Insurance Binder - Spring 2009
Transcription
Insurance Binder - Spring 2009
fåëìê~åÅÉ=_áåÇÉê [LEGAL ISSUES OF INTEREST TO THE INSURANCE INDUSTRY]= Volume 1, No. 1 Spring 2009 Pages 1– 8 The Insurance Defence Practice Group is pleased to send you the inaugural issue of our new insurance defence newsletter. The objective of this newsletter is to offer the insurance industry a defence counsel perspective on claims management, from the initial investigation through to trial, with reference to relevant court decisions. La Responsabilité des Assureurs Automobile hors de l’Ontario Given that our Insurance Defence Group practices in both official languages, we have included articles in both French and English. Le contrat d’assurance est-il assujetti à la Loi sur les assurances1 de l’Ontario? (ciaprès la « Loi ») Articles Même si l’assureur n’émet pas de police en Ontario, une police d’assurance émise dans une autre Province ou État des État-Unis se trouvera assujettie à la Loi si l’assureur a déposé l’engagement [ ci-après « l’engagement »]d’assurer la couverture minimum prévue par cette Loi. Une liste des assureurs qui ont déposé l’engagement se trouve au site web de la Commission des services financiers de l’Ontario au http://www2.fsco.gov.on.ca/misc/s226.htm. Pg. 1 La Responsabilité des Assureurs Automobile hors de l’Ontario Pg. 4 Ontario Judge Enforces Release of Liability Despite Negligence and Breach of Contract Pg. 6 A Primer on Interim Benefits in Accident Benefits Arbitrations – What You Need Cet article vise la manière d’éviter certains résultats imprévus qui peuvent arriver aux assureurs hors de l’Ontario lorsqu’un de leurs assurés blesse un particulier lors d’un accident d’automobile en Ontario. Le fait d’avoir déposé l’engagement en Ontario produit pour l’assureur étranger d’importants effets. Premièrement, l’assureur profite du seuil législatif, qui protège l’assureur de toute responsabilité pour 1 L.R.O. 1990, c. I. 8, tel que modifié 1 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter dommage non-pécuniaire au cas où le réclamant ne réussirait pas à établir une incapacité « permanente et sérieuse »2 résultant des blessures causées par l’assuré. Par contre, l’engagement rend l’assureur responsable de la couverture minimum de 200,000$3 et ce, même si l’assuré aurait fait quelque chose qui rendrait nul le contrat. En fait, les causes de nullité relative entre l’assureur et l’assuré ne sont pas opposables aux réclamants tierce parties à concurrence de la limite minimum de 200,000$4. Spring 2009 L’assureur étranger qui ne dépose pas l’engagement peut opposer les causes de nullité contractuelle et contre son assuré et contre la victime de l’accident. Cependant, dans l’absence de nullité de contrat, cet assureur étranger risque être responsable jusqu’à la limite de la police pour tout dommage que le réclamant puisse prouver et ce, même pour les incapacités non permanentes ou sérieuses, car l’assureur étranger qui ne dépose pas l’engagement ne profite pas du seuil légal concernant les dommages non-pécuniaires. Par exemple, si un automobiliste assuré par une police québécoise blesse par sa négligence quelqu’un en Ontario, la victime de l’accident aura droit à 200, 000$ d’indemnité malgré tout geste de l’assuré qui rendrait nulle la police entre ce dernier et l’assureur. Alors, si l’assuré a opéré son véhicule pour des fins commerciales alors que la police excluait cette utilisation, l’exclusion ne serait pas opposable à la victime de l’accident. En ce sens, la Loi impose à l’assureur étranger la même responsabilité qu’elle impose à un assureur ontarien. La responsabilité absolue des assureurs étrangers pour les frais de soins de santé des réclamants Même aux assureurs étrangers qui ont déposé l’engagement, la Loi ontarienne impose une responsabilité unique pour les frais de soins de santé encourus par une victime auprès du régime public, le Régime d’assurance-santé de l’Ontario (la « RASO ».) En effet, la RASO conserve un recours subrogé contre tous les assureurs étrangers pour s’indemniser de ces frais. Un troisième effet pour l’assureur étranger ayant déposé l’engagement est l’obligation de fournir la couverture minimum ontarienne concernant les indemnités sans égard à la faute (appelées les indemnités « légales »). Si l’assuré se blessait lui-même dans l’accident, il aurait droit aux mêmes indemnités légales qu’un assuré ontarien. De plus, même le réclamant tierce partie pourrait avoir droit aux indemnités légales de l’assureur étranger si le réclamant n’a pas de couverture semblable5. La Loi sur l’assurance-santé 6de l’Ontario oblige aux demandeurs des actions en justice pour dommages corporelles résultant d’un accident automobile d’inclure une demande subrogée7 de la part de la RASO pour les frais de soins de santé affectés au traitement des blessures pertinentes. Cependant, la RASO n’a pas de tel recours contre les assureurs