Is the information in a statement by an Insured to an Insurer privileged?

Is the information in a statement by an Insured to an Insurer privileged?

Sangaralingam v. Sinnathurai, [2009] O.J. No. 5211 (Master).

During examinations for discovery, information gathered by insurance companies during its process of investigation into a claim, are sometimes the subject of dispute.

For example, counsel for an insurer will usually assert privilege over the document containing a statement made by an insured to the insurer during the course of investigation.

The document itself is privileged. But the question arises whether the "material information" in the statement is also privileged.

Master Short recently dealt with a motion in which the plaintiff sought an Order directing a defendant to disclose information contained in a statement delivered to his insurer following a motor vehicle accident.

Counsel for the plaintiff asserted that even if the statement is privileged, the contents of the statement must be disclosed on discovery.

Master Short quoted Justice Lane in Greco v. Thornhill, [1993] O.J. No. 1347, who wrote that information which is relevant may not be withheld from disclosure merely because it has also been incorporated into a privileged document. For example, with respect to surveillance the questioner is entitled to know what the investigator saw, his knowledge, information and belief, but not to have the document itself. However, the situation is different in the case where the witness has already testified to the facts and what is being requested is not the facts but what the witness said about the facts to her insurer. Justice Lane held that such questioning is clearly devoted solely to the credibility of the witness and the witness is not obliged to respond.

Master Short held that a witness who has been examined for discovery and makes him or herself available to the party opposite to answer any relevant questions is not obliged to then also provide the material information contained in a statement made to its insurer.
Season's Greetings

Season's Greetings

Thank you to our readers and to those who have taken time to post comments on the blog this year. We appreciate your input and support. We wish you all the best in 2010. Happy holidays from the Ontario Insurance Law Blog!

John and Tara
GCS that Fluctuates Above 9 May Still be Considered Catastrophic

GCS that Fluctuates Above 9 May Still be Considered Catastrophic

Liu v. 1226071 Ontario Inc. (Canadian Zhorong Trading Limited)(2009), 97 O.R. (3d) 95 (C.A.).

The Court of Appeal has released a decision that may make it more difficult to resist a declaration that a claimant is catastrophically impaired.

In Liu, the plaintiff was injured in a motor vehicle accident on April 9, 1999. His initial Glasgow Coma Score (“GCS”) was 3/15. His GCS steadily increased and by the time he arrived at hospital 26 minutes later, his GCS was 14. The definition of “catastrophic impairment” is brain impairment that results in a score of 9 or less on the GCS according to a test administered “within a reasonable period of time after the incident by a person trained for that purpose”. The trial judge concluded that the appellant did not suffer a catastrophic impairment, and as a result, he was not entitled to receive a damage award for future medical, rehabilitation or attendant care expenses, which the jury assessed at $858,000.00. The issue of catastrophic impairment was therefore very important to both sides.

The Court of Appeal held that as long as there is one GCS score of 9 or less within a reasonable time following the accident, the plaintiff’s impairment falls within the definition of catastrophic impairment. The fact that there may have been other, higher scores also within a reasonable time after the accident is irrelevant.

This decision has implications in both the accident benefits sphere and on tort damages. Although it simplifies the definition of catastrophic impairment to a certain extent, it permits claimants who have met the definition for a limited period of time to access increased damages. It remains to be seen whether this decision will be appealed to the Supreme Court of Canada.
What is an "accident"? - Supreme Court of Canada

What is an "accident"? - Supreme Court of Canada

In a unanimous decision the Supreme Court of Canada has today addressed the issue of whether “accident insurance” includes disease. The decision reached today will make insurers happy and a particular insurer (the one involved in this case!) very happy.

The decision is Co‑operators Life Insurance Company v. Gibbens, 2009 SCC 59.

The Supreme Court of Canada overturned a finding of coverage and an award of $200,000 by a British Columbia trial judge, which was affirmed by the British Columbia Court of Appeal.

Justice Binnie, writing for the Court, has emphasized that in ordinary speech “accident” does not include ailments proceeding from natural causes.

In this case, the plaintiff had unprotected sex with three women and acquired genital herpes, which in turn caused an unusual complication that resulted in his total paralysis. The question at the trial-level was whether his paraplegia qualified as an accident (“bodily injury occasioned through external, violent and accidental means”).

The trial judge answered yes. This was affirmed by the Court of Appeal.

The Supreme Court of Canada today said no.

Justice Binnie noted in his reasons that the definition of “accident” has been the subject of much judicial discussion over many years.

Justice Binnie concluded by stating that an “accident” insurance policy should not be converted into a “comprehensive insurance policy for infectious diseases contrary to the expressed intention of the parties and their reasonable expectations.”

Further, at para. 63, Justice Binnie wrote, “To conclude that Mr. Gibbens’ acquisition of herpes was “an accident” despite the absence of any mishap or trauma other than the acquisition of a sexually transmitted disease in the ordinary way would simply serve to add sexually transmitted diseases to the list of Critical Diseases in the group policy contrary to the intent of the policy.”

What’s the lesson from this case? Perhaps it is this. A basic principle of accident insurance, which is often forgotten, is that an accident must be fortuitous and unexpected. Injury caused by accident does not include infirmity caused by disease or old age in the ordinary course. Accident insurance is not designed to provide coverage for events that will inevitably happen to us all, such as getting old or developing pain. There is no guarantee of a payout on any kind of insurance policy - except for paid-in-full life insurance given the fact that death is a certainty!
Occupier's Liability Act - Definition of Recreational Trail

Occupier's Liability Act - Definition of Recreational Trail

Schneider v. St. Clair Region Conservation Authority (2009), 97 O.R. (3d) 81 (C.A.)

Schneider was injured while skiing in a conservation area when she left a marked trail and her ski struck a wall hidden by snow. During the winter months, the area was used for activities such as skiing, tobogganing and hiking, but the defendant did not perform any maintenance of the area. Section 3 of the Occupier’s Liability Act imposes a duty on occupiers to take reasonable care to ensure that people are reasonably safe while on the premises. Where a person willingly assumes the risks of entering premises, section 4(1) of the Act substitutes a lesser duty on the occupier to not create a danger with deliberate intent to do harm and to not act with reckless disregard. Section 4(3) of the Act is a deeming provision that provides that a person who enters certain types of premises that are outlined in section 4(4) is deemed to have willingly assumed the associated risks. Those premises outlined in section 4(4) include such property as rural premises and recreational trails.

The trial judge held that the lesser duty of care did not apply because the premises did not come within one of the categories listed in section 4(4). He noted that although the premises contained recreational trails, the concrete wall was not on one of the trails.

The Court of Appeal allowed the appeal and dismissed the action. The court reviewed the purpose and history of the Occupier’s Liability Act. The purpose of section 4 was to encourage land owners to make their lands available to the public for recreational use. The Court of Appeal sensibly stated that it would make little sense to impose a lesser standard when users remained on the trail, but to impose a higher standard when they veered off of it. The trail was being used by Ms. Schneider for recreation and it met the definition of recreational trail, thus bringing it within the provisions of section 4.
Changes to the Rules of Civil Procedure - Part 6

Changes to the Rules of Civil Procedure - Part 6

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 6 of our review of the amendments.

A new rule has been introduced which imposes additional requirements on experts. Rule 4.1 requires experts to sign an acknowledgment agreeing that they have a duty to provide evidence that is:

a) fair, objective and non-partisan;
b) related only to matters within the expert’s expertise;
c) to provide the court with assistance it needs to determine a matter in issue.

Both plaintiffs and defendants have experts that they use and know have a particular slant. Whether this rule actually results in more balanced reports remains to be seen.

The acknowledgement of duty is contained in Form 53 and it must be attached to every expert report to be relied on at trial. A copy of form 53 can be found on the Ministry of the Attorney General website at:

http://www.ontariocourtforms.on.ca/english/civil/

In addition, expert must include additional information in their reports, such as the information relied on in preparing the report. This may open up an argument that the instructing letter should be disclosed. Counsel should therefore be cautious in what information is provided to the expert.
Changes to the Rules of Civil Procedure - Part 5

Changes to the Rules of Civil Procedure - Part 5

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 5 of our review of the amendments.

