In Melo v. Northbridge Personal Insurance Corporation, Justice Croll, writing for The Divisional Court, confirmed that pursuant to s. 11(6) of the License Appeal Tribunal Act, an appeal from a decision of the Tribunal relating to a matter under the Insurance Act, R.S.O. 1990, c. I.8 may be made on a question of law only. Justice Croll further indicated that the standard of review to be applied is reasonableness.
The Appellant was involved in a motor vehicle accident on August 28, 2015. He applied for statutory accident benefits from his own insurance company, Northbridge Personal Insurance Corporation. The Adjudicator found that the Appellant was not entitled to income replacement benefits in the amount of $389.11 per week from January 28, 2016 to the date of his decision.
Justice Croll indicated that the Adjudicator cited the correct legal test to prove entitlement to an income replacement benefit, and correctly identified and conducted the comparative exercise that section 5(1) of the Schedule requires. The Adjudicator weighed the evidence, applied the proper stand of proof, and provided reasons for his findings, which were all ground in the material before him. Justice Croll indicated that the Adjudicator’s exercise of weighing the evidence and preferring some evidence over other evidence does not amount to a question of law only. Justice Croll stated that the Appellant failed to establish an error of law and that the Adjudicator’s decision was reasonable as it was within the range of possible outcomes.
In Sacks v. Ross, the Ontario Court of Appeal dealt with how to apply the causation test in medical negligence cases involving multiple tortfeasors.
Sacks suffered serious injuries arising from complications after a routine bowel surgery. An anastomotic leak occurred after surgery, which spilled into his abdominal cavity, but the discovery of the leak was delayed, and by the time treatment started, he was in septic shock. Ultimately, he was in a coma for several weeks and his legs were both amputated.
At trial, Sacks put forth that the delay and treatment caused his injuries, which were the result of cumulative errors made by the respondents, a team of doctors, nurses and Sunnybrook Hospital, who treated him after his bowel surgery. The respondents argued that the delay in diagnosis did not cause Sacks’ injuries – his injuries were actually caused by flesh eating disease, which could not have been diagnosed or treated when it first arose.
At trial, the jury found five of the defendants breached their respective standards of care, but none of the breaches caused the injuries. Sacks appealed, arguing that the trial proceeded on a mistaken understanding of the appropriate causation test, evidenced by improper jury questions and instructions. Sacks argued that in cases involving multiple tortfeasors, a “global but for” test for causation should apply.
Ultimately, the Ontario Court of Appeal dismissed the appeal. The Court followed the prior Clements decision, where the Supreme Court found that the “but for” test also applies in complex, multiple tortfeasor, negligence cases.
The Sacks decision is significant for the Court’s discussion of the causation test and how it should be applied in complex negligence cases. The Court reminded that the normal causal reasoning process follows three steps:
Step one: what likely happened in actuality – whether the delay in treatment led to the plaintiff’s injury?
Step two: what would have happened if the defendant had not breached their standard of care?
Step three: allocate fault amount the negligent defendants
The analysis requires the jury to analyze each event in the sequence of events, while ignoring any decision it might have made with respect to an earlier event.
To reflect the causal reasoning process, the court recommended framing the jury questions as follows:
Have the Plaintiffs proven, on a balance of probabilities, that a delay in treatment caused Sack’s injuries?
If yes to #1, have the Plaintiffs proven, on a balance of probabilities, that the delay resulting from [this defendant’s] breach of the standard of care caused or contributed to the injuries of Sacks?
If yes to #2, how did [this defendant] breach the standard of care?
Importantly, question #1 only asks the trier of fact to consider what the plaintiff needed by way of timely diagnosis and treatment in order to avoid injury, without considering the presence or absence of any breaches of the standard of care. In contract, question #2 determines fault.
In the FSCO Appeal Decision of State Farm and Sabadash (P16-00029), Director’s Delegate Evans conducts a thorough analysis of the key jurisprudence on causation in Canada of the key causation decisions: Athey v. Leonati (1996 S.C.C.), Resurfice Corp v. Hanke (2007 S.C.C.)., Clements v. Clements (2012 S.C.C.) and Monks v. ING Insurance Co. (2008 Ont. C.A.) and confirms that the “but for” test is the primary causation test for SABS litigation.
