A recent Superior Court decision highlights the interplay of the Workplace Safety and Insurance Act with the Highway Traffic Act.
In Maria-Antony v. Selliah, 2014 ONSC 4264 (S.C.J.), the plaintiff was injured in a motor vehicle accident involving a tractor-trailer owned by FTI. At the time of the accident both the plaintiff and the defendant driver (Selliah) were employed as transport truck drivers for 1362038 Ontario. They had been contracted to carry cargo for 1323109 Ontario.
A right to sue application was brought before the Workplace Safety and Insurance Appeals Tribunal. The tribunal held that plaintiff's action against Selliah and the numbered companies was barred. Since FTI was not an employer, the action against it as owner was not barred.
FTI brought a summary judgment motion to have the action against it dismissed, taking the position that the result of the Tribunal decision was to make any liability to the plaintiff several (not joint and several), thereby limiting liability to its own negligence. There was no evidence of negligence by FTI; the claim was based on its status as owner of the vehicle.
O'Marra J. dismissed the motion. Section 192 of the Highway Traffic Act which imposes vicarious liability on the owner of a vehicle for the actions of the driver, and so FTI remained liable for the acts of the driver. Even though the action against Selliah was barred, FTI did not enjoy the statutory protection under the WSIA.
It seems that this decision allows plaintiffs to do indirectly what they cannot do directly: recover damages based on the negligence of a protected worker.
A weekly update of cases pertaining to the practice of insurance defence.
Showing posts with label Worker's Compensation. Show all posts
Showing posts with label Worker's Compensation. Show all posts
September 24, 2014
February 1, 2012
Interpretation of the Insurance Contract – Back to the Basics
In Sam’s Auto Wrecking Co. (c.o.b. Wentworth Metal) v. Lombard General Insurance Co. of Canada (S.C.J.), the Operations Manager of Sam’s Auto, Mr. Farber, was injured on the job when he was run over by a crane being operated by an employee, resulting in the severance of his right leg between the ankle and knee and a serious cut to his left heel.
Mr. Farber was not an owner but was considered to be a part of the management team at Sam’s Auto. Prior to the incident, the owners had decided to opt out of WSIB insurance for themselves and Mr. Farber, for economic reasons. They purchased alternative disability insurance. However, they were left with a gap in coverage for which they were unaware.
When they approached the broker for Lombard to acquire a comprehensive business policy, they did not advise him that not everyone at their company had WSIB coverage. They obtained a comprehensive business insurance policy through Lombard which included commercial general liability. Because no one was aware of the gap in coverage, an employer’s liability endorsement was not requested.
Following the incident, Mr. Farber sued Sam’s Auto. Lombard took an off coverage position and consequently would not provide a
defence. As a result, this action was commenced.
The issue before the court was whether the personal injury experienced by Mr. Farber, due to the actions of an employee at Sam’s Auto, operating within the scope of his employment, was or should have been covered by the insurance policy Sam’s Auto had through Lombard.
Justice Whitten used basic contract interpretation principles in his interpretation of the insurance policy:
1) The contra proferentem rule;
2) The principle that coverage provisions should be construed broadly and exclusion clauses narrowly; and
3) The desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectation of the parties.
Justice Whitten cited the principle from Bathurst Ltd. V. Mutual Boiler and Machinery Insurance Company [1980] 1SCR 888 that the “objective is to search for an interpretation which from the whole of the contract would appear to promote or advance the true intent of the parties at the time of entry into the contract.”
Justice Whitten listed factors to consider, in an insurance context, to determine the intent of the parties at the time of entry into the contract:
1) What was the nature of the business operated by the potential insured?
2) Was there an independent insurance contractor involved? Or was the insurance solicited direct from the insurance company?
3) If a broker was involved, what was requested or communicated to the broker?
4) What was the broker’s understanding of what was communicated to him or her that guided the request for coverage from the insurer?
5) What was the broker’s understanding or knowledge as to the appropriate insurance coverage?
The policy stated: "We will pay those sums that the insured becomes legally obligated to pay as compensatory damages because of “bodily injury” to which this insurance applies...This insurance does not apply to … (d) “Bodily Injury” to an employee of the insured arising out of and in the course of employment by the insured".
