Decisions During the Global Pandemic

Decisions During the Global Pandemic

Litigation Matters

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    November 2021

    Throughout the pandemic crisis, litigation had no choice but to adapt: discoveries, mediations and even trials were conducted virtually or in a hybrid format. There may have been some slowdown at the peak of the first two waves. Some Counsel & Litigation Specialists also noted an increase of case orientation toward mediation by Plaintiff Counsel, resulting in earlier case resolution.

    From the comments we heard in the industry, it appears that the “new” normal may result in more mediations and discoveries conducted remotely, and therefore allow more flexible and less costly options that will result in quicker case resolution.

    Even with the upheaval of the pandemic, litigation continues to set precedents.

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    This latest edition of Litigation Matters will discuss recent decisions from 2020-2021.

    Recent Decisions of Interest Related to AD&D Coverage

    Downey v. Scotia Life Insurance Company, 2020 ABQB 638 (CanLII)

    In this case, the plaintiff sought payment from Scotia Life for $202,000, representing the benefits payable under two accidental death insurance policies. The two insureds and beneficiaries named in the policies were Mrs. Downey and her late husband.

    The Facts

    On September 27, 2015, Mr. Downey was on a boat on Moose Lake in British Columbia with his mother, Mrs. Richter. Mr. Downey was then 56 years, and Mrs. Richter was 80 years of age. Mr. Downey was a competent swimmer. While in the boat fishing, Mr. Downey clutched his chest and told Mrs. Richter that he could not breathe. He then slumped onto the side of the boat, which caused the boat to capsize. Mr. Downey and his mother were then thrown into the water. Mr. Downey surfaced at once and his mother encouraged him to swim to shore, but Mr. Downey said he could not swim. Mr. Downey then went under the water a second time and was not seen alive again.

    An external examination of the remains was performed, and the coroner’s report concluded that death was caused by asphyxia as a consequence of drowning. Myocardial infarction was listed as a significant condition contributing to death.

    The applicable definition of accident:

    Accidental Bodily Injury means bodily injury that is affected directly and independently of all other causes by an accidental, external, violent, and visible means and that occurs to You while your coverage in respect of this Certificate is in force.

    PAYMENT OF BENEFIT AMOUNT Subject to all the provisions of the Group Policy, We will pay the Benefit Amount if You sustain an Accidental Bodily Injury that directly causes one of the following conditions:

    (a) Your death...

    What’s Not Covered

    No Benefit Amount will be payable if Your death or Hospital confinement resulted directly or indirectly from, or was in any manner or degree associated with or occasioned by, any one or more of the following, or if any one or more of the following contributed in any way whatsoever to Your death or Hospital confinement:

    (a) any naturally occurring condition, illness or disease or bodily or mental infirmity of any kind, or medical or surgical treatment for any such condition, illness disease or infirmity;

    The Court Decision

    The Court did not accept that the presence of a pre-existing medical condition anywhere along the chain negates the coverage provisions of an accidental death policy. The Court referred to Co-operators Life  Insurance Co. v. Gibbens, 2009 SCC 59 (CanLII), stating that it is sufficient for a claimant to demonstrate that an accident, such as a shipwreck, or a fall from a horse, was an important element along the chain of events which led to the loss. Applying the principles reflected in Gibbens, the Court found that the cause of death was accidental: Mr. Downey did not die from any naturally occurring internal condition such as a  myocardial infarction. Although a cardiac event caused the accident, which prompted Mr. Downey to be  thrown into the water, his death was caused solely by drowning and not by the myocardial infarction.  

    Since Ms. Downey met her onus of establishing that Mr. Downey’s death falls within the initial grant of  coverage, the onus then shifted to the Insurer to establish that the following exclusion clauses applied.

    The Court did not find that the exclusion clause is so broad as to render the AD&D coverage  unenforceable. The exclusion clause does not virtually nullify the coverage provided by the policies, and the policies continue to cover losses caused by accidental bodily injuries that are not connected to a naturally occurring disease or infirmity.

    Given that the insured was not required to undergo any medical examinations to obtain coverage,  excluding coverage for bodily injuries associated with or occasioned by pre-existing conditions would be contrary to the reasonable expectations of the ordinary person purchasing coverage.

    The court argued that although the cardiac event did not itself kill Mr. Downey, it cannot be said that his  death was not “in any manner or degree associated with or occasioned by” the cardiac event. The cardiac event also “contributed” to his death.

    The court determined that the exclusion clauses, while exceptionally broad, were not so broad as to  render them unenforceable. Therefore, the accidental death insurance benefit was not payable.

    DISCLAIMER Munich Re's Litigation Matters publications are intended to provide general information on life insurance matters. Information and opinions contained in our publications do not constitute legal advice.
    Contact the authors
    Charles Tremblay, B.A., LL.B.
    Assistant Vice President, Claims & Litigation
    Julie St-Laurent, LL.B, LL.M.
    Director, Claims Litigation