Delegate Evans set out that the “material contribution to risk” test could still be applied but only once the claimant passed the “but for” test, such that there can be no fallback to use the “material contribution” test if the claimant fails the “but for” test. As a result, the “material contribution” test only becomes relevant in the rare circumstances where an accident alone and a pre-existing condition alone could have directly caused an impairment. Similarly, the de minimis test may only play a role after the “but for” test has been answered in the affirmative.
While this decision provides some much needed clarity for decisions where causation is in dispute, it may not be the final word on the subject since the claimant in Agyapong v. Jevco has filed for Judicial Review.
In Osmond v Watkins , 2017 ONSC 5729 (CanLII), the defendant successfully brought a summary judgment motion against his contractor. The defendant, Watkins, hired the plaintiff, Osmond, to complete some...
In Osmond v Watkins, 2017 ONSC 5729 (CanLII), the defendant successfully brought a summary judgment motion against his contractor. The defendant, Watkins, hired the plaintiff, Osmond, to complete some renovations at his home. While on the roof installing tarpaper, the plaintiff slipped and fell approximately 37 feet onto bricks and debris.
He brought an action against the homeowner, Watkins, claiming the accident was caused by defendant’s negligence and breach of the Occupiers Liability Act. The plaintiff’s examination for discovery evidence was that he was not wearing safety equipment, he was not aware he was supposed to wear safety equipment, and he never turned his mind to using safety equipment. Further, on the motion, the plaintiff led no evidence that his fall was caused by any defect in or lack of repair affecting the premises or any hazardous conditions associated with the premises themselves.
As a result, the court found that the only basis for liability of the defendant would be in negligence for not providing the plaintiff with the necessary safety equipment to perform roofing work on the project. The court relied on an Alberta Court of Appeal decision, Mahe v Boulianne, 2010 ABCA 32 (CanLII), that held where a lay person engages a professional or tradesman, it is presumed that the tradesman knows how to do the work and if the tradesman fails to do the work properly, he cannot blame his customer on the basis that the customer should have known better. The court went on to note that the defendant, as the occupier of premises, must ensure that the premises are reasonably safe. The defendant had no overriding duty to monitor the whether the practices followed by the plaintiff were safe. The defendant’s motion was granted. Had the plaintiff led evidence that he had informed the defendant that he was inexperienced in performing roofing work or that the scope of work was outside of his comfort level, there may have been an issue for trial.
This case confirms that, on summary judgment, unless a plaintiff is able to show, with evidence, that there was a hazard on the premises that caused the accident, a defendant may be successful in having the case dismissed.
Fiona Brown has an insurance law practice that has focused exclusively on insurance defence for 20 years. Fiona defends insurance claims covering all aspects of general insurance liability including motor vehicle accidents, occupiers’ liability, slip and falls, social host liability, and general negligence claims.
In a recent decision, the Court of Appeal affirmed that while a Long Term Disability Insurer’s duty of good faith generally includes the duty to act promptly, fairly, and disclose the contents of the policy to their Insured, it does not require the Insurer to take steps to advise their Insured of statutory limitation periods that are exist outside of those within the policy. The decision is Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), 2017 ONCA 395.
We previously discussed the details of the summary judgment decision in our post, “LTD Carriers Embrace Hryniak.” At first instance, the Plaintiff argued that because the Insurer never advised him of the statutory two year limitation period, it had breached its duty of good faith and the limitation clock only began to run when the claim was discovered. Justice Broad disagreed and found that there was no duty on the Insurer to advise the Plaintiff of the statutory limitation period and the claim was discovered upon receipt of the termination letter. The Plaintiff appealed. On appeal the Plaintiff focused solely on whether the Insurer’s common law duty of good faith included the duty to advise the Plaintiff of the 2 year limitation period in its termination letter.
The Court of Appeal upheld Broad J.’s decision and provided helpful guidance for LTD insurers. Notably, the Court of Appeal drew a distinction between the duty of good faith in the context of Accident Benefits and LTD Benefits. The Plaintiff attempted to argue that because the Supreme Court of Canada in Smith v. Co-operators General Insurance Co.,  2 S.C.R. 129, had found that Insurer’s in the Accident Benefits context were required to provide their Insured with the relevant time limits that governed the process, a similar duty should apply in the LTD context. Both benefit schemes bear significant similarities as both are first party Insurers, with similar tests for income replacement based on disability. However, the Court of Appeal found that the source of the Accident Benefits Insurer’s duty to advise of the time limits arose from the complex legislative framework that governed them and not the common law. There was no equivalent statutory provision governing LTD Insurers.