ontariens8. Puisque la majorité des demandeurs en Ontario poursuive des défendeurs assurés par des assureurs ontariens, les procureurs des demandeurs ont l’habitude de ne pas inclure à la demande un recours subrogé de la part de la RASO. Cette omission 2 défini depuis le 1er octobre 2003 au Règlement 461/96, aux articles 4.1 et seq. 3 art 251 de la Loi 4 art. 258(4) de la Loi 5 art. 268(2) de la Loi 6 L.R.O. 1990, c. H.6, tel que modifié voir la note 6 à l’art. 31 8 voir la note 6, à l’art. 30(5) 7 2 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter risque d’induire en erreur un assureur étranger lors d’un règlement ou même d’un jugement. Spring 2009 RASO. En ce faisant, les assureurs ontariens paient les frais de soins de santé d’avance et sont en droit, selon la Cour d’appel, de profiter de l’immunité légale des frais de la RASO que leur confère la Loi. Pour les accidents ayant eu lieu le ou après le 1er octobre 2003, la Loi sur les assurances rend responsable des frais de soins de santé de la victime tout assureur étranger à condition que la victime établisse une incapacité qui atteint le seuil légal, c’est-à-dire une incapacité permanente et sérieuse9. Même si la victime ne demande pas d’indemnisation pour ces frais à son action en justice, la Loi sur l’assurance-santé confère à la RASO un recours indépendant que cette dernière conserve malgré toute quittance ou jugement en faveur de la victime10. Pour ce motif, il est impératif pour les assureurs étrangers d’insister sur une quittance signée de la RASO avant de régler avec une victime qui s’est fait soigner en Ontario pour une séquelle d’un accident automobile. Conclusion L’engagement d’un assureur étranger de fournir la couverture minimum en Ontario est souvent cité comme une protection pour l’assureur (« défendeur exclu » ou Protected Defendant Undertaking). Il est vrai que cet engagement donne à l’assureur étranger les même protections qu’ont les assureurs ontariens lorsque l’incapacité d’une victime n’atteint pas le seuil légal d’incapacité permanente et sérieuse. Il faut dire cependant que la majorité des décisions concernant le seuil accorde à la victime la qualité de l’incapacité permanente et sérieuse. Alors, l’utilité du seuil légal pour l’assureur est souvent remise en question. D’ailleurs, la Loi sur l’assurance-santé oblige tout assureur de notifier la RASO avant de négocier un règlement d’une réclamation qui pourrait comprendre des frais de santé qui ont été d’abord payés par la RASO11. Les assureurs ont l’option de payer la RASO directement pour l’indemnisation de ces frais. Ce paiement libère l’assureur de sa responsabilité envers la victime à concurrence du montant payé. Il importe alors de souligner la situation défavorable dans laquelle un assureur étranger pourrait se trouver lorsque son assuré blesse quelqu’un en Ontario. Premièrement, l’assureur étranger demeure responsable pour tout frais de soins de santé d’une victime qui atteint le seuil. Deuxièmement, l’assureur sera responsable de la négligence de son assuré jusqu’à 200, 000$ malgré toute exclusion de la police qui pourrait s’appliquer entre les parties à la police. Troisièmement, l’assureur étranger s’engage, en déposant l’engagement, à fournir les indemnités légales ontariennes non seulement à son assuré mais également à la victime tierce partie lorsque cette dernière n’a pas de couverture semblable provenant du véhicule impliqué dans l’accident . La Cour d’appel12 a justifié le traitement inégal des assureurs étrangers concernant la responsabilité des frais de soins de santé en se référant au système de subvention de la RASO. En effet, tout assureur automobile ontarien, à condition de recevoir son permis d’opération, doit payer une subvention à la 9 arts. 267.5(3), 267.8(5) et 267.8(18) de la Loi voir la note 6, aux arts. 36.0.1 et 34 11 voir la note 6, à l’art. 35 12 Georgiou c. Scarborough (Ville de) (2002), 217 D.L.R. (4e) 613 Mark Seebaran Lawyer, Insurance Defence Group 613-231-8352 [email protected] 10 3 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter Ontario Judge Enforces Release of Liability Despite Negligence and Breach of Contract Spring 2009 liability that purported to waive his legal rights (and those of his estate, heirs and beneficiaries) and exempted the dive shop and its instructors from all liability for personal injury or wrongful death whether caused by active or passive negligence. The instructors read the document aloud during the orientation session and provided the students with an opportunity to ask questions about it. Three days after signing the release of liability, Mr. Isildar died while participating in the deep dive portion of the course. From scuba diving to bungee jumping, white water rafting to sky diving, the popularity of high-risk sports is undeniable. For some, these sports offer the thrill of adventure while for others the allure is in confronting the