Insurance Law Blog
Knowledge Centre

Insurer found to have breached duty of utmost good faith by volunteering information from insured’s statement to the police

August 10, 2021

Insurance law – Automobile insurance – Good faith – Statutory provisions – Damages – Punitive damages – Duties and liabilities of insurer – Actions – Criminal acts

Barata v. Intact Insurance Co., [2021] A.J. No. 736, 2021 ABQB 419, Alberta Court of Queen’s Bench, May 28, 2021, G.S. Dunlop J.

The insured sought damages from her automobile insurer and an employee of the insurer for breach of duties pursuant to the investigation of an automobile collision.

The insured and her husband were in her vehicle when it struck and injured the pedestrian. They stopped their vehicle to speak to the pedestrian’s companions but later left the scene without waiting for police to arrive. That day, the police attended at the insured’s home and arrested the insured’s husband on the assumption that he was the driver.

The insured reported the collision to the insurer and the employee was assigned to investigate the claim. The insured reported in her statement to the employee that she, not her husband, was the driver at the time of the collision. The employee volunteered this information to the police and the police later charged the insured with failing to stop, provide her name and address, and offer assistance to the pedestrian. The insured alleged the insurer and the employee breached duties owed to her by volunteering the information she provided to police.

The Court found that the insurer and its employee did not owe the insured a duty of confidentiality with respect to the information she provided. The Court rejected the insured’s argument that her obligation to provide all available particulars pursuant to statutory condition 3 created a reciprocal duty on the insurer to keep the information she provided confidential.

The Court found that an insurer’s duty to investigate a claim in utmost good faith includes what the insurer does with the information it obtains during that investigation. An insurer may be reasonably justified in disclosing some or all of an insured’s statement to the police, particularly if it is for the purpose of seeking information to assist with the insurer’s investigation of a claim. Disclosure that does not further the insurer’s investigation is not reasonably justified and constitutes a breach of the duty of utmost good faith to an insured.

In this case, the Court concluded that the employee’s disclosure to the police was not reasonably justified as it did not provide further information for the investigation of the plaintiff’s claim. Therefore, the court found that the insurer and its employee breached the duty of utmost good faith to the insured. However, the disclosure did not result in damage to the insured as this was just one source of information for the police to charge the insured. The insured’s husband had also disclosed that the insured was the driver at the time of the collision. The Court declined to award punitive damages to the insured as the employee’s disclosure was not reprehensible conduct and also did not cause the plaintiff harm.

This case was digested by Dominic Wan, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Dominic Wan at [email protected].

To stay current with the new case law and emerging legal issues in this area, subscribe here.

Tags

Important Notice: The information contained in this Article is intended for general information purposes only and does not create a lawyer-client relationship. It is not intended as legal advice from Harper Grey LLP or the individual author(s), nor intended as a substitute for legal advice on any specific subject matter. Detailed legal counsel should be sought prior to undertaking any legal matter. The information contained in this Article is current to the last update and may change. Last Update: January 16, 2024.

Related

New benchmark for damages for injury to dignity for sexual harassment
New benchmark for damages for injury to dignity for sexual harassment New benchmark for damages for injury to dignity for sexual harassment
Damages Awarded Under Intimate Images Act
Damages Awarded Under Intimate Images Act Damages Awarded Under Intimate Images Act
Retail Case Update: The Court’s View on Post-Accident Remedial Measures – Are They Determinative of Liability?
Retail Case Update: The Court’s View on Post-Accident Remedial Measures – Are They Determinative of Liability? Retail Case Update: The Court’s View on Post-Accident Remedial Measures – Are They Determinative of Liability? Retail Case Update: The Court’s View on Post-Accident Remedial Measures – Are They Determinative of Liability?
The Dangers of Two Step Offers
The Dangers of Two Step Offers The Dangers of Two Step Offers
Court says federal political parties are subject to BC privacy legislation
Court says federal political parties are subject to BC privacy legislation Court says federal political parties are subject to BC privacy legislation
Court Grants Interim Injunction to Restrain Employees from Competing with their Former Employer
Court Grants Interim Injunction to Restrain Employees from Competing with their Former Employer Court Grants Interim Injunction to Restrain Employees from Competing with their Former Employer
Harper Grey Lawyers complete Mental Health First Aid Certification
Harper Grey Lawyers complete Mental Health First Aid Certification
Defining the Scope of the