Justice Whitten held that there was no ambiguity with respect to these sections and it was clear that personal injury to the public was covered but personal injury to an employee working in the course of his or her employment was exempt. Given the nature and size of the business, the broker was reasonable in assuming that all employees were covered by WSIB, and was not told any different. Therefore, the broker would not have been aware of the gap in coverage.
There were arguments advanced with respect to whether Mr. Farber would be considered an “employee” because of the management position he held. Justice Whitten held that the distinction between the terms “employee” and “executive officer” is purely “academic”, and had no bearing in this context.
It was held that there was a clear lack of coverage and therefore no duty to defend existed.
- Kristen Dearlove, Student-at-Law
Mr. Farber was not an owner but was considered to be a part of the management team at Sam’s Auto. Prior to the incident, the owners had decided to opt out of WSIB insurance for themselves and Mr. Farber, for economic reasons. They purchased alternative disability insurance. However, they were left with a gap in coverage for which they were unaware.
When they approached the broker for Lombard to acquire a comprehensive business policy, they did not advise him that not everyone at their company had WSIB coverage. They obtained a comprehensive business insurance policy through Lombard which included commercial general liability. Because no one was aware of the gap in coverage, an employer’s liability endorsement was not requested.
Following the incident, Mr. Farber sued Sam’s Auto. Lombard took an off coverage position and consequently would not provide a
defence. As a result, this action was commenced.
The issue before the court was whether the personal injury experienced by Mr. Farber, due to the actions of an employee at Sam’s Auto, operating within the scope of his employment, was or should have been covered by the insurance policy Sam’s Auto had through Lombard.
Justice Whitten used basic contract interpretation principles in his interpretation of the insurance policy:
1) The contra proferentem rule;
2) The principle that coverage provisions should be construed broadly and exclusion clauses narrowly; and
3) The desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectation of the parties.
Justice Whitten cited the principle from Bathurst Ltd. V. Mutual Boiler and Machinery Insurance Company [1980] 1SCR 888 that the “objective is to search for an interpretation which from the whole of the contract would appear to promote or advance the true intent of the parties at the time of entry into the contract.”
Justice Whitten listed factors to consider, in an insurance context, to determine the intent of the parties at the time of entry into the contract:
1) What was the nature of the business operated by the potential insured?
2) Was there an independent insurance contractor involved? Or was the insurance solicited direct from the insurance company?
3) If a broker was involved, what was requested or communicated to the broker?
4) What was the broker’s understanding of what was communicated to him or her that guided the request for coverage from the insurer?
5) What was the broker’s understanding or knowledge as to the appropriate insurance coverage?
The policy stated: "We will pay those sums that the insured becomes legally obligated to pay as compensatory damages because of “bodily injury” to which this insurance applies...This insurance does not apply to … (d) “Bodily Injury” to an employee of the insured arising out of and in the course of employment by the insured".
Justice Whitten held that there was no ambiguity with respect to these sections and it was clear that personal injury to the public was covered but personal injury to an employee working in the course of his or her employment was exempt. Given the nature and size of the business, the broker was reasonable in assuming that all employees were covered by WSIB, and was not told any different. Therefore, the broker would not have been aware of the gap in coverage.
There were arguments advanced with respect to whether Mr. Farber would be considered an “employee” because of the management position he held. Justice Whitten held that the distinction between the terms “employee” and “executive officer” is purely “academic”, and had no bearing in this context.
It was held that there was a clear lack of coverage and therefore no duty to defend existed.
- Kristen Dearlove, Student-at-Law
August 6, 2009
Worker's Compensation - 4
An issue which has arisen in previous years is whether the Tribunal has jurisdiction to determine a section 31 application where the worker has received statutory accident benefits (SABs) under the Insurance Act but no court action has been commenced. While early cases found there was no jurisdiction, two decisions in 2007 considered more extensive submissions and found that the Tribunal has jurisdiction. Decision No. 1288/08, 2008 ONWSIAT 2572, agreed with the more recent cases that the Tribunal has jurisdiction to consider a SABs insurer’s section 31 application. Decision No. 1288/08 applied the reasoning in Decision No. 14/06, 2007 ONWSIAT 339, 81 W.S.I.A.T.R. (online), in finding that the insurer had standing to bring an application under section 31(1)(a). The phrase in section 31(1)(a) “right to commence an action”, includes situations in which the right has been conferred but has not been acted upon or triggered. (from WSIAT news website)
August 3, 2009
Worker's Compensation - 3
The WSIA and earlier Workers’ Compensation Acts are based on the “historic trade-off” in which workers gave up the right to sue in exchange for statutory no-fault benefits. The Tribunal has the exclusive jurisdiction to decide whether a worker’s right to sue has been removed by the Act. Right to sue applications may raise complicated legal issues, such as the interaction between the WSIA and other statutory schemes.
