In Ontario, if an accident is caused by an illegally parked vehicle, the owner of the vehicle could be found liable pursuant to Rule 17(2) of the Fault Determination Rules

Two Ontario insurers disputed responsibility for accident benefit coverage.  The dispute was submitted to a private arbitrator who applied the Fault Determination Rules of Ontario and determined that the second insurer was responsible to pay the benefits.  The arbitrators decision was appealed to the Ontario Superior Court.

Application by the second party Insurer against the first party Insurer for appellate review of a decision of a private arbitrator finding the second party Insurer 100% responsible for the loss sustained by an Insured as a result of a motor vehicle accident.  The standard of review applied was one of correctness.  The Court determined that the arbitrator was correct in applying Ontario Rule 17(2) in determining that if an accident is caused by an illegally  parked vehicle the owner of the vehicle is liable for the accident.

ING Insurance Co. of Canada v. Farmers’ Mutual Insurance Co. (Lindsay), [2007] O.J. No. 2150, Ontario Superior Court of Justice, P.M. Perell J., May 31, 2007

The Insured’s vehicle collided with a tractor-trailer unit, which was illegally parked, so that it was obstructing the Insured’s path. Just prior to the collision, the Insured had attempted to pass the tractor-trailer on the driver’s side, but was unable to do so because of a vehicle approaching in the oncoming lane of traffic. The Insured’s son was seriously injured as a result of the accident and received statutory accident benefits from the insurer of the vehicle (the “First Party Insurer”).

The First Party Insurer then sought indemnity for payment of these benefits from the insurer of the tractor-trailer unit (the “Second Party Insurer”). The dispute was submitted to a private Arbitrator who concluded that the Second Party Insurer was 100% responsible for the Insured’s loss pursuant to the provisions in the “Fault Determination Rules”, enacted by Regulation under the Ontario Insurance Act. The arbitrator accordingly ordered the Second Party Insurer to indemnify the First Party Insurer to the extent that the latter had paid statutory accident benefits to the Insured’s son.

It was from this decision that the Second Party Insurer appealed to the Ontario Supreme Court. In reviewing the Arbitrator’s decision, the Court held that the appropriate standard of review was that of correctness. The issue before the Court was then whether the Arbitrator had correctly interpreted and applied the Fault Determination Rules to the facts of the case. In particular, the Arbitrator had concluded that the fact situation before him was not fundamentally different from what was contemplated by Rule 17(2). This Rule essentially provides that where an automobile is illegally parked, stopped or standing when it is struck by another automobile, and if the accident occurs outside a city, town or village, the driver of the illegally parked automobile is 100 per cent at fault and the driver of the other vehicle is not at fault for the incident. The Arbitrator reasoned that while the oncoming car did play some role in the Insured’s accident, it did not change the situation so fundamentally that the Rule ought not to apply.

The Ontario Superior Court found that the Arbitrator was correct in applying Rule 17(2) to determine the respective fault of the two Insurers and dismissed the Second Party Insurer’s appeal. However, the Court disagreed with the Arbitrator’s approach and his qualification that the Fault Determination Rules ought to be applied unless the fact situation is “fundamentally different” than that contemplated by the Rules. The Court noted that, having found as a fact that the tractor-trailer was illegally parked when it was struck by the Insured’s vehicle and that the accident occurred outside a city, town, or village, the criteria of Rule 17(2) were satisfied and there was no need for further analysis.

This case was originally summarized by Shanti Davies and originally edited by David W. Pilley.

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