Docken & Company
900, 800-6th Ave. SW
Calgary, Alberta
Canada, T2P 3G3
v: (403) 269-3612
f: (403) 269-8246
e: e-mail us
Copyright 1998-2005
Docken & Company. All Rights Reserved.
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Legal Bits & Bytes
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HOST LIABILITY - HOTEL'S DUTY TO WARN OF A DANGEROUS RAILWAY CROSSING Nov. '00
The Ontario Court of Appeal had to rule on whether a hotelier had a duty to warn one of its guests of a dangerous railway crossing nearby. The guest was injured at the crossing to the tune of $2 Million. The trial judge found the Hotel liable for 10% of the injuries. The Court of Appeal reversed that finding, saying that the danger was not their responsibility, and therefore no duty to warn.
When analyzing a case like this, one goes back to the basics - Kamloops v. Nielson SCC. Did the Defendant create the risk; did he have any control over it. Its easy to get sidetracked by focusing on the Host's relationship to the Plaintiff, and simply saying that they were close enough for a `duty of care'; and then looking at foreseeability. In this case, even the trial judge got sidetracked - the Court was correct that hotels owe guests a duty of care; and this loss appears to have been foreseeable. But is a hotel responsible for every injury one of its guests suffers? Hardly.
Compare this to the common Host Liability scenario - drunk patrons. Did the Host create the risk; does it have any control over the risk. In some cases, yes. Consequently, there can be liability. And that's why creative underwriting and expert claims handling of these cases is necessary. After all, limits are normally well over $1 Million.
ALBERTA PLANNING TO INCREASE SMALL CLAIMS COURT LIMIT TO $50,000
The legislation has been drafted to increase Alberta's Provincial Court, Civil Division, monetary limits to $50,000. The legislation is not law as yet, however the effect would be to allow Plaintiffs to sue insureds in this Court for amounts up to $50,000. There are some serious administrative issues yet to be dealt with - like more courtrooms, judges, etc.
Insurers will also need to be ready. The results in Small Claims court are less certain. Reasons such as, not be able to examine parties for discovery, production of documents in advance of trial, etc. If you cannot examine the other party or his documents, the trial testimony and evidence can catch people by surprise.
However, these same disadvantages make Small Claims Court faster and less expensive. If positioned properly, insurers can take advantage of this.
ALL-RISKS COVERAGE - HOMEOWNERS POLICY - INTERIOR SMOKE DAMAGE
Brennan v. Economical Nov '00
In this case, the insured's tenant had a candle fettish. He or she burned so many candles that there was smoke damage to the walls and ceiling of the suite. Some brilliant lawyer mistook the All-Risks coverage to mean any damage what-so-ever. They forgot the part about insurance only covering fortuitous and accidental losses. Without this, insurance would be like some form of guarantee.
It is an expected result (not fortuitous) to have smoke damage from too many candles. Just like it is an expected result for the paint to peal or drywall to sag, in a poorly ventilated bathroom. Does insurance pay for that? Nope. And that's what the judge said in this case.
So next time you get one of these claims, you can quote them this case as an example.
October 2000 - DUTY TO DEFEND - MOTOR VEHICLE POLICY
Longo v. Maciorowski Ont. C.A. What are the rules for an Auto Insurer denying the insured a defence? In Longo, before discoveries, the insured was asking the Court to require the insurer to defend. The Court of Appeal said the insurer did not have to pay for the insured's defence, but it depends on the circumstances of each case. In this case, the circumstances were: insurer alleged breaches of the policy and Stat. Conditions; the insured did not dispute some of the allegations of breaches; the insurer added itself as a Third Party to the lawsuit and contested both liability and quantum.
July 2000 - PRIVILEGE - INSURER'S INVESTIGATION
Ferris v. Shell Canada Ont. Sup. Ct. Here, the insurer was subrogating for clean-up of an oil spill. The Defendant wanted access to the insurer's claims adjusting records, arguing that these were created to adjust the insured's loss, and therefore not for the purposes of subrogating for the costs of the loss. The Court applied the Dominant Purpose test, and sided for the insurer. It said that the insurer may well have been contemplating subrogation at the same time it was investigating the loss. Hence, the dominant purpose of the investigation could have been both to adjust the loss and to subrogate for those costs.
ICBC ESTIMATES $50 Million in savings from denial of fraudulent claims and recovery of money from fraud-sters in 1999. 79 people have been charged with 178 offences - 22 convictions obtained. They have also filed 42 lawsuits in 1999. They have a tip-line, and received more than 32,000 calls. They estimate fraud costs each auto policy $150.
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