Decision No. 2126/07, 2007 ONWSIAT 2689, 84 W.S.I.A.T.R. (online), illustrates the type of disputes which the Tribunal may be called on to resolve under section 31 of the WSIA. While receiving treatment in hospital for a compensable condition, a worker fainted and sustained injuries to different parts of his body. Tribunal decisions have generally found that, where further injury results from negligent medical treatment, the additional injury is generally foreseeable; the worker is entitled to compensation and the right of action is removed. Decision No. 2126/07 held that the arguments that the new areas of injury were remote from the original injury and that the hospital was negligent in failing to warn the worker and supervise him following treatment, did not distinguish the case from prior Tribunal cases. (from WSIAT news website)
July 8, 2009
Worker's Compensation - 2
Further to my last post, the question often is whether a worker is in the course of employment or not.
For example, if a worker is on a smoke break at work when they get injured, is this an “injury by accident, arising out of and in the course of his or her employment”? Is this employee entitled to benefits from the Worker’s Compensation fund or is the worker able to sue?
There are several decisions from the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”), going back 15 to 20 years ago, in which the Tribunal held that workers who drive around most of the day as part of their employment and who have an accident while on a coffee break, stopping for lunch or running an errand not far off their scheduled route, do not create a “distinct departure” from their employment activities. Therefore, the accident was held to fall within the parameters of Section 13 of the WSIA, 1997, “an accident arising out of and in the course of employment”. The WSIAT ruled that the tort action was barred. These are cited at WSIAT decisions 351/90, 62/94 and 669/89.
In another case found at WSIAT decision 901/95, at paragraph 44, the tribunal found that a plaintiff who slipped and fell when he was going into a donut shop was engaged in a work-related activity that was reasonably incidental to his employment. In that instance, the plaintiff was a salesman and often used the donut shop for filling out paper work because he did not have an office of his own. He also often met clients at the donut shop.
The test used by the WSIAT is whether the personal injury in a work-related activity was “reasonably incidental” to the injured person’s employment. The WSIAT, in their decision of 901/95, also stated that they were persuaded that the plaintiff was engaged in a work-related activity that was reasonably incidental to his employment on the basis that the timing, duration, and potential cancellation of each break was determined by the requirements of the plaintiff. In other words, the plaintiff, as a salesman, was self-directed and there was not a bright line to distinguish between when he was on a break or when he was working in the donut shop.
In a more recent decision, the WSIAT, at decision 285/05, affirmed the work-relatedness test when deciding that an employee’s right of action had been taken away by the WSIA, 1997 when the employee slipped and fell in a parking lot of an airport while on a business trip.
The WSIB has an Operational Policy Manual which contains policies related to this issue. Policy document 15-02-02, which applies to all decisions made on or after July 1, 1990, states that a personal injury by accident occurs in the course of employment if the surrounding circumstances relating to place, time and activity indicate that the accident was work-related. Further, policy document 15-03-03, applicable to all decisions made on or after June 1, 1989, states that a worker is considered to be in the course of employment on entering the employer’s premises but that the “in the course of employment” status ends on leaving the employer’s premises, unless the worker leaves the premises for the purposes of employment. These policies seem to be in conformity with the WSIAT’s decisions.
For example, if a worker is on a smoke break at work when they get injured, is this an “injury by accident, arising out of and in the course of his or her employment”? Is this employee entitled to benefits from the Worker’s Compensation fund or is the worker able to sue?
There are several decisions from the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”), going back 15 to 20 years ago, in which the Tribunal held that workers who drive around most of the day as part of their employment and who have an accident while on a coffee break, stopping for lunch or running an errand not far off their scheduled route, do not create a “distinct departure” from their employment activities. Therefore, the accident was held to fall within the parameters of Section 13 of the WSIA, 1997, “an accident arising out of and in the course of employment”. The WSIAT ruled that the tort action was barred. These are cited at WSIAT decisions 351/90, 62/94 and 669/89.
