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.

CRAIG
BROWN

Insurance defence counsel face ethical ‘tug of war’

NIGEL
KENT

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 mind.

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
addressed?

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