Rule 20 governs summary judgment. The amendments to this rule are substantial and have the potential to make it a more valuable tool than it currently is. The changes to rule 20 will permit judges expansive powers; they will be able to weigh evidence, make inferences and evaluate credibility. Judges will also be able to hear oral evidence on a summary judgment motion to order to assist them in making decisions, rather than relying on affidavit evidence.

These changes have the potential to assist in disposing of claims at an early stage, rather than waiting until a full trial occurs, with its associated time and expense. What remains to be seen is whether judges are prepared to utilize the new rule to its full potential.

If a judges declines to grant summary judgment or grants summary judgment in part, judges have a wide variety of powers. One of the more interesting powers is the ability to order that each party's expert meet to discuss areas of agreement and disagreement. This power appears contradictory to the intent of the amendments, which focuses on reducing costs and increasing access to justice, as well as proportionality. Requiring experts to meet will increase costs to litigants and adds a level of administration because it requires coordination of the experts' schedules. Practically speaking, one would think that this would be an exceptional remedy due to the costs considerations and that where experts are diametrically opposed, there is no real use in having them try to persuade each other.

Another substantial change to summary judgment is that the costs consequences of a failed summary judgment motion have been relaxed. The current rule imposes substantial indemnity costs against the unsuccessful party; the new rule eliminates the presumption of substantial indemnity costs. The current rule has served as a deterrent to bringing summary judgment motions for fear of the costs consequences. The new rule may encourage its use as even if a party is not successful, the consequences are not as severe as in the past.
Facebook in the News

Facebook in the News

Earlier this week the CBC’s “The National”, with Peter Mansbridge, reported on a young woman in Montreal who has been on leave from her job for the last year and a half after she was diagnosed with major depression. The report indicated that the woman’s disability sick leave benefits were cut off because her insurance company had found photos she had posted on Facebook showing her out nights at her local bar with friends and on holiday to sun destinations.

The use of Facebook as evidence to prove or disprove a claimant’s alleged disabilities and injuries is not new. Several judges in Ontario have granted Orders requiring plaintiffs to produce their Facebook content including photos and/or videos.

In this particular instance we only know the information which was reported in the news. The CBC seemed to suggest that people should be careful about what they post on Facebook and further that it might have been inappropriate for the insurer to use the photos and information the claimant posted on her Facebook pages against her.

The other side of the story, however, is that an insurance company has the right not to make payments to someone who does not qualify for them. This woman was claiming she could no longer work because of major depression and was asking her disability insurer to pay replacement income benefits so she did not have to work.

Disability insurance policies are designed to protect individuals from a loss of income in the event of serious illness or injury. The insurance company has a right and obligation to the shareholders of the insurance company to ensure it is not making payments to fraudulent claimants. I have no idea if the woman in the CBC news story is a legitimate claimant or a fraudster but I do know that there are some fraudulent claimants in society who will allege illness or injury so they can receive compensation and not have to go back to work.

It seems to me that if a person is suffering a mental or psychological disability such that they cannot even work then it seems to make sense that they should be so disabled that they could not go out partying at their local bar or taking sun destination vacations. Isn't that common sense?

I am not an expert in psychology and such an expert would have to say whether this makes sense or not in regard to this particular woman.

No one is suggesting that an injured or disabled person should not be entitled to their long term disability insurance benefits. But a person has to be disabled. It is not enough that a person is a little depressed and does not want to go to work anymore.

If individuals are willing to post photos and videos of themselves on Facebook, shouldn’t insurance companies be able to access that information to weed out fraudulent claims? The result will be reduced premiums for the rest of us.

Changes to the Rules of Civil Procedure - Part 4

Changes to the Rules of Civil Procedure - Part 4

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 4 of our review of the amendments.

A new rule has been introduced which limits the time for discovery to seven hours total, regardless of the number of parties to be examined. Parties may extend the time for discovery by consent, or if there is a dispute, a court may grant leave on a motion. There are both positives and negatives to this new rule. It may encourage counsel to be prepared for discovery and succinct in their questioning, and in many cases it is possible to complete discovery in only one day. There are some cases, however, where due to the number of parties or documents, or the complexity of the case it is not possible to complete discovery in only one day. The hope is that counsel will cooperate in such situations. Unfortunately there may be an increase in motions where disputes arise over this issue. I would not expect judges to look favourably upon having to adjudicate such procedural disputes and it may be that after a few initial decisions, counsel take a more practical approach.

Our previous post discussed r. 29.1, which requires parties to agree on a discovery plan. Where the length of discovery is likely to be an issue, it is a good idea to deal with this issue at that point to avoid later disagreements.
Changes to the Rules of Civil Procedure - Part 3

Changes to the Rules of Civil Procedure - Part 3

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 3 of our review of the amendments.

In our last post we discussed r. 29.2, which introduces a proportionality component into discovery. The rules have also been amended to change the test for disclosing documents. The current test is that parties are required to disclose all documents “relating to any matter in issue”. The case law has developed to define this test as anything having a “semblance of relevance” must be disclosed.

The amendment to r. 30 changes the wording: parties must now disclose documents “relevant to any matter in issue”. Until courts have weighed in on what exactly the change from “relating” to “relevant” means, there is some uncertainty. It seems that a relevance test is narrower than the “relating” test, but perhaps the aim is to merely codify the existing “semblance of relevance” test.
Supreme Court Dismisses Malicious Prosecution Action Against Crown Attorney

Supreme Court Dismisses Malicious Prosecution Action Against Crown Attorney

In our practices we often represent municipalities and the Crown in civil litigation. Litigation against police forces and prosecutors seems to be increasing, including actions alleging malicious prosecution. The Supreme Court recently released a case on malicious prosecution which is of interest to those defending Crown Attorneys in such actions. The results are good news for Crown Attorneys. The Supreme Court seems to be attempting to strike a balance between allowing Crown Attorneys to perform their jobs on one hand, and preventing abuse of the system on the other.

In Miazga v. Kvello Estate, 2009 SCC 51, the plaintiffs were accused of sexually assaulting children in their care. The allegations were sensational, including ritualistic abuse and as many as twelve different adults involved. The charges were resolved in the plaintiffs’ favour when Crown Attorney Miazga entered a stay of proceedings prior to trial. The children subsequently recanted their allegations.

The Supreme Court reaffirmed the four requirements for a malicious prosecution action. The plaintiff must show the proceeding was:

1) initiated by the defendant;
2) terminated in favour of the plaintiff;
3) undertaken without reasonable and probable cause; and
4) motivated by malice or a primary purpose other than carrying the law into effect.

Justice Charron affirmed that decisions made by Crown Attorneys pursuant to their prosecutorial discretion are generally immune from judicial review. It is only when a Crown steps out of his or her role as a “minister of justice” that immunity is lost.

Although prosecutorial immunity is not absolute, there is a high standard in order to succeed in a malicious prosecution action against a Crown Attorney. In order to meet the malice requirement, more than recklessness, poor judgment or even gross negligence is required; it must be an abuse of prosecutorial power or a fraud on the process of criminal justice.

The Court dismissed the action as the plaintiffs had not proven the required elements.
Insurance Adjuster's Documents and Litigation Privilege

Insurance Adjuster's Documents and Litigation Privilege

Insurance defence counsel routinely put most, if not all, documents created by an insurer in its investigation of a claim in to schedule B of the insurer’s Affidavit of Documents. Defence counsel take the position often that these documents are subject to litigation privilege. Plaintiff’s counsel do not often object, but increasingly are requesting copies of these documents.

A recent motion heard by Justice Ferguson of the Ontario Superior Court of Justice addressed this issue in Kavanagh v. Peel Mutual Insurance, [2009] O. J. No. 4349. Justice Ferguson helpfully reviewed the applicable law of litigation privilege. The seminal case in this area of the law is the Supreme Court of Canada decision in Blank v. Canada in which the dominant purpose test was adopted. Subsequently, judges of the Ontario Superior Court of Justice have applied a two step approach for the assertion of litigation privilege:

1) Whether litigation was a reasonable prospect at the time the document was produced, and
2) If so, whether the dominant purpose for the creation of the documents in question was to assist in a contemplated litigation.