In another case found at WSIAT decision 901/95, at paragraph 44, the tribunal found that a plaintiff who slipped and fell when he was going into a donut shop was engaged in a work-related activity that was reasonably incidental to his employment. In that instance, the plaintiff was a salesman and often used the donut shop for filling out paper work because he did not have an office of his own. He also often met clients at the donut shop.
The test used by the WSIAT is whether the personal injury in a work-related activity was “reasonably incidental” to the injured person’s employment. The WSIAT, in their decision of 901/95, also stated that they were persuaded that the plaintiff was engaged in a work-related activity that was reasonably incidental to his employment on the basis that the timing, duration, and potential cancellation of each break was determined by the requirements of the plaintiff. In other words, the plaintiff, as a salesman, was self-directed and there was not a bright line to distinguish between when he was on a break or when he was working in the donut shop.
In a more recent decision, the WSIAT, at decision 285/05, affirmed the work-relatedness test when deciding that an employee’s right of action had been taken away by the WSIA, 1997 when the employee slipped and fell in a parking lot of an airport while on a business trip.
The WSIB has an Operational Policy Manual which contains policies related to this issue. Policy document 15-02-02, which applies to all decisions made on or after July 1, 1990, states that a personal injury by accident occurs in the course of employment if the surrounding circumstances relating to place, time and activity indicate that the accident was work-related. Further, policy document 15-03-03, applicable to all decisions made on or after June 1, 1989, states that a worker is considered to be in the course of employment on entering the employer’s premises but that the “in the course of employment” status ends on leaving the employer’s premises, unless the worker leaves the premises for the purposes of employment. These policies seem to be in conformity with the WSIAT’s decisions.
July 5, 2009
Worker's Compensation in Ontario and Restrictions on the Right to Sue an Employer
The Workplace Safety and Insurance Act, 1997 governs the Ontario workers’ compensation system.
Fundamental to this system is a compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims.
Employers receive protection from lawsuits in exchange for financing the program through premiums.
Employees cannot sue employers or most other employers for injuries occurring during employment, in most circumstances.
This system of collective liability provides compensation for injured workers and their families, while spreading individual costs among employers.
It means that if an employee commences a lawsuit against its employer or other employer, that employer can have the lawsuit dismissed.
Here is how it works:
Section 13(1) of the WSIA, 1997 states that a worker who sustains a personal injury by accident, arising out of and in the course of his or her employment, is entitled to benefits under the insurance plan.
Section 28 of the WSIA, 1997 provides that a worker employed by a Schedule 1 employer is not entitled to commence an action against any Schedule 1 employer (or a Director, Executive Officer or a worker employed by any Schedule 1 employer) in respect of the worker’s injury. This protection from lawsuits is the trade-off for the compensation injured workers receive.
Section 27 of the WSIA, 1997 states that Section 28 applies with respect to a worker who sustains an injury that entitles him or her to benefits under the insurance plan. Therefore, this prevents workers who are entitled to benefits under the insurance plan from suing another employer who is also within the same Schedule 1.
Fundamental to this system is a compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims.
Employers receive protection from lawsuits in exchange for financing the program through premiums.
Employees cannot sue employers or most other employers for injuries occurring during employment, in most circumstances.
This system of collective liability provides compensation for injured workers and their families, while spreading individual costs among employers.
It means that if an employee commences a lawsuit against its employer or other employer, that employer can have the lawsuit dismissed.
Here is how it works:
Section 13(1) of the WSIA, 1997 states that a worker who sustains a personal injury by accident, arising out of and in the course of his or her employment, is entitled to benefits under the insurance plan.
Section 28 of the WSIA, 1997 provides that a worker employed by a Schedule 1 employer is not entitled to commence an action against any Schedule 1 employer (or a Director, Executive Officer or a worker employed by any Schedule 1 employer) in respect of the worker’s injury. This protection from lawsuits is the trade-off for the compensation injured workers receive.
Section 27 of the WSIA, 1997 states that Section 28 applies with respect to a worker who sustains an injury that entitles him or her to benefits under the insurance plan. Therefore, this prevents workers who are entitled to benefits under the insurance plan from suing another employer who is also within the same Schedule 1.
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