unpredictable. For all, however, there is a heightened risk of injury and in some cases, even death. In order to protect themselves from law suits, most companies in the business of extreme sports or events require that participants sign releases of liability preventing them from suing in the case of an accident. Whether and under what circumstances such releases will be enforced in the province of Ontario was, until recently, wholly unclear. A recent Ontario decision has, however, provided some guidance on the matter. In Isildar v. Kanata Diving Supply, a division of Rideau Diving Supply Ltd.13, an Ontario Judge enforced a release of liability despite having found that both the dive shop and the diving instructor were in breach of contract and had acted negligently. Analysis Having found a breach of contract and negligence on the part of both the dive shop and the instructor, Justice Roccamo moved on to consider whether the release of liability signed by the deceased was enforceable. After reviewing the case law, Justice Roccamo held that a three-staged analysis was required: 1. Is the release valid in the sense that the plaintiff knew what he was signing? Alternatively, if the circumstances are such that a reasonable person would know that a party signing a document did not intend to agree to the liability release it contains, did the party presenting the document take reasonable steps to bring it to the attention of the signator? Facts The case was brought by the wife and son of a 28 year-old engineer from Ottawa who died during a deep-dive in the St. Lawrence. In the spring of 2003, after completing a five-week recreational scuba diving certificate program developed by the Professional Association of Dive Instructors (PADI), Mr. Isildar enrolled in an advanced course that included three compulsory open water dives, one of which was a deep dive. During the orientation class for the course, Mr. Isildar signed a release of 2. What is the scope of the release and is it worded broadly enough to cover the conduct of the defendant? 3. Whether the waiver should not be enforced because it is unconscionable? 13 [2008] O.J. No. 2406 (Sup. Ct.). The defendant diving instructor, Sara Dow, was represented by Peter Cronyn and Joseph Griffiths from Nelligan O’Brien Payne. 4 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter Spring 2009 own safety; and a reasonable person in Mr. Isildar’s position would have understood that the release of liability addressed the possibility of human error and the negligent exercise of judgment. On the first stage of the analysis, Justice Roccamo concluded that Mr. Isildar, an educated and careful man, knew that he was signing a release of liability. He was thus, barring a finding that the release was unconscionable, bound by its terms. Considerations Although not required in light of the preceding conclusion, Justice Roccamo further held that the reasonable steps requirement was also met as the instructors had read the release of liability verbatim in class and had offered students the opportunity to ask questions. Among other things, it was also highlighted that the deceased had signed an almost identical release just months earlier in his certification course. On the second stage of the analysis, Justice Roccamo held that the release of liability was sufficiently broad to capture the defendants’ negligent conduct and breach of contract. The release, which was accompanied by a Statement of Understanding on Safe Diving Practices, referred specifically to injury or death by active or passive negligence. In particular it “specifically contemplate[d] the types of harm that resulted in Mr. Isildar’s death, including panic, hyperventilation and drowning.” The final leg of the analysis was whether the release was unconscionable. Based on the nature of the release and the circumstances in which it was signed, Justice Roccamo concluded that the release was not divergent from community standards and was thus enforceable. This conclusion was based largely on the following: Mr. Isildar knew of the inherent risks associated with scuba diving; nothing had forced him to sign the release of liability; Mr. Isildar had chosen to participate in the advanced scuba diving course; despite the failures of the defendants, Mr. Isildar had a joint responsibility to control the circumstances of the dive and to ensure his • Judges are willing to enforce waivers of liability, even in the face of negligence and breach of contract. • Individuals signing waivers of liability should read the terms of the contract carefully and not just assume that they will not be enforced. • Companies should ensure that releases of liability are carefully drafted. Among other things, the release should clearly detail the risks that are involved in the sport or event, as well as the parties and scope of conduct that the release intends to cover. • Although in some circumstances