Further, Justice Ferguson summarized the law from earlier court decisions and indicated that litigation privilege cannot be founded on a suspicion of the possibility of litigation. Justice Ferguson went on to consider whether disclosure of documents may be granted if a plaintiff can show actionable misconduct prima facie and concluded, applying the judgment in Blank v. Canada, that it is possible but that the plaintiff must put evidence before the court of such actionable misconduct.

When investigating claims, insurers need to be aware that whatever they put in to their file may be ordered to be produced to the opposing party in later litigation. Their investigation file is not automatically protected by privilege unless litigation was a reasonable prospect at the time the document was produced and if the dominant purpose for the creation of the document was to assist in the contemplated litigation. Of course once legal counsel is retained on a file, the documents created for communication with legal counsel will be protected by solicitor-client privilege which is arguably a higher or stronger type of privilege.
Changes to the Rules of Civil Procedure - Part 2

Changes to the Rules of Civil Procedure - Part 2

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 2 of our review of the amendments.

In our last post we discussed the introduction of the discovery plan. In addition to aiming to increase efficiency in the discovery process, the new rules emphasize proportionality. Rule 29.2 is a new rule which introduces proportionality into discovery. In making production orders, a court will analyze a number of factors, such as whether answering a question or producing a document would:

1) require an unreasonable amount of time;
2) create an unjustified expense;
3) would cause undue prejudice;
4) would unduly interfere with the orderly progress of an action;
5) result in an excessive volume of documents; and
6) whether the document is available from another source.

These criteria could be problematic. It seems to me that these factors create room to argue that relevant documents need not be produced; for example, does this allow a plaintiff with a lengthy pre-accident history to argue the records do not have to be produced because there is an “excessive” amount of them? There will be disputes and hopefully judges will apply a common sense application to r. 29.2.

Ontario Government Proposes New Auto Insurance Options

Ontario Government Proposes New Auto Insurance Options

According to The Globe and Mail, the Ontario government is proposing to allow consumers to purchase less auto insurance coverage in order to keep down their auto insurance premiums.

Proposed changes include:

- lower the minimum medical and rehabilitation coverage for auto insurance to $50,000 from the current $100,000;
- adding a new deductible for property damage; and
- removing an insurer's right to an assessment from their own doctor if they disagree with the findings of the insurance company's health provider.
Sidewalk Non-Repair

Sidewalk Non-Repair

A recent decision of Justice Matheson of the Ontario Superior Court of Justice in Hamilton found that a depression in a sidewalk of 5/8 of an inch does not constitute a state of non-repair, Anderson v. Hamilton, [2009] O.J. No. 4358.

The plaintiff had tripped over a small depression in the sidewalk and fell, breaking her wrist. The court confirmed that each case of non-repair of sidewalks is governed by its own factual basis and the affirmed the traditional formulations that a Municipality is "not an insurer" of anyone walking on its streets and that a Municipality does not have to keep its sidewalk as "smooth as a billiard table".

Further, the court held that the City of Hamilton did have a regular inspection routine for its sidewalks. The City inspects its sidewalks in Hamilton once a year. The court held that this was more inspection than some courts had called for, noting that in some cases inspections every three years have been acceptable. The City of Hamilton therefore was held to have satisfied the duty placed on it by having regular inspections.
Tara Pollitt

Tara Pollitt

For the one or two people out there who regularly follow this blog (thanks Mom), you may have noticed that there have been new contributions made in the last month by Tara Pollitt. There is also a new photo on the main page - the white haired guy is me, in case you couldn't guess.

So, this is to officially announce that Ms. Pollitt is now a co-editor/writer. Tara grew up in Owen Sound. She received an undergraduate degree at the University of Waterloo and a law degree from the University of Western Ontario. Suffice to say, she is smarter than me. Tara practiced law initially on the plaintiff side for several years at a well-known plaintiff's law firm before switching over to practice law exclusively for insurance clients. We at McCall Dawson are glad she made the change. So are her clients.

I am very happy to have Tara join me on this blog. We hope you enjoy our regular legal updates in the weeks and months to come. We are always happy to have your comments.
Changes to the Rules of Civil Procedure - Part 1

Changes to the Rules of Civil Procedure - Part 1

Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 1 of our review of the amendments.

A brand new rule has been created which introduces a “discovery plan”. This is a document created by the parties which will set out things such as the scope of discovery, timelines for service of Affidavits of Documents and names of persons to be examined. There is no prescribed form for the discovery plan, so precedents will have to be developed. This rule presumes a level of cooperation between counsel which may or may not exist. The aim of the rule is to make the process of documentary and oral discovery more streamlined and efficient; however, it could result in a new area of dispute between parties. It could be especially difficult in cases involving self-represented litigants to come to agreement on the elements of the discovery plan. If there is no discovery plan, a judge on a motion can refuse to grant the relief sought; for example, on an undertakings motion, the court could refuse to order the undertakings be complied with if there is no discovery plan. It would seem prudent to “paper the file” if counsel is unable to come to an agreement on the discovery plan, so that at least there is proof that an attempt at complying with the rule was made.

Although the discovery plan aims to make discovery more efficient, it is possible that it increases cost, at least in the short term, as counsel develop a standard practice for the discovery plan.
OPCF 44: McGrath v. Arshad, [2008] O.J. No. 5771 (S.C.J.)

OPCF 44: McGrath v. Arshad, [2008] O.J. No. 5771 (S.C.J.)

This decision clarifies the underinsured provisions of the OPCF 44. The at fault driver, Arshad, had $200,000 in liability insurance. There were multiple plaintiffs, whose claims exceeded $200,000 and would therefore share pro rata. One of the plaintiffs, McGrath, had purchased $2,000,000 in extra insurance but his pro rata share was only $20,000. His insurer took the position that its obligation to pay started at $200,000. The court disagreed and held that the insurer was obligated to make up any shortfall between the actual amount the claimant received from the underinsured driver ($20,000) and his damages up to the OPCF limits ($1,800,000).
Distracted Driving Legislation Comes into Effect October 26, 2009

Distracted Driving Legislation Comes into Effect October 26, 2009

Bill 118, which amends the Highway Traffic Act to prohibit the use of handheld electronic devices while driving, comes into effect October 26, 2009.

Some highlights of the new legislation:
  • drivers cannot use handheld devices while driving. This includes cell phones as well as handheld entertainment devices such as iPods, Gameboys and so forth;
  • drivers may use devices such as cell phones in hands-free mode;
  • drivers cannot view display screens on devices unrelated to driving, such as DVDs or laptops. This does not include GPS systems;
  • the use of such devices while off the roadway, not in motion and not impeding traffic is permitted;
  • calls to 911 are exempted.

Fines for contravening these provisions range from $60 to $500. Police can also charge drivers with careless driving which has more serious penalties, including imprisonment.

Facebook in Litigation - 2

Facebook in Litigation - 2

This is part two of Tara Pollitt's article on Facebook in Ontario litigation.

The Murphy case was followed in Leduc v. Roman,[1] an appeal of a Master’s decision. Justice Brown held that a party who maintains a private Facebook account stands in no different position than one who maintains a publicly accessible profile and to permit a party to hide behind privacy controls on a website designed to share social information is to deprive the other party of material relevant to ensuring a fair trial. In Leduc the defendant had obtained an initial order requiring the plaintiff to preserve the website prior to the balance of the motion being heard. This approach is useful to prevent information from being changed or deleted before the motion can be heard.

Facebook was used recently in a trial decision out of Newfoundland called Terry v. Mullowney.[2] The plaintiff was cross-examined at trial using printouts from his publicly accessible Facebook account. The Court explicitly noted that the material from Facebook showed the plaintiff had a full and active social life and without that evidence he would have been left with a very different view of the plaintiff’s social life. The information was a critical factor in reducing the claim from approximately $1.3 million to $40,000.

[1] [2009] O.J. No. 681 (S.C.J.).
[2] 2009 NLTD 56 (Canlii).
Court of Appeal: Injured Insureds Do Not Need to Sue Insured Joint Tortfeasors to Claim Uninsured Motorist Coverage

Court of Appeal: Injured Insureds Do Not Need to Sue Insured Joint Tortfeasors to Claim Uninsured Motorist Coverage

In a somewhat surprising decision, the Court of Appeal for Ontario has held that an insured motorist does not have to sue insured joint tortfeasors in order to collect on the uninsured coverage in her own automobile insurance policy. Also the insurer does not appear to have a right of subrogation against the joint tortfeasors but only against the uninsured motorist.

