section 227(1) of the Act.

Justice Arrell dismissed RSA’s application finding that the Intact Excluded Driver Endorsement was in fact a pre-approved form. Moreover, the form was filled out clearly and was not ambiguous. He also found that Ms. Wilson was fully aware of her prohibitions from driving the Impala at the time of the accident.

The main issue in the appeal was whether Intact’s endorsement was still valid even though the form was not allegedly pre-approved. It was Intact’s position the form was in fact pre-approved. The Court proceeded with its analysis on the assumption that “for the sake of argument” the Intact form was not pre-approved. The Court reviewed various sections of the Act, FSCO’s Bulletin No. A-03.05, and cases emphasizing the main objective of the regulatory automobile insurance regime is consumer protection and guaranteed compensation for victims. The Court determined it is not the court’s role to apply the law of contract to read into the Act that a non-compliant form is necessarily void.

The Court emphasized that automobile policies are far more than commercial contracts as they form an integral social safety net. Noting “consumer protection” objective of the automobile insurance regime at play, the Court held that no matter the outcome of this case the victim would receive money from one of two insurers. The Court then held that in furtherance of this “consumer protection” objective, “courts should limit their role to implementing the insurance regime as designed by the legislature.” While acknowledging the court’s function to determine contractual disputes, the Court noted that it is the Superintendent’s function to determine the effect of breaches of the Act:

…Section 126(1) forbids an insurer from making a contract of insurance inconsistent with the Act. Significantly, s. 126(2) then provides that a contract is not “void or voidable as against an insured, or beneficiary or other person to whom insurance money is payable under contract, by reason of a failure of the insurer to comply with a provision of this Act.” (emphasis added). This seems to me to indicate that the role of the courts is to determine the validity of contracts as a matter of contract law and the consequence of a failure to comply with a provision of the Act is to be determined as specifically set out by the Act and its regulations.
The Court ultimately rejected the argument that the Excluded Driver Endorsement was somehow voided by section 227(1) because of “its alleged deviation from the pre-approved form.”

The Court summarily rejected the remaining arguments on appeal. Contrary to RSA’s submissions, the Court held that Intact’s subsequent coverage decisions have no bearing on the contractual validity of the Excluded Drivers Endorsement. It also held there was no merit to RSA’s position that conflicting evidence necessitated a trial. The Court agreed with the lower court determination that the Excluded Driver Endorsement was unambiguous, the insured was given a pink slip which clearly identified the vehicle in question, and the insured understood at the time that she was excluded from driving the vehicle even if her license were to be reinstated. As such, Intact’s Excluded Driver Endorsement was in full force and effect.

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CDL General

CDL WOMEN’S CAUCUS: GREETINGS FROM THE CHAIR Canadian Defence Lawyers Women's Caucus logo

By Aleks Zivanovic
Boghosian Allen LLP

One of the fundamental roles of our Steering Committee is to reach out to our members and determine how we can best ensure that women civil defence lawyers continue to advance professionally and how best we can serve them.  As with any major goal, there are numerous opportunities and perspectives on how we can fulfill this part of our mission. It was agreed that as a first step, we need to foster relationships and available resources that educate our members on how to develop business. 

On June 7, 2017, the Women’s Caucus hosted its first event in Toronto with its keynote speaker, Marianne Trost from The Women Lawyers Coach. Marianne came to us through the sponsorship support of the FDCC and FDCC Foundation while this inaugural event was generously sponsored by McKellar’s Structured Settlements.

We asked Marianne to speak about key practical tips on how to achieve or enhance business development skills. What we got was so much more! In her speech entitled “The Art of Rainmaking: Maximizing Your Strengths to Succeed in Business Development”, Marianne gave an insightful talk on the realities facing women civil litigators and how to maximize many of our strengths that we bring to our profession. From her discussion, she also gave some important tips focused on the value of nurturing relationships in order to build a book of business. Some of those key take away tips were:

  • Look at your existing client contacts: create a list of 10 client relationships you want to develop in the next year. By focusing on 10, it makes it achievable within this year.
  • Ask yourself how you can nurture those relationships and grow them over the next year. It doesn’t have to be grand gestures such as lunches, events and educational seminars. It can be smaller gestures such as following-up on information that you know your client would be interested in; an acknowledgment even on a personal note such as a birthday, anniversary, wedding etc.
  • Set up calendar entries for “relationship building follow-ups” with your client the same way you make other calendar entries to get stuff done. Be committed to following-up.
  • It typically takes 6 to 9 “touches” to develop a relationship where you can ask for business. A “touch” is any of your small or grand gestures.
  • When you are meeting with your client, ask them questions about their needs and how you can help them. Many clients feel like their lawyers don’t understand their business. Get to know them.
  • Be authentic, thoughtful, caring and considerate. Don’t pretend to care if you don’t.
  • Remember: people like working with people they like.

For more, Kathryn Marshall from our Women’s Caucus Steering Committee generously shared her notes taken from Marianne’s speech via our LinkedIn group.

This incredible luncheon was attended by many of our members as well as numerous guests. In the spirit of this event, we also came together as a community by supporting a local charity – The Period Purse. This charity is a grassroots organization committed to distributing feminine hygiene products, with an extra boost of emotional wellbeing, directly to homeless, abused and impoverished women. We thank all of you for bringing your extra purses filled with generous items to be distributed. In particular, we want to highlight the support of Kim Stoll and her colleagues at Fernandes Hearn, where the firm responded with so many purses that we had to have them shipped from their office!

The Women’s Caucus is proud to become more integrated into the fabric of the Canadian discussion on the advancement of women lawyers as we march forward in our efforts to reach out to find ways where we can lead, educate, empower and build our networks.  To enhance our discussion on how we can use our voices and speak to issues of concern to us as professionals from across our country, we now have a CDL Women’s Caucus LinkedIn Discussion Group exclusively for our members. We hope each of you will join. To join this group, login to your LinkedIn, search for the group CDL Women’s Caucus – and request to be a member.

Let’s talk and get things done! On behalf of Heather and I, we wish everyone a relaxing and safe summer. 

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CDL MEMBERS APPOINT NEW BOARD OF DIRECTORS

At the CDL Annual General Meeting and Conference in Toronto on June 8, 2017, a new Board of Directors took office. CDL is delighted and eager to move forward with this dedicated group of volunteers. 

Interested in being a part of the future of CDL? Enthusiastic and motivated members representing the diversity and experience of Canada’s defence community are always welcome. Contact Randi Glass, Executive Director randi@cdlawyers.org to learn more about volunteer opportunities.

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CDL ANNOUNCES 2017 AWARD WINNERS

CDL is thrilled to announce Clarence Beckett, QC of Patterson Law in Nova Scotia as the 2017 recipient of the Lee Samis Award of Excellence. A public celebration is being planned in Nova Scotia later this year.

CDL is delighted to announce Jason Frost of Schultz Frost LLP in Toronto as the 2017 recipient of the Richard B. Lindsay QC Exceptional Young Lawyer Award.

Be sure to read Nick Hooper’s winning essay on subrogation in this newsletter. Nick is this year’s recipient of the CDL Foundation $5000 essay prize. Nick just graduated from Schulich Law School at Dalhousie University and will be entering the LLM program in September.

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HONOURING A COLLEAGUE? CELEBRATING A PROFESSIONAL MILESTONE?

Consider the CDL Foundation – support excellence in legal education through our scholarship award program. Donate online at www.cdlfoundation.org  

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