The Court found that the Plaintiff was asking the Court impose something beyond the LTD Insurer’s common law duty to disclose the contents of the insurance policy and to go a step further and disclose information outside the policy. The Court noted that no Canadian court had gone so far and in the jurisdictions that require Insurers to disclose limitation periods this obligation had been put in place by the Legislature. Accordingly, the Court commented that while it might be advisable from a practical standpoint to inform an Insured of the statutory limitation period, the role of making this a legal obligation was that of the government of the day, and not the Courts.
Notably, as of July 1, 2016, amendments to the Insurance Act R.S.O. 1990 c. I.8 came into force and requires that all LTD insurers to include the following statement in the policy and certificate:
Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Limitations Act, 2002.
Overall, this decision is a welcomed one for LTD insurers. The Court has made it clear that the expansion of an Insurer’s duty of good faith beyond the established case law is the responsibility of the Legislature and not the Courts. Although there are significant similarities between Accident Benefits and Long Term Disability claims, the statutory framework is the source of significant differences in the proper termination and handling of benefits. The Court has provided clarity that in the Long Term Disability context, the Insurer’s duty of good faith has not been extended to require informing the claimant of information outside the four corners of the policy. With the amendments to the Insurance Act, the provision of the policy to an Insured will satisfy their good faith obligation to provide information and provide a strong basis for any limitations argument an Insurer may want to raise against out of time claims.
The Court of Appeal released two decisions that hopefully put to bed the debate about the effect of legislative changes made in 2015. The court also addressed double recovery by plaintiffs, addressing the deductibility of SABS settlements and other collateral benefits from damage awards.
In Cobb v Long Estate and El-Khodr v. Lackie the court held:
That the amendment to the Insurance Act regarding the prejudgement interest rate applicable for non-pecuniary losses applies retrospectively to all actions tried after the amendment came into effect.
That the amendment to the Insurance Act indexing the deductible applies retrospectively to all actions tried after the amendment came into effect.
Double recovery by plaintiffs is to be avoided potentially weakening the strict “apples to apples, oranges to oranges” approach to deductibility of collateral benefits.
All amounts for IRB, including settlement amounts allocated to IRB, that the plaintiff received before trial, are deductible from the total damages for past and future loss of income arising from the same accident.
Lisa is Partner of Samis+Company. Lisa practices a variety of insurance-related litigation, including short/long term disability benefits, personal injury, premise liability, accident benefits, and subrogation.
The Court of Appeal for Ontario has held that a Minnesota tortfeasor with only $500,000 liability limits is an “inadequately insured motorist” under the Family Protection Endorsement (OPCF 44R) in Ontario, where the 44R limits are $1 million.
In Hartley v. Security National, the plaintiffs were injured in a motor vehicle accident while touring on a motorcycle in Minnesota. The accident occurred when the plaintiffs’ motorcycle was struck by a self-insured State of Minnesota-owned truck, operated by a state employee. The plaintiffs retained Minnesota counsel and sued the State of Minnesota for damages.
Even though Mr. Hartley’s injuries warranted damages in excess of US$500,000 dollars, he settled the action for only US$500,000, which was the maximum payable by Minnesota to a tort claimant in the circumstances. The settlement was inclusive of legal fees, including a 22 per cent contingency fee, and disbursements. After legal costs were accounted for, Mr. Hartley was left with approximately CAD$386,500.
He then claimed the difference from Security National under his Ontario policy and, more specifically, under his OPCF 44R, which provided underinsured coverage of up to $1 million. The insurer denied the claim on two grounds: Firstly, the insurer claimed that Minnesota was not an “inadequately insured motorist” within the meaning of OPCF 44R. Secondly, the insurer claimed that U.S. legal fees were not recoverable under the OPCF 44R.
The motion judge found for the plaintiffs on both issues.
The Court of Appeal agreed with the motion judge that Minnesota was an “inadequately insured motorist” but disagreed that the legal fees were recoverable.
“Inadequately insured motorist”
The evidence was that the Tort Claims Act inMinnesota provides that the State will pay compensation for property loss and personal injury caused by a state employee acting in the course of his or her employment. However, the Act contains a $500,000 cap on the amount that can be claimed by an individual and a $1,500,000 cap on the total that is payable “for any number of claims arising out of a single occurrence”. Mr. Hartley’s settlement agreement with Minnesota contained the following provision:
The parties to this Settlement Agreement agree and acknowledge that the amount paid to Plaintiff Glen Hartley and his counsel, (i.e., [US]$500,000.00) is the maximum amount Glen Hartley can recover against State Defendants pursuant to Minnesota law, including Minn. Stat. §3.736.
