Personal Injury News
By: Andrew Spurgeon
I write this update just as the summer is getting under way. It is a beautiful day. I am at the cottage, it is sunny, bright and warm. The lake beckons. What am I doing? I am writing this article about a fight between an insurance company and the Motor Vehicle Claims Fund (the Fund) as to who should pay SABS benefits to a victim of a hit and run pedestrian accident involving a taxi cab.1
The facts of the case were that a pedestrian was struck by a taxi cab in Toronto. The injured person reported that the taxi cab in the accident took off and that the taxi cab was a Beck Taxi which was easily identifiable by its trademark orange and green colour scheme. As well, the victim was able to get an identification number of the cab and reported it. Beck however denied that the specific cab identified was anywhere near the scene of the accident at the time it occurred. However, Beck failed to reveal which of its cabs, if any, were in the vicinity of the accident at the material time.
The injured person applied for SABS which the Fund paid – but did not think it should. The Fund which presumptively is responsible to pay pursuant to s. 268 (2) 2 (iv) of the Insurance Act, sought to place that burden upon Royal Sun Alliance (RSA) which issued Beck an SPF 6 policy.
The SPF 6 is not a form of sunscreen. It is a policy of insurance made available pursuant to s. 227 (in Part IX) of the Insurance Act. It provides insurance coverage to people who may be held liable for losses caused by motor vehicles that they do not own or drive. Beck does not own the cabs in its fleet. It does not employ the drivers of the cabs in its fleet. Beck is essentially a marketing, dispatch and logistics organization which cabs and drivers of those cabs affiliate for the purpose of organizing and attracting customers to the collective of approximately 850 cabs under its umbrella.
The Fund argued that the SPF 6 is a “motor vehicle liability policy” as defined in s. 1 of the Insurance Act. That section says:
“motor vehicle liability policy” means a policy or part of a policy evidencing a contract insuring,
(a) the owner or driver of an automobile, or
(b) a person who is not the owner or driver thereof where the automobile is being used or operated by that person’s employee or agent or any other person on that person’s behalf,
against liability arising out of bodily injury to or the death of a person or loss or damage to property caused by an automobile or the use or operation thereof;
It is to be noted that the section is silent on responsibility for paying SABS and is focused on liability protection for the insured.
An initial arbitration award was made in favour of the insurer, RSA. The thrust of the decision was that the SPF 6 is in essence a commercial general liability policy. It is focused on providing liability coverage for vicarious liability for businesses in circumstances where non-employees of the business, driving vehicles not owned by the business cause injury to others. The arbitrator specifically concluded that the obligation to pay SABS was not part of the scope of coverage provided in the SPF 6.
This decision was upheld by Myers J. on appeal as he in his conclusion stated:
“The issue then is one of law or mixed fact and law. I see no error, let alone a palpable or overriding error, in the Arbitrator’s decision that there was no evidence that Beck Taxis are driven by employees, agents, or on behalf of Beck. This is not a question that turns on the identification of any individual driver. It is simply a recognition that an SPF 6 CGL endorsement insurance is not a species of motor vehicle liability policy that are intended to carry SABS under the statutory scheme.”
So, the take-away from this case is that if a pedestrian is hit by an unidentified cab or other unidentified commercial vehicle, don’t be surprised that if you cannot identify the vehicle beyond its brand that the FUND is the source of the injured party’s SABS payments.
Andrew J. Spurgeon is a partner at Ross and McBride LLP. He is also an Elected Bencher of the Law Society of Ontario, and the Chairman of the Board of Directors LawPRO, which is the sole insurance company providing primary liability coverage to all 28,000 lawyers in private practice in Ontario.
He can be reached at:
Ross & McBride LLP
1 King St W, Hamilton, ON
Email: [email protected]
1 HMQ as represented by the Minister of Government and Consumer Services (Motor Vehicle Accident Claims Fund) v. Royal & Sun Alliance Insurance Company of Canada, 2021 ONSC 3922