Why apology legislation benefits insurers
RYAN REMIORZ / CANADIAN PRESS IMAGES
Michael McCain, CEO of Maple Leaf Foods, holds a press conference in
2008 after a deadly listeriosis outbreak.
ntario recently joined
B.C., Manitoba and
Saskatchewan — as
well as some jurisdictions outside of Canada
— in enacting apology
legislation. Like the others, Ontario’s
version provides that an apology does
not constitute an express or implied
admission of fault or liability, and
does not nullify or otherwise affect
liability insurance coverage regardless
of wording to the contrary in a policy.
Those in the insurance community
may worry that this means a loss of
control over the defence of third party
claims. Liability policies invariably
assign control of the defence of claims
to the insurer and include a condition
requiring the insured to refrain from
assuming any obligation to a third
party without the insurer’s consent.
The Apology Act appears to under-
mine the effect of these provisions. It
defines an apology as: “… an expres-
sion of sympathy or regret, a state-
ment that the person is sorry or in any
other words or actions indicating con-
trition or commiseration, whether or
not the words or actions admit fault
or liability or imply an admission of
fault or liability in connection with
the matter to which the words or
actions relate.” It follows that, if an
insured makes an apology that
includes an admission of liability, the
assumption of obligation implied in
that may not be invoked by the insur-
er to deny indemnity.
Insurance defence counsel face ethical ‘tug of war’
The Law Society of British
Columbia noted in 2006 that “it
seems likely that not all lawyers
who practice in [insurance
defence] are compliant with
their [professional and ethical]
obligations.” Insurance defence
counsel — both the cynical veteran and the newly minted practitioner — should keep this in
Much legal literature has
addressed the liability insurer’s
duty to defend lawsuits against
their insureds. The material
tends to focus on the rights and
obligations of the insurer and
the insureds respectively. The
terms of the contract (the poli-
cy) between the parties drive
much of the analysis. When is
the duty to defend triggered?
Who appoints and instructs
defence counsel? How should
conflicts of interest between
insurer and insured be
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