Security National raised three arguments for refusing Mr. Hartley’s claim for the shortfall left after his settlement agreement:
Minnesota was not underinsured, but self-insured, and therefore underinsured coverage does not apply.
The shortfall in recovery was not the result of underinsurance, but the result of a statutory immunity.
Even if a self-insured state enjoying statutory immunity can be an “inadequately insured motorist”, it is not accurate to say that Minnesota is underinsured because Minnesota offers single occurrence coverage up to US$1,500,000 that exceeds the CAD$1,000,000 coverage ceiling payable under OPCF 44R. Security National claimed that its maximum liability is zero under the terms of OPCF 44R.
The Court of Appeal rejected all three arguments.
First, the language in the OPCF 44R was clear:
“inadequately insured motorist” means
(a) the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance or bonds, cash deposits or other financial guarantees as required by law in lieu of insurance, obtained by the owner or driver is less than the limit of family protection coverage … [Emphasis added.]
The Court held that the phrase “other financial guarantees as required by law in lieu of insurance” would include a legislated obligation by an uninsured state to indemnify its employees by paying compensation for tortious damage caused by those employees.
Second, the Court of Appeal held that the Tort Claims Act does not remove Minnesota’s liability: It limits the damages that can be collected from Minnesota:
Instead of assisting Security National, the cap on damages produces a shortfall between what Mr. Hartley is “legally entitled to recover” in damages, and what he is entitled to receive, thereby triggering a right of indemnity under OPCF 44R.
Finally, The Court of Appeal dismissed the insurer’s argument that the $1.5 million cap represents the “total of all limits” available to the claimant for the purpose of section 4 of the OPCF 44R:
When the words “the total of all limits of motor vehicle liability insurance, or bonds, or cash deposits, or other financial guarantee as required by law in lieu of insurance, of the inadequately insured motorist” in s. 4 are given their ordinary meaning in context, it is clear that they refer to the funds available to the claimant bringing the claim.
As Mr. Hartley’s claims were limited to $500,000, there was a shortfall within the meaning of section 4 of the OPCF 44R.
Section 3 of the OPCF 44R requires the insurer to indemnify the insured for the shortfall in “compensatory damages in respect of bodily injury to or death of an insured person arising directly or indirectly from the use or operation of an automobile” [emphasis added].
The motion judge found that the legal fees were not “compensatory damages”, but held that the fees could be recovered from the insurer as special damages. The Court of Appeal disagreed:
To use the vehicle of special damages to provide compensation for costs incurred in securing compensatory damages undermines the contractual agreement of the parties.
The Superior Court of Justice recently released an important decision finding full indemnity costs payable in a coverage case.
In the underlying action, a young boy was severely injured by a car after his father dropped him off in a parking lot. The boy (via his litigation guardian) and the boy’s mother (via the Family Law Act) sued the father for damages. The father’s insurer found a duty to defend and the insurer’s counsel represented him at trial. At trial, over $900,000.00 in damages were awarded. Following the trial, the father’s insurer denied coverage.
The mother and boy brought a claim against the father’s insurer under section 258(1) of the Insurance Act, which allows parties to bring a claim to enforce judgment against insurers. At the summary judgment motion, the court found that there was coverage.
The significance of Hoang v. The Personal Insurance Company is the court’s determination on costs. The court found costs payable to the mother and boy on a full indemnity scale, rather than the usual partial indemnity scale.
The court rationalized the full indemnity on the basis that the insurance premium is presumed to reflect the insurance company’s risk. It would be unfair and burdensome to make customers pay a premium plus legal fees in order to obtain the coverage they purchased. If the insurer chooses to attempt to reduce its risk by engaging in coverage litigation, it should be made to fully compensate the successful party if it losses. Ultimately, the court ordered the insurer to pay full indemnity costs at $72,000.00.
This decision marks a possibly new exception to the general policy of awarding partial indemnity costs to successful parties. It is something that both coverage counsel for insurers and policy holders need to keep in mind moving forward, as denying coverage under a policy now can apparently be very costly.