This decision is properly understood as providing reasonable coverage for an insured from her insurer. It is a first party claim, not third party claim. The insured purchased coverage for this very type of situation from her insurer. The insurer picked a bad set of facts in this case and should have waited for a better case to pursue this issue - namely, where the joint tortfeasor was at least 25% liable. In this instance it is not even certain that the joint tortfeasor was 1% liable.

The decision is Loftus v. Security National, 2009 ONCA 618 (decision released Aug 21, 2009). Click here for a copy of the decision.

The plaintiff was injured after being hit by an uninsured motorist. The uninsured motorist was being chased by the police when he entered an intersection, lost control and struck the plaintiff.
The plaintiff sued the uninsured motorist and her own insurer, Security National, under the uninsured coverage of her policy. The uninsured motorist did not defend.

At first instance, on a Rule 22 motion, MacDougall J. found that Security National was liable to pay the plaintiff under the uninsured provisions of the policy, even though she had not commenced an action against the police/joint tortfeasors and even if the police/joint tortfeasors are assumed to be negligent.

The Court of Appeal for Ontario reviewed the relevant wording of the Uninsured Automobile Coverage Schedule ("the Schedule") contained in R.R.O. 1990, Reg. 676:

2. (1) The insurer shall not be liable to make any payment,

(b) where a person insured under the contract is entitled to recover money under any valid policy of insurance other than money payable on death, except for the difference between such entitlement and the relevant minimum limits determined under clause (a);

(c) where the person insured under the contract is entitled to recover money under the third party liability section of a motor vehicle liability policy;

The Court of Appeal then held that the key phrase herein is "entitled to recover money". The question then is whether the plaintiff is "entitled to recover money". If yes, then she cannot recover under the uninsured provisions of her own policy.

The Court of Appeal answered the question by finding that the phrase "entitled to recover" as it appears in ss. 2(1)(b) and (c) of the Schedule means entitled to recover "in fact" as opposed to entitled to recover "in law" and that an "injured insured is entitled to recover in fact only where a potential joint tortfeasor’s insurer admits liability to pay or where the injured insured obtains judgment against the insured joint tortfeasor."

The Court of Appeal went on to say that:

"We see no indication in the language of s. 265 of the Insurance Act or of the Schedule that it was the intention of the legislature to require victims of uninsured drivers to engage in potentially speculative and costly litigation against potential joint tortfeasors who may be insured rather than relying on the coverage paid for in their own policies of insurance."

The Court of Appeal also rejected submissions by Security National that this finding would result in double recovery by the insured. The Court of Appeal held that "recovery under the uninsured coverage is an alternative" and that obtaining judgment against her own insurer signifies an election not to subsequently pursue a claim against the joint tortfeasors.

The Courts in this instance simply did not want to find liability against the police for what was clearly the fault of the uninsured motorist and nor did the Courts want to punish the insured for refusing to pursue litigation against the police. The insured purchased auto insurance from the insurer for this very situation.
Facebook in Litigation - 1

Facebook in Litigation - 1

CNN recently reported that Facebook now is nearly as large as the population of the United States. There are about 307 million people living the U.S. and Facebook now says it has 300 million users.

Not surprisingly Facebook has now been used in litigation in Ontario. Here is an article by my colleague Tara Pollitt in which plaintiffs have had their credibility checked against their own Facebook webpages.

THE USE OF FACEBOOK IN LITIGATION by Tara Pollitt

Facebook, a social networking website, allows users to share content with other users such as photographs, videos, and by posting messages. A variety of privacy settings are possible, ranging from making one’s site completely open to everyone to restricting access to one’s “friends” – people who are chosen by the user and are permitted to view the user’s information and share their own information. Facebook has quickly become a resource in investigating claims and courts have overwhelmingly approved of its content as being relevant to issues in litigation.

The first reported decision regarding the use of Facebook at trial is Kourtesis v. Jouris[1]. The plaintiff testified that she had little social life post-accident. Photographs the defendant obtained from her publicly accessible Facebook account showed otherwise. In contrast to the evidence the plaintiff and her brother gave about a family trip to Greece where she sat at a café rather than participating in a festival, photographs from Facebook showed her celebrating on her brother’s shoulders. In the trial decision, Justice Browne referred to these photographs in concluding that the plaintiff had an active social life that was not diminished by her injuries. He dismissed the plaintiff’s claim for general damages.

The first reported motion regarding Facebook is Murphy v. Perger.[2] The defendant gained access to a publicly accessible site called the “Jill Murphy Fan Club” and discovered that there was also a private site created by the plaintiff’s sister but over which the plaintiff had control. She had granted access to her webpage to 366 “friends”. Justice Rady allowed the defendant’s motion to obtain production of material on the site, including photographs, holding that the information on the site was relevant as a useful means of assessing the plaintiff’s damages. She rejected the submission that the motion was merely a fishing expedition. She also rejected the argument that the information was a violation of the plaintiff’s right to privacy; the plaintiff could not have had a serious expectation of privacy given that 366 people had already been granted access to the site.
[1] [2007] O.J. No. 2677 (S.C.J.).
[2] [2007] O.J. No. 5511 (S.C.J.).
Competing Duties: Duty of an Insured to Disclose Material Changes v. Duty of an Insurer to do Due Diligence

Competing Duties: Duty of an Insured to Disclose Material Changes v. Duty of an Insurer to do Due Diligence

The duty to disclose a material change in risk in an automobile insurance policy was recently considered by Howden J. in the case DeKoning v. Vector Insurance, [2009] O.J. No. 3461 (S.C.J.).

The Court had to balance competing duties. An insured has a duty to disclose material changes to the policy. An insurer has a duty of due diligence to obtain publicly or readily available information.

An insured under an automobile liability policy failed to report her knowledge to her auto insurance company of the driving record of her dependent teenager who was listed on the policy as an occasional driver.

The insurer took the position that represented a breach of a statutory condition of the policy and permits the insurer to treat the policy as void ab initio and unenforceable.

In this instance, the guardian had added the 16 year old as an occasional driver to her policy by telephone through her broker. The insurer obtained the driving record of the teen showing that his record was clear. Nearly a year later, the son had his license suspended by reason of demerit point accumulation. He had several traffic convictions, including speeding. The guardian assisted the teen in ensuring that all fines were properly paid. The teen did not drive the insured motor vehicle until his suspension ended.

Neither the guardian nor the teen reported to the insurer the fact that his license had been suspended. They subsequently claimed that they did not know of a duty to do so.

The insurer never obtained a subsequent driving record which it could have done for a fee of $12.00.

A few months later, the son was driving with three passengers when a serious accident occurred resulting in one of his passengers suffering catastrophic injuries.

The catastrophically injured passenger obtained a judgment for over $18 million dollars. The insurer made itself a statutory third party throughout those proceedings and took the position that the policy was void ab initio. The limit for third party claims on the insurer was $1 million.

The mother and son brought an action against the broker and insurer, claiming that the policy of insurance is binding and enforceable and seeking a declaration that the insurer was obligated to provide them with a defence in the passenger action. They also claimed indemnity from the insurer for all damages and costs assessed against them in the passenger action.

The Court considered the duty of good faith on insureds to disclose material changes in risk to insurers. The Court noted that Statutory Condition #1 requires an insured to notify the insurer or agent (broker) of any change in the risk material to the contract. The Court reviewed case law which imposes an obligation on an insured to disclose material facts, and then noted that in this instance, only the insurer knew that a couple of traffic tickets and a license suspension were material. Further, the insurer was aware that the additional insured was a novice driver when it added him to coverage and the insurer did not take any additional steps to update its records with respect to his driving record.

The Court held that the guardian as the named insured did not fail in her duty to disclose a material change in the risk since it was not clear in the policy that the driving tickets and suspension were material changes.

The insurer had a duty of due diligence to obtain a further driving record. Therefore, the insurer had no ground in law to void the policy and was obligated to indemnify its insureds.
Walking into a parked auto is not being "struck" or "hit" by it

Walking into a parked auto is not being "struck" or "hit" by it

In Lewis v. Economical Insurance Group, [2009] O.J. No. 2853 (S.C.J.), Eberhard J. held that there is no coverage for walking into a parked car under the uninsured provisions of the Standard Automobile Policy (s. 265 Insurance Act) or under the Family Protection endorsement (OPCF 44R).