there will be no obligation to take reasonable steps to ensure that a release is read by a participant and the risks of the event understood, it is prudent for companies to take reasonable steps in all circumstances. * An appeal and cross-appeal of this decision have been taken. Jessica Fullerton Lawyer, Insurance Defence Group 613-231-8366 [email protected] 5 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter A Primer on Interim Benefits in Accident Benefits Arbitrations – What You Need to Know Spring 2009 delay by way of an award of interest, the damage may already be done. In an effort to balance these competing concerns, the past jurisprudence has developed a two-part test, requiring the claimant to demonstrate: (a) a prima facie case on entitlement; and (b) urgency. In applying this test, arbitrators have held that demonstrating a prima facie case requires more than the existence of conflicting medical opinions (Ayoub v. Aviva Canada Inc., FSCO No. A05-001045 (Sone)). Similarly, unless a claimant is deprived of a substantive right, mere non-compliance with the SABS will not be sufficient (Galati v. Aviva Canada Inc., FSCO No. A04 B 001256 (Feldman), and Ayoub v. Aviva Canada Inc., supra). The requirement of urgency means something more than the ordinary financial need resulting from the denial of weekly benefits which can be compensated through interest or a special award (Coutu v. Wawanesa Mutual Insurance Co., FSCO No. A01-001446 (Renahan), and Ayoub v. Aviva Canada Inc., supra). The world of accident benefits claims is largely a world unto itself. This is especially true where a claimant elects to have a dispute over benefits determined by way of an arbitration proceeding before the Financial Services Commission of Ontario (“FSCO”). Unlike the traditional court proceedings, arbitration proceedings follow their own set of rules, and sometimes include their own specialized remedies. One of the lesser known remedies that is available in FSCO proceedings is the payment of benefits on an interim basis pending the outcome of the proceedings, otherwise known as “interim benefits”. While motions requesting interim benefits are not common, a motion for interim benefits has the potential to radically alter the dynamics of the arbitration proceedings, and the potential risk faced by the insurer. As a result, it is important to have an understanding of this remedy, and the potential impact it can have on the arbitration. Although motions for interim benefits are typically seen for claims involving income replacement benefits, the relief is available for any of the benefits available under the Statutory Accident Benefits Schedule. The authority to award interim benefits stems from s.279(4.1) of the Insurance Act, R.S.O. 1990, c.I.8. However, this section does not provide any guidance as to how the discretionary power is to be applied. Attendant care benefits have been awarded where there is evidence that a claimant is at serious risk for injury (see eg. Dolmovic v. Zurich Insurance Co., FSCO No. A08-000460 (Kominar); Haimov v. ING Insurance Co. of Canada, FSCO No. A05-002734 (Murray) and Keyes v. Personal Insurance Co. of Canada, FSCO No. A06-001156 (Muir)). Historically, arbitrators have been concerned over the proper balance of the rights of the parties. Decided by way of motion, awards of interim benefits are granted on an incomplete evidentiary record. Such an award has the potential to deprive the insurer of its right to procedural fairness, especially where the interim benefits cannot practically be repaid. On the other side of the coin, the delays inherent in the process may irreparably harm a claimant who may ultimately be awarded the benefit months or years later. Although that claimant will likely be compensated for the Caregiver benefits and medical or rehabilitation benefits are similarly available on an interim basis (see eg. Huynh v. TD Home and Auto Insurance Co., FSCO No. A05-002369 (Sampliner) where the arbitrator 6 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter Spring 2009 supra), or in circumstances where a hearing date is delayed on account of the unavailability of defence counsel (see eg. Akehurst v. Aviva Canada Inc., FSCO No. A06-001680 (Wilson)). Similarly, interim benefits can even be awarded on an interim interim basis, pending the hearing of the interim benefits motion itself (see eg. Dolmovic v. Zurich Insurance Co., supra)). considered a claim for interim caregiver benefits, but decided not to award the benefits based on the evidence; and Barrett v. State Farm Mutual Automobile Insurance Co., FSCO No. A03-001565 (Wilson), where portions of a treatment plan were ordered on an interim basis). Presumably housekeeping benefits could also be ordered on an interim basis, although, unlike other benefits, it would appear to be difficult to establish the degree of urgency required to meet the test (see the