Date: Wed, 8 Nov 2006 05:56:28 -0700

From: Russell Brown

Subject: Punitive damages for negligence

David's last point (about auto insurance coverage being highly regulated in Canada) also explains why punitive damages are NOT covered in British Columbia, where for over 30 years a public auto insurer has enjoyed a statutory monopoly. This is a function of both section 64 of the Insurance (MV) Act (which provides for payment of liability imposed on the insured for injury or death), and section 56(1)(c) of the Regulations to the Act, which states, inter alia:

[the insurer] is not liable under [Section 64 of the Act] in respect of punitive or exemplary damages or other similar non-compensatory damages.

Russ

>>> DAVID CHEIFETZ 11/07/06 9:47 AM >>>

(Local knowledge person speaking)

Yup. It IS insured - or putting it better, I can't imagine any Ontario judge holding that the liability insurance doesn't apply to the punitive damage liability given the present wording of the policies. Blair JA was right.

There's no exclusion for punitive damages in the Ontario motor vehicle liability coverage AND the coverage grant doesn't refer to "compensatory damages". It provides, under the heading "What We Cover" - this is plain language wording.

You or other insured persons may be legally responsible for the bodily injury to, or death of others, or for damage to the property of others as the result of owing, using or operating the automobile. In that case, we will make any payment on you or other insured persons' behalf that the law requires, up to the limits of the policy.

The statutory wording, in s. 239 of Ontario's Insurance Act is "liability imposed by law".

239. (1) Subject to section 240, every contract evidenced by an owner’s policy insures the person named therein, and every other person who with the named person’s consent drives, or is an occupant of, an automobile owned by the insured named in the contract and within the description or definition thereof in the contract, against liability imposed by law upon the insured named in the contract or that other person for loss or damage,

(a) arising from the ownership or directly or indirectly from the use or operation of any such automobile; and

(b) resulting from bodily injury to or the death of any person and damage to property.

R.S.O. 1990, c. I.8, s. 239 (1).

The subject to section 240 stuff isn't relevant.

There's a dodge of the problem in footnote 3 to para. 55 of the majority reasons. "Our understanding is that the terms of the policy will dictate whether or not punitive damages would be included." Really? They didn't know what the answer has to be if the case has to be fought, given the policy wording and the statute?

The form of and content of automobile liability insurance is highly government-regulated throughout Canada.

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