It seems to make sense.

The plaintiff suffered injuries when she struck her head on a steel pole that was protruding from a vehicle.

The defendant insurer brought a motion for summary judgment on the basis that (i) the plaintiff had failed to establish an unidentified vehicle had been involved or could not have been ascertained and (ii) that there is no coverage in any event under the uninsured provisions policy or under OPCF 44R. The insurer won the motion on the latter issue.

The wording of the OPCF 44R endorsement is that the plaintiff is only covered if the plaintiff is not "an occupant of an automobile who is struck by an automobile".

The wording of the policy is that the plaintiff is only covered "when not in an automobile ... if hit by an unidentified or uninsured automobile" (policy).

The Court held that the meaning of hit or struck is not ambiguous: the automobile did not hit or strike the plaintiff pedestrian. The pedestrian walked into the automobile.

Here are paragraphs 9 and 10 of the Court's endorsement:

"This is quite unlike the circumstance of being hit/struck by something hit by an automobile or falling out of a moving vehicle as it is the movement of the vehicle that applies the force that gives rise to the hit/strike."

"It is also unlike the interpretation of "hit/struck" where a moving automobile created a peril which caused the insured to take evasive action which resulted in his injury. There, the visual impact of the automobile caused the injury. In the present case the Plaintiff did not see the pole and walked into it. Nothing about the automobile impacted upon the situation."
Liquor Liability - 6

Liquor Liability - 6

Here are a couple more comments on the standard of care of a tavern/bar to monitor alcohol consumption of its patrons:

"I recognize that it is not often possible for an establishment to assess whether a patron is intoxicated and, in many cases where there is not heavy consumption of alcohol in the establishment nor symptoms of intoxication, it would be unreasonable to expect an establishment to make that determination. On the other hand, service to a patron of the equivalent of between 16 1/4 and 19 1/2 fluid ounces of rye for his own consumption over a two-hour period carries obvious risks, and I am of the opinion that organization of service of alcoholic beverages, in the circumstances of this case, in a fashion which eliminated the opportunity to monitor the plaintiff's consumption constituted contributory negligence on the part of the hotel to the extent of five percent. Hotels are in the business of serving alcohol for a profit and it is not unreasonable for it to bear a portion of the risk caused by gross over-consumption." Goudge v. Three Top Investment Holdings Inc., [1994] O.J. No. 751 (Gen. Div.) at para. 52.

And here is comment from another case:

"I feel that they are liable both under the Liquor License Act and at common law. There is a high standard of care imposed on a tavern and its staff. The Squire Tavern people were oblivious to their duty. They knew these people were driving. They knew or should have known that they were intoxicated. They added to the level of intoxication by serving them more. I think that the standard maintained by the Squire was too low. Drinks would only be refused if the person was "too loud, starting arguments, knocking over drinks or falling down". Sambell v. Hudago Enterprises Ltd., [1990] O.J. No. 2494 (Gen. Div.).
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Judicial Review of Municipal By-Laws: Courts are not to interfere based on reasonableness

Judicial Review of Municipal By-Laws: Courts are not to interfere based on reasonableness

In a recent decision, Marsh v. Chatham-Kent, [2009] O.J. No. 3314, Leitch J. reviewed the law on the jurisdiction and scope of judicial review of municipal by-laws.

The application was for an order declaring a by-law invalid on procedural irregularities or alternatively void on the basis that its provisions are discriminating, arbitrary, unfair, vague and uncertain.

Leitch J. dismissed the application.

The case arose after a rural Ontario municipal counsel, after some deliberation and input, decided to proceed with installing a new sewage system. The application against the by-law was perhaps not surprising given that participation was made mandatory and for most owners the tax bill is $15,500.

Leitch J. reviewed section 273(1) of the Municipal Act, 2001, which sets forth the jurisdiction of the court on this application by providing as follows: Upon the application of any person, the Superior Court of Justice may quash a by-law of a municipality in whole or in part for illegality. However, it is important to note that the reasonableness of the By-law cannot be the issue before the court. Section 272 of the Municipal Act provides as follows: A by-law passed in good faith under any Act shall not be quashed or open to review in whole or in part by any court because of the unreasonableness or supposed unreasonableness of the by-law.

Leitch J. cited the Supreme Court of Canada in Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342 at para. 36, quoting McLachlin J., as she then was, in Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231: Recent commentary suggests an emerging consensus that courts must respect the responsibility of elected municipal bodies to serve the people who elected them and exercise caution to avoid substituting their views of what is best for the citizens for those of municipal councils. Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold. In cases where powers are not expressly conferred but may be implied, courts must be prepared to adopt the "benevolent construction" ... Whatever rules of construction are applied, they must not be used to usurp the legitimate role of municipal bodies as community representatives. [Emphasis added]
Liquor Liability - 5

Liquor Liability - 5

Establishments that serve alcohol have a positive duty to intervene to limit alcohol consumption or risk liability.

Here is the classic formulation:

"I agree that establishments which serve alcohol must either intervene in appropriate circumstances or risk liability, and that this liability cannot be avoided where the establishment has intentionally structured the environment in such a way as to make it impossible to know whether intervention is necessary. Such was the situation in Canada Trust Co. v. Porter where the alcohol was served from behind a bar and it was impossible for the establishment either to monitor the amount consumed or to determine whether intervention was necessary. A similar situation arose in Gouge v. Three Top Investment Holdings Inc., [1994] O.J. No. 751 (Ont. Ct. (Gen. Div.), where the plaintiff attended a company Christmas party which had a "cash bar", over-indulged, and then was involved in an accident. In such circumstances, it would not be open to the establishment to claim that they could not foresee the risk created when the inability to foresee the risk was the direct result of the way the serving environment was structured."

Stewart v. Pettie, [1995] 1 S.C.R. 131 at para. 56.
Liquor Liability - 4

Liquor Liability - 4

More on liability for alcohol providers. This blog contribution authored by Tara Pollitt.

An alcohol provider owes a duty of care to patrons and may be required to prevent an intoxicated patron from driving where it is apparent he intends to drive. The Supreme Court held that the duty of care that is owed to patrons is also owed to third parties:

It is a logical step to move from finding that a duty of care is owed to patrons of the bar to finding that a duty is also owed to third parties who might reasonably be expected to come into contact with the patron, and to whom the patron may pose some risk. It is clear that a bar owes a duty of care to patrons, and as a result, may be required to prevent an intoxicated patron from driving where it is apparent that he intends to drive. Equally such a duty is owed, in that situation, to third parties who may be using the highways. In fact, it is the same problem which creates the risk to the third parties as creates the risk to the patron. If the patron drives while intoxicated and is involved in an accident, it is only chance which results in the patron being injured rather than a third party. The risk to third parties from the patron's intoxicated driving is real and foreseeable. Stewart v. Pettie, [1995] 1 S.C.R. 131 at para. 28.


Commercial providers of alcohol are expected to monitor consumption of alcohol as part of the commercial transaction and are expected to possess special knowledge of intoxication. The Supreme Court has held that not only is that expected, but also relatively easy for the commercial host:

First, commercial hosts enjoy an important advantage over social hosts in their capacity to monitor alcohol consumption. As a result, not only is monitoring relatively easy for a commercial host, but it is also expected by the host, patrons and members of the public. In fact, commercial hosts have a special incentive to monitor consumption because they are being paid for service. Patrons expect that the number of drinks they consume will be monitored, if only to ensure that they are asked to pay for them. Furthermore, regulators can require that servers undertake training to ensure that they understand the risks of over-service and the signs of intoxication (see, e.g., R.R.O. 1990, Reg. 719). This means that not only is monitoring inherently part of the commercial transaction, but that servers can generally be expected to possess special knowledge about intoxication. Childs v. Desmoreaux, [2006] 1 S.C.R. 643 at para. 18.

Liability for servers of alcohol has been expanded to include establishments that serve patrons already inebriated on arrival. In Schmidt v. Sharpe, the tavern was held liable even though it did not have actual knowledge of the patrons’ intoxication. Schmidt v. Sharpe, [1983] O.J. No. 418 (Ont. H.C.)

