Date: Sun, 27 Jul 2003 11:21:42 -0400

From: Jason Neyers

Subject: Insurance/Principles/Policies

I post on behalf of Harold Luntz:

Insurance

Isn't the distinction Jennifer makes between the availability of insurance and whether or not the particular defendant is insured? The latter is irrelevant, but the former must be relevant to deciding novel issues. Lewis' earlier comment that the courts sometimes take such availability into account and sometimes refuse to is undoubtedly true. In the largest class action ever tried in Australia, the trial judge recently had to consider the conflicting statements in order to decide whether he could take the availability of insurance to both plaintiffs and defendants into account: see Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27; (2003) Aust Torts Reps 81-692 (Vic SC) (a rather long rambling judgment, but with some interesting discussion of this particular point). May I again quote Patrick Atiyah, this time on the fictional nature of ignoring the insurance factor? Speaking of Dorset Yacht v Home Office, he said:

the real issue ... was whether the damage to the yacht should be borne by the plaintiff's insurers (and, therefore, ultimately by premium-paying yacht owners) or by the Home Office (and ultimately taxpayers). This issue was wholly ignored in the Court of Appeal and the House of Lords. Although the Attorney-General opened his argument in the House by drawing attention to the realities, his courage seems to have failed him at that point, for he ended by saying 'no point is taken on this'. The result of this is that a case of this kind is a modern version of Roe v Doe; in fact it is even worse because at least the arguments and judgments in the mediaeval Roe v Doe case looked at the substance of the dispute between the real parties and not the nominal parties. In the current version the arguments and judgments completely ignore the real parties and real issues and pretend that the issue is between the property owner and the actual tortfeasor personally ...

Auditors' liability

The reason given by Lewis for why the SCC might care about whether insurance became too expensive may not be the only one he suggests. McHugh J in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (Reg) (1997) 188 CLR 241 at 282-9, spells out a host of reasons, mostly taken from an American academic, why placing additional burdens on auditors might be hurtful to the general welfare. One might not agree with them all, but at least, as Lewis points out, if the reasons are brought out into the open one can challenge them.

Earnings-related compensation

On this issue, I concede that I am very much in the minority, though Lord Steyn at least recognised the point in Wells v Wells [1999] 1 AC 345 (HL). When society pays more to film stars, lawyers and doctors than to factory workers it could be said that it does so because it values their products more highly. Once they are injured and unable to produce, there is no longer a need to pay them more because society is not receiving the products in return. And the argument is not met by resort to the principle that the aim of the law is to restore the plaintiffs to the position they would have been in if they had not been injured. If they had not been injured they would have had to produce in order to receive their income; now they are not producing. This means that they do they have to get up when the alarm rings in the morning, fight their way to the office, etc through the traffic and work under stress to earn their income. Admittedly they also lose the enjoyment the job brings, but that can be separately compensated.

Harold Luntz.

--
Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

<<<< Previous Message  ~  Index  ~  Next Message >>>>>