comments made in Ananthamoorthy v. TD Home and Auto Insurance Co., FSCO No. A06-001533 (Feldman)). Because a successful motion for interim benefits could potentially result in rendering the dispute a fait accompli where the claimant does not have the financial ability to repay the benefits, insurers need to be wary when these motions arise. Typically, the evidence filed by a claimant will determine the success of a motion for interim benefits. These motions will typically fail where the claimant fails to adduce any evidence on one part of the test (see eg. Ayoub v. Aviva Canada Inc., supra; Ananthamoorthy v. TD Home and Auto Insurance Co., supra; and Huynh v. TD Home and Auto Insurance Co., supra). Where the claimant is able to adduce some evidence of entitlement (even if that evidence is disputed by evidence of the insurer) coupled with some legitimate basis of urgency, arbitrators will often err on the side of caution and make the interim award subject to a right of repayment should the insurer succeed at the ultimate hearing. Even expenses can be awarded on an interim basis where the claimant is financially unable to gather the evidence required to otherwise prove the claim (see eg. Bernicky v. Guardian Insurance Co. of Canada, FSCO No. A006268; Champaigne v. Co-operators General Insurance Co., FSCO No. A03-001344 (Blackman); and Kabala v. TD Home and Auto Insurance Co. FSCO No. A04-002743 (Ashby)). However, the test for interim awards of expenses varies from the traditional test for interim benefits in that a claimant must establish: (a) a bona fide issue in the arbitration; (b) that the expenses being sought are reasonable and necessary for the conduct of the arbitration; and (c) that the claimant is financially unable to pay for the expenses being sought pending the arbitration hearing (see Bernicky v. Guardian Insurance Co., supra)). Where interim benefits are awarded, the benefits are typically made payable as of the date that the motion was filed, and will typically be free of any interest (see Saunders v. Royal & Sunalliance Insurance Co. of Canada, FSCO No. A07-000499 (Wilson). Not only are interim benefits available as a temporary form of relief in and of themselves, but interim benefits can also be imposed upon an insurer as a condition for the granting of an adjournment request (see eg. Barrett v. State Farm Mutual Automobile Insurance Co., Insurers need to be alert to the possibility of these motions in order to effectively respond to arbitrations. With the removal of Designated Assessment Centres as of March 1, 2006, and the corresponding requirement to pay benefits pending the dispute of a positive 7 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ] Nelligan O'Brien Payne – Insurance Binder Newsletter DAC, it was expected that the number of motions for interim benefits would increase. A review of the decisions reported by FSCO suggests that there has been some increase in the number of these motions, and the frequency of these motions might increase further with the greater number of decisions being released. Insurers will need to be ready to address such motions as they arise. Similarly, insurers need to be cautious in requesting adjournments or taking any other steps that might delay a hearing since to do so places the insurer at risk for having an order for interim benefits imposed upon it. Spring 2009 Nelligan O’Brien Payne is a multi-service law firm with offices in Ottawa, Kingston, Vankleek Hill and Alexandria. We have over 40 talented lawyers and consultants whom you can ask for advice in these key areas: • • • • • • • • • • • • • • • • James Brown Lawyer, Insurance Defence Group 613-231-8345 [email protected] Business Law Class Actions Condominium Law Employment Law Estate Planning and Administration Family Law Financial Institutions Insurance Defence Intellectual Property Labour Law Litigation Municipal Law Personal Injury and Wrongful Death Public Law and Regulatory Affairs Real Estate and Development Technology Law Our Insurance Defence Practice Group Lawyers Al O’Brien Peter Cronyn Patricia Lawson Stacey Lister Susan Bromley John Lundrigan Mark Seebaran Colin Dubeau Joseph Griffiths James Brown Raymond Murray Craig O’Brien Jessica Fullerton Sacha Baharmand 613-231-8224 613-231-8213 613-231-8290 613-231-8272 613-231-8355 613-231-8325 613-231-8352 613-231-8367 613-231-8369 613-231-8345 613-231-8305 613-231-8331 613-231-8366 613-231-8310 Insurance Binder is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. Questions and comments concerning materials in this newsletter are welcomed. Please feel free to contact the author of the article. Copies of this newsletter are also posted on our Web site at www.nelligan.ca. © Copyright 2009 Nelligan O’Brien Payne LLP 8 Nelligan O’Brien Payne LLP [ OTTAWA ] [ KINGSTON ] www.nelligan.ca [ VANKLEEK HILL ] [ ALEXANDRIA ]
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