The appropriate standard by which to assess providers of alcohol is the Smart Serve Program, or its predecessor, the Server Intervention Program (“SIP”). SIP requires the following actions of servers of alcohol: “Stop trouble at the door”, “Interview and assess”, and “Provide low risk options”. SIP provides reasonable and prudent steps to be taken by alcohol providers:
· stop trouble at the door;
· check for underage patrons;
· interview and assess for prior drinking;
· provide low risk options, serve and monitor service;
· check for driving; and
· arrange for safe transportation.
Liquour Liability - 3

Liquour Liability - 3

Further to my past post on the liability that can be imposed on taverns (bars, restaurants, etc.), he is the relevant statute and regulations.

The Liquor Licence Act, R.S.O. 1990, c. L.19, states:

29. No person shall sell or supply liquor or permit liquor to be sold or supplied to any person who is or appears to be intoxicated.

39. The following rules apply if a person or an agent or employee of a person sells liquor to or for a person whose condition is such that the consumption of liquor would apparently intoxicate the person or increase the person’s intoxication so that he or she would be in danger of causing injury to himself or herself or injury or damage to another person or the property of another person:
1. If the person to or for whom the liquor is sold commits suicide or meets death by accident while so intoxicated, an action under Part V of the Family Law Act lies against the person who or whose employee or agent sold the liquor.
2. If the person to or for whom the liquor is sold causes injury or damage to another person or the property of another person while so intoxicated, the other person is entitled to recover an amount as compensation for the injury or damage from the person who or whose employee or agent sold the liquor.

The regulations under this statute include:

A licence holder must not engage in or permit practices which may tend to encourage patrons’ immoderate alcohol consumption.

A licence holder must inspect an item of identification before serving liquor to a person apparently under the age of nineteen years.

A licence holder must not permit drunkenness, or riotous, quarrelsome, violent or disorderly conduct to occur on the licenced premises or in the adjacent washrooms, liquor and food preparation areas and storage areas.
Worker's Compensation - 4

Worker's Compensation - 4

An issue which has arisen in previous years is whether the Tribunal has jurisdiction to determine a section 31 application where the worker has received statutory accident benefits (SABs) under the Insurance Act but no court action has been commenced. While early cases found there was no jurisdiction, two decisions in 2007 considered more extensive submissions and found that the Tribunal has jurisdiction. Decision No. 1288/08, 2008 ONWSIAT 2572, agreed with the more recent cases that the Tribunal has jurisdiction to consider a SABs insurer’s section 31 application. Decision No. 1288/08 applied the reasoning in Decision No. 14/06, 2007 ONWSIAT 339, 81 W.S.I.A.T.R. (online), in finding that the insurer had standing to bring an application under section 31(1)(a). The phrase in section 31(1)(a) “right to commence an action”, includes situations in which the right has been conferred but has not been acted upon or triggered. (from WSIAT news website)
Worker's Compensation - 3

Worker's Compensation - 3

The WSIA and earlier Workers’ Compensation Acts are based on the “historic trade-off” in which workers gave up the right to sue in exchange for statutory no-fault benefits. The Tribunal has the exclusive jurisdiction to decide whether a worker’s right to sue has been removed by the Act. Right to sue applications may raise complicated legal issues, such as the interaction between the WSIA and other statutory schemes.


Decision No. 2126/07, 2007 ONWSIAT 2689, 84 W.S.I.A.T.R. (online), illustrates the type of disputes which the Tribunal may be called on to resolve under section 31 of the WSIA. While receiving treatment in hospital for a compensable condition, a worker fainted and sustained injuries to different parts of his body. Tribunal decisions have generally found that, where further injury results from negligent medical treatment, the additional injury is generally foreseeable; the worker is entitled to compensation and the right of action is removed. Decision No. 2126/07 held that the arguments that the new areas of injury were remote from the original injury and that the hospital was negligent in failing to warn the worker and supervise him following treatment, did not distinguish the case from prior Tribunal cases. (from WSIAT news website)

Liquor Liability - 2

Liquor Liability - 2

In Childs v. Desmoreaux, [2006] 1 S.C.R. 643 at para. 19-20, McLachlin C.J. noted that the strict regulation of the sale and consumption of alcohol by the government imposes special responsibilities on those who profit from its sale and duties to reduce the risk associated with its sale:

"Second, the sale and consumption of alcohol is strictly regulated by legislatures, and the rules applying to commercial establishments suggest that they operate in a very different context than private-party hosts. This regulation is driven by public expectations and attitudes towards intoxicants, but also serves, in turn, to shape those expectations and attitudes. In Ontario, where these facts occurred, the production, sale and use of alcohol is regulated principally by the regimes established by the Liquor Control Act, R.S.O. 1990, c. L.18, and the Liquor Licence Act, R.S.O. 1990, c. L.19. The latter Act is wide-ranging and regulates how, where, by and to whom alcohol can be sold or supplied, where and by whom it can be consumed and where intoxication is permitted and where it is not.

These regulations impose special responsibilities on those who would profit from the supply of alcohol. This is clear by the very existence of a licensing scheme, but also by special rules governing the service of alcohol and, as noted above, special training that may be required. Clearly, the sale of alcohol to the general public is understood as including attendant responsibilities to reduce the risk associated with that trade."

McLachlin C.J. emphasized the expectations of the public and the means that commercial hosts have to meet those expectations through monitoring of alcohol consumption:

"…The public expects that in addition to adherence to regulatory standards, those who sell alcohol to the general public take additional steps to reduce the associated risks. Furthermore, patrons are aware that these special responsibilities have very real and visible manifestations. The imposition of a "cut-off" at the bar is understood, and expected, as part of the institutionalization of these responsibilities. Similarly, in many establishments, "bouncers" both enforce admission and assist other members of the staff who might have to deal with patrons who may have become intoxicated. These features have no equivalent in the non-commercial context. A party host has neither an institutionalized method of monitoring alcohol consumption and enforcing limits, nor a set of expectations that would permit him or her to easily do so."

Commercial hosts have an incentive to over-serve: it is more profitable than encouraging responsible consumption. The costs of over-consumption are borne by drinkers, taxpayers and third parties, while tavern keepers enjoy large profits:

"Third, the contractual nature of the relationship between a tavern keeper serving alcohol and a patron consuming it is fundamentally different from the range of different social relationships that can characterize private parties in the non-commercial context. The appellants argue that there is "nothing inherently special" about profit making in the law of negligence. In the case of alcohol sales, however, it is clear that profit making is relevant. Unlike the host of a private party, commercial alcohol servers have an incentive not only to serve many drinks, but to serve too many. Over-consumption is more profitable than responsible consumption. The costs of over-consumption are borne by the drinker him or herself, taxpayers who collectively pay for the added strain on related public services and, sometimes tragically, third parties who may come into contact with intoxicated patrons on the roads. Yet the benefits of over-consumption go to the tavern keeper alone, who enjoys large profit margins from customers whose judgment becomes more impaired the more they consume. This perverse incentive supports the imposition of a duty to monitor alcohol consumption in the interests of the general public."
Liquor Liability - 1

Liquor Liability - 1

Commercial establishments serving alcohol to patrons have duties under statute and common law to patrons and third parties who may be injured by intoxicated patrons. The duty is to take positive steps to prevent patrons from becoming impaired. Alcohol providers may be liable even though the patron was intoxicated upon arriving at the establishment and despite the patron not showing obvious signs of intoxication. It is the provider’s responsibility to ensure an appropriate system of service and ongoing monitoring is in place to prevent injuries as a result of intoxication. The Liquor Licence Act prohibits service of alcohol to one who is or appears to be intoxicated. The Court of Appeal for Ontario recently held that a plaintiff may call evidence of over-service of patrons of the hotel before, during and after the incident and is not restricted to evidence from the night of the incident giving rise to the lawsuit. Taverns may be held responsible for a portion of the plaintiff’s contributory negligence if the Plaintiff failed to take care for her own safety due to impairment which is the fault of the tavern under the Liquor Licence Act. Liability under s. 39 of the Liquor Licence Act is a statutory liability arises once the factual pre-conditions provided for therein have been found to exist.

