Date: Thu, 24 Jul 2003 11:55:53 -0600

From: Lewis Klar

Subject: Luntz/Neyers Debate

Colleagues:

I am enjoying the discussion between Professors Luntz and Neyers as it raises issues which intrigue me greatly.

On the matter of whether insurance is relevant or not to deciding cases, as always it seems to depend on the result the court desires. In Dobson (cited by Jason) the SCC explicitly rejected the existence of insurance in deciding whether the mother should be liable for her negligent driving. The majority of the SCC did not want the precedent of finding liability, even if the damages were going to be paid by an insurance company. Hence the child and family could not access insurance which they had been paying for.

In cases like Hercules Management v Ernst & Young, [1997] 2 SCR 165, however, the SCC seemed concerned that if negligent auditors were to be found liable, their insurance premiums would go up. Thus not only did the Court consider the existence of insurance as a factor in determining liability, but they went even further and speculated about how premiums for such insurance might be affected .. a matter on which they undoubtedly heard no evidence.

On the wider issue of whether courts should do the "fair" thing and refuse to distribute money from poor people to rich people by using tort law, this opens up a much bigger can of worms. Jason I think correctly points out the limits on judges in turning our society into a better place by using private law .. not a unique argument but one which merits remembering, especially since the duty issue in tort law (an other parts of the action as well, eg cause) is now almost totally governed by concepts of "policy", and "fairness". Using the loss of income argument as an illustration, tort law compensates higher earners much more than lower earners. This is because society has decided that some people "should" earn more than others. It thus continues to take wealth from the poor and give it to the rich to use Professor Luntz's argument. Can courts now decide that tort law should not compensate for loss of earning capacity based on one's actual earnings, but based on a "fair" wage scheme? Say .. everyone gets average income whether they were earning it or not? I would venture to guess that most people would not be in favour of judges making such a decision. But is converting a fault based private law system into a no fault public law system by using tort law not doing exactly that? (Vicarious liability is another illustration of judges deciding based on "fairness" who they think should become no fault insurers for victims of physical and sexual abuse.)

These are important issues and I hope that it is not assumed that those who feel that judges should not be going beyond their institutional competence or capacity are in favour of the "status quo". We just disagree on how it should be changed.

Lewis Klar

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