|
Insurance - Broker Liability. Gagne v. Ivari
In Gagne v. Ivari (Ont CA, 2023) the Court of Appeal considered (and allowed an appeal from) a decision relating an insurer's (not a broker's) liability under "a duty to determine an insured’s requirements", which was initially dismissed on an R21 motion to strike pleadings:[1] The appellants commenced an action against the respondent life insurance company and others alleging breach of contract, breach of fiduciary duty and negligence in relation to the creation of a financial retirement plan that included, among other things, the use of life insurance contracts. The appellants allege that the plan was unsuitable and caused them loss and damages.
[2] The respondent Ivari brought a motion under r. 21. 01(1)(b) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for dismissal of the action against it for failure to disclose a reasonable cause of action.
[3] The motion judge accepted the respondent’s argument, that based on a line of cases following Fine’s Flowers et al. v. General Accident Assurance Co. of Canada et al. (1977), 1977 CanLII 1182 (ON CA), 17 O.R. (2d) 529 (C.A.), insurers do not have a duty to determine an insured’s requirements. The motion judge concluded that the appellants failed to identify a duty owed to them by the respondent and to state how that duty was breached. He took the view that the litigation was really about bad advice, not a bad product or the faulty delivery of insurance products. He refused leave to amend the statement of claim because he was not persuaded that there was a way to amend the pleadings to create a viable cause of action “in circumstances where the legal principles distinguishing between insurance brokers and insurers are settled.”
....
[8] The motion judge appears to have drawn two conclusions about the appellants’ pleading: first, that the statement of claim did not disclose a cause of action against the respondent because of settled principles of law distinguishing between the obligations of insurers and brokers and agents; and second, that the statement of claim did not plead the necessary elements of the various causes of action against the respondent. We agree with the second conclusion, but not the first.
[9] We do not agree that there is any general principle of law that an insurer will never owe a duty to an insured with respect to the suitability of an insurance product. The cases relied on by the motion judge were decided in the context of summary judgment motions or after trial, where claims against insurers were dismissed based on the evidence. Indeed, the respondent’s counsel acknowledged that there is no such general principle of law, although he contends that in the particular context of the relationship between these parties, there was no opportunity for the respondent to have given what amounted to financial planning advice. . 2049390 Ontario Inc. v. Leung
In 2049390 Ontario Inc. v. Leung (Ont CA, 2020) the Court of Appeal observed in this insurance broker negligence case:[29] In her reasons, the trial judge accepted that insurance brokers owe a duty of care to their clients to provide information and advice about “which forms of coverage they require in order to meet their needs” and the limits of that coverage: Fletcher v. Manitoba Public Insurance Co., 1990 CanLII 59 (SCC), [1990] 3 S.C.R. 191, at p. 216. See also Fine’s Flowers Ltd. et al. v. General Accident Assurance Co. of Canada et al. (1978), 1977 CanLII 1182 (ON CA), 17 O.R. (2d) 529 (C.A.). ...
|