This post contribution authored by Tara Pollitt, a lawyer in our office at McCall Dawson Osterberg Handler LLP.
Chronic Pain - Non-Pecuniary General Damages $175,000

Chronic Pain - Non-Pecuniary General Damages $175,000

Degennaro v. Oakville Trafalgar Memorial Hospital, [2009] O.J. No. 2780 (S.C.J.).

Is this the new high water mark for chronic pain?

"171 I am persuaded that the range for non-pecuniary loss for Ms. Degennaro, urged upon me by Mr. Kwinter, is appropriate. I will award Ms. Degennaro $175,000 for non-pecuniary loss.

172 It is clear that Paul Degennaro and the children have suffered a loss of guidance, care and companionship as a result of the injury to Ms. Degennaro. I will award Mr. Degennaro $65,000 for his claim under the Family Law Act. I will award each child $25,000."

It will be interesting to see if this decision gets appealed or stands.

Definition of Chronic Pain from the Supreme Court of Canada

Definition of Chronic Pain from the Supreme Court of Canada

This is not a new decision but worth re-reading.

"Chronic pain syndrome and related medical conditions have emerged in recent years as one of the most difficult problems facing Workers' Compensation schemes in Canada and around the world. There is no authoritative definition of chronic pain. It is, however, generally considered to be pain that persists beyond the normal healing time for the underlying injury or is disproportionate to such injury, and whose existence is not supported by objective findings at the site of the injury under current medical techniques. Despite this lack of objective findings, there is no doubt that chronic pain patients are suffering and in distress, and that the disability they experience is real. While there is at this time no clear explanation for chronic pain, recent work on the nervous system suggests that it may result from pathological changes in the nervous mechanisms that result in pain continuing and non-painful stimuli being perceived as painful. These changes, it is believed, may be precipitated by peripheral events, such as an accident, but may persist well beyond the normal recovery time for the precipitating event. Despite this reality, since chronic pain sufferers are impaired by a condition that cannot be supported by objective findings, they have been subjected to persistent suspicions of malingering on the part of employers, compensation officials and even physicians." (underlining added)
Nova Scotia (Workers' Compensation Board) v. Martin, [2003] 2 S.C.R. 504 at para. 1 (Gonthier J.).
Is chronic pain a foreseeable injury? (post-Mustapha)

Is chronic pain a foreseeable injury? (post-Mustapha)

In the recent decision, Degennaro v. Oakville Trafalgar Memorial Hospital, [2009] O.J. No. 2780 (S.C.J.), the Court considered the issue of reasonable foreseeability and chronic pain in the light of the Supreme Court of Canada's comments on this issue in Mustapha, [2008] 2 S.C.R. 114.

Gray J., considering whether chronic pain is a foreseeable injury in light of Mustapha, noted that: "There is obviously a subtle distinction between a person of less than ordinary fortitude who suffers damage that is not foreseeable, and a person of ordinary fortitude who suffers damage that is more serious than expected."

In Degennaro the plaintiff developed chronic pain after an injury that resulted in a fractured sacrum. The fracture healed but her pain got worse. There was no objective reason for the continuing and worsening pain. The eventual conclusion of her treating physicians was that the plaintiff had developed fibromyalgia. Although it was in dispute at the trial, the Court concluded that the chronic pain was caused by the same fall that had resulted in a fractured sacrum.

The Court then had to consider whether the chronic pain was foreseeable. This is what Gray J. wrote at paras 158-163.

158 In Mustapha, supra, the Supreme Court of Canada analyzed the issue. In that case, the Court held that it was not reasonably foreseeable that the plaintiff would suffer serious mental injury as a result of seeing flies in a bottle of water that he was about to install for a customer.

159 At para. 14 of her judgment, McLachlin C.J.C. stated that a plaintiff is to be considered objectively, not subjectively. Thus, a plaintiff is not to be considered in the context of his or her own personal makeup, which may give rise to the specific injury suffered, but rather objectively. That is, one must ask what a person of ordinary fortitude would suffer.

160 At para. 16 of her judgment, McLachlin C.J.C., in a passage that has some significance for this case, stated:

Once a plaintiff establishes the foreseeability that a mental injury would occur in a person of ordinary fortitude, by contrast, the defendant must take the plaintiff as it finds him for purposes of damages. As stated in White, at p. 1512, focusing on the person of ordinary fortitude for the purposes of determining foreseeability, "is not to be confused with the 'eggshell skull' situation, where as a result of a breach of duty the damage inflicted proves to be more serious than expected". Rather, it is a threshold test for establishing compensability of damage at law.


161 In my view, it is foreseeable that chronic pain may result from a physical injury. While the actual cause of chronic pain is not known, it is known that some people will develop chronic pain after physical trauma. Thus, chronic pain is foreseeable as falling within a range of consequences that may flow from a physical injury. This is a foreseeable consequence in a person of ordinary fortitude. Thus, in my view, the defendants must take the plaintiff as they find her. As noted by McLachlin C.J.C. at para. 16 of Mustapha, supra, this is simply a case where the damage inflicted has proven to be more serious than expected.

162 There is obviously a subtle distinction between a person of less than ordinary fortitude who suffers damage that is not foreseeable, and a person of ordinary fortitude who suffers damage that is more serious than expected. However, in view of the analysis in Mustapha, the distinction is real and must be respected. I have no doubt that Ms. Degennaro falls into the category of a person who is a person of ordinary fortitude who has suffered damage that is more serious than expected.

163 For the foregoing reasons, the chronic pain suffered by the plaintiff, Ms. Degennaro, was a foreseeable consequence of the incident that occurred in May, 1999, and the defendants must compensate her for it.
Worker's Compensation - 2

Worker's Compensation - 2

Further to my last post, the question often is whether a worker is in the course of employment or not.

For example, if a worker is on a smoke break at work when they get injured, is this an “injury by accident, arising out of and in the course of his or her employment”? Is this employee entitled to benefits from the Worker’s Compensation fund or is the worker able to sue?

There are several decisions from the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”), going back 15 to 20 years ago, in which the Tribunal held that workers who drive around most of the day as part of their employment and who have an accident while on a coffee break, stopping for lunch or running an errand not far off their scheduled route, do not create a “distinct departure” from their employment activities. Therefore, the accident was held to fall within the parameters of Section 13 of the WSIA, 1997, “an accident arising out of and in the course of employment”. The WSIAT ruled that the tort action was barred. These are cited at WSIAT decisions 351/90, 62/94 and 669/89.

In another case found at WSIAT decision 901/95, at paragraph 44, the tribunal found that a plaintiff who slipped and fell when he was going into a donut shop was engaged in a work-related activity that was reasonably incidental to his employment. In that instance, the plaintiff was a salesman and often used the donut shop for filling out paper work because he did not have an office of his own. He also often met clients at the donut shop.

The test used by the WSIAT is whether the personal injury in a work-related activity was “reasonably incidental” to the injured person’s employment. The WSIAT, in their decision of 901/95, also stated that they were persuaded that the plaintiff was engaged in a work-related activity that was reasonably incidental to his employment on the basis that the timing, duration, and potential cancellation of each break was determined by the requirements of the plaintiff. In other words, the plaintiff, as a salesman, was self-directed and there was not a bright line to distinguish between when he was on a break or when he was working in the donut shop.

In a more recent decision, the WSIAT, at decision 285/05, affirmed the work-relatedness test when deciding that an employee’s right of action had been taken away by the WSIA, 1997 when the employee slipped and fell in a parking lot of an airport while on a business trip.

The WSIB has an Operational Policy Manual which contains policies related to this issue. Policy document 15-02-02, which applies to all decisions made on or after July 1, 1990, states that a personal injury by accident occurs in the course of employment if the surrounding circumstances relating to place, time and activity indicate that the accident was work-related. Further, policy document 15-03-03, applicable to all decisions made on or after June 1, 1989, states that a worker is considered to be in the course of employment on entering the employer’s premises but that the “in the course of employment” status ends on leaving the employer’s premises, unless the worker leaves the premises for the purposes of employment. These policies seem to be in conformity with the WSIAT’s decisions.
Worker's Compensation in Ontario and Restrictions on the Right to Sue an Employer

Worker's Compensation in Ontario and Restrictions on the Right to Sue an Employer

The Workplace Safety and Insurance Act, 1997 governs the Ontario workers’ compensation system.

Fundamental to this system is a compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims.

Employers receive protection from lawsuits in exchange for financing the program through premiums.

Employees cannot sue employers or most other employers for injuries occurring during employment, in most circumstances.

This system of collective liability provides compensation for injured workers and their families, while spreading individual costs among employers.

It means that if an employee commences a lawsuit against its employer or other employer, that employer can have the lawsuit dismissed.

Here is how it works:

Section 13(1) of the WSIA, 1997 states that a worker who sustains a personal injury by accident, arising out of and in the course of his or her employment, is entitled to benefits under the insurance plan.

Section 28 of the WSIA, 1997 provides that a worker employed by a Schedule 1 employer is not entitled to commence an action against any Schedule 1 employer (or a Director, Executive Officer or a worker employed by any Schedule 1 employer) in respect of the worker’s injury. This protection from lawsuits is the trade-off for the compensation injured workers receive.

Section 27 of the WSIA, 1997 states that Section 28 applies with respect to a worker who sustains an injury that entitles him or her to benefits under the insurance plan. Therefore, this prevents workers who are entitled to benefits under the insurance plan from suing another employer who is also within the same Schedule 1.
Small Claims Court - $25,000 Limits

Small Claims Court - $25,000 Limits

On January 1, 2010, the monetary jurisdiction of Small Claims Court in Ontario will be raised from $10,000 to $25,000. The limit had not changed since 2001 when it was increased from $6,000 to $10,000.

The question I have been wondering is, what will happen to cases started prior to January 1, 2010, but which claim between $10,000 and $25,000? If you start a case before Jan. 1 for $25,000, will it automatically be transferred to Small Claims Court after that date?

The answer seems to be no.

Section 23(2) of the Courts of Justice Act states:

"An action in the Superior Court of Justice may be transferred to the Small Claims Court by the local registrar of the Superior Court of Justice on requisition with the consent of all parties filed before the trial commences if,

(a) the only claim is for the payment of money or the recovery of possession of personal property; and

(b) the claim is within the jurisdiction of the Small Claims Court."

It seems that this rule will apply for transfers after January 1, 2010.

In the absence of consent among the parties, a change will require a motion to the Superior Court of Justice.

Why would a party prefer the Superior Court of Justice to the Small Claims Court? One reason would be the discovery procedures available to the parties in Superior Court which are not available in Small Claims Court, such as examinations for discovery and affidavits of documents. Small Claims Court only requires parties to produce documents upon which it intends to rely at trial and a list of proposed witnesses and other persons with information about the matter at issue. This is a significant difference.

Another reason might be the costs rules which are limited in Small Claims Court to 15% of a claim (this can be doubled if a party beats at trial its own offer to settle, in certain circumstances). Of course this is more restrictive than the costs that are available to a successful party in a Superior Court action.

The consequence to a plaintiff however for failing to transfer a proper case to the Small Claims Court may be an order that the plaintiff not receive any costs. See Rule 57.05 of the Rules of Civil Procedure.
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Pierringer-type Agreements

Pierringer-type Agreements

Pierringer-type agreements are exotic sounding. But are they really useful or worthwhile using in everyday insurance-type cases?

It seems to me that in the proper circumstances they can, in fact, be quite useful. And they are not really as complicated or exotic as they might at first seem.

They are useful where one defendant is willing to settle with the plaintiff while the other defendant is not.

The agreement simply permits the plaintiff to settle with the "settling defendant" but proceed with the action against the "non-settling defendant".

Such an agreement was approved by the Ontario Court of Appeal in JM and WB, 2004 O.J. No 2312, 71 O.R. (3d) 171 (C.A.).

The agreement should provide:

1. That the settlement and payment contemplated are not to be taken as an admission of liability on the part of the settling defendant;

2. That the action will be dismissed as against the settling defendant, on consent and without costs;

3. That the plaintiffs will use their best efforts to cause any crossclaims against the settling defendant to be similarly dismissed, without costs, in order to fully and finally conclude all litigation arising from the matters pleaded in the action against the settling defendant;

4. A full and final release by the plaintiffs in favour of the settling defendant;

5. That the plaintiffs will indemnify and hold harmless the settling defendant from any crossclaim or third party claim, and any other proceeding or claim arising from the issues and allegations in the within action; and

6. For the disclosure of the agreement, including the settlement amount provided thereunder, to the trial court, on certain conditions.

The indemnity provision should state that the plaintiffs restrict their claim to whatever the non‑settling defendants may be directly liability for and, as such, non-settling defendants cannot be jointly liable with the settling defendant.

This means that non-settling defendants have no basis to seek contribution, indemnity, relief over by way of equitable subrogation, declaratory relief or otherwise against the settling defendant.

An order should then be obtained dismissing the plaintiffs’ claim against the settling defendant, after which the plaintiffs amend their statement of claim, on consent, to reflect its compromises in its claim detailed in the Pierringer agreement, stating as follows:

The plaintiff has agreed with the settling defendant that it shall limit its claims against the non-settling defendants to claims for damages, costs and interest attributable only to the non-settling defendants share of liability to the plaintiff (and joint liability to one another, if any, and if there is more than one non-settling defendant) such that the plaintiff’s recovery shall be limited to recovering the damages, costs and interest attributable to the non-settling defendants’ several share of liability (or joint share of liability if more than one non-settling defendant) as proven against it or them at trial.

For greater certainty, the plaintiff shall have no claim directly or indirectly against the settling defendant and the plaintiff shall limit its claim against the non-settling defendant so as to exclude any crossclaim or third party claim made against or which could be made against the settling defendant arising from the issues in this action.

The plaintiff admits that the Court at any trial of this matter has and shall have full authority to adjudicate upon the apportionment of liability, if any, between all defendants named in the Statement of Claim, including the settling defendants, whether or not the settling defendants remain as parties by crossclaim or third party claim in this action.

The terms of the agreement listed above, plus amendments to the Statement of Claim, were approved by the Court of Appeal for Ontario in the above-noted decision.
Limitation Periods

Limitation Periods

Grewal v. Ivany, 2008 ONCA 687.

This is an interesting decision of the Court of Appeal of Ontario from last year. It addresses the issue of discoverability and when a limitation period starts running.

In Ontario, claimants normally have two years to commence an action. This however is subject to discoverability.

The injured parties were involved in a motor vehicle accident and waited three and a half years to commence an action. The motion judge dismissed the plaintiff's action as out of time.

The Court of Appeal held that the plaintiff's lack of prognosis, along with a medical notation in the family doctor's notes that the plaintiff's pain is chronic, were not enough to start the limitation period running.

Further the Court of Appeal said that there wasn't enough evidence to conclude that the plaintiff would meet the threshold or not, so he couldn't know if he should commence a claim or not. This was despite the fact that the plaintiff had admitted during cross examination that he was uncertain if his neck pain would go away at a time more than two years before he commenced the action. In other words, he knew he had pain and he knew he might not get better.

It is interesting that the threshold seems to have protected the plaintiff from the statute of limitations.
Proof of Loss

Proof of Loss

Section 136 - "No action shall be brought for the recovery of money payable under a contract of insurance until the expiration of sixty days after proof, in accordance with the provisions of the contract,

(a) of the loss; or

(b) of the happening of the event upon which the insurance money is to become payable,
or of such shorter period as is fixed by the contract of insurance."

I would take this to mean that if a court action is started before sixty days have elapsed that the insurer may bring a motion to dismiss the action.

Is this a complete bar to a court action?

The preceding section, s. 135 of the Insurance Act, requires insurers to "furnish forms" for proof of loss to the insured. Insurers are required to send these "Proof of Loss" forms to insured claimants.

My question is this, if the insured fails to complete and return these "Proof of Loss" forms but in all other respects cooperates with the insurer and the insurer conducts a thorough investigation of the loss, can the insurer rely on the failure to complete and return the "Proof of Loss" forms as a bar to the insured's action? Or can there be "deemed" notice of proof of loss in certain circumstances? Finally, what if the "Proof of Loss" forms are completed and returned to the insurer but the insured commences her/his court action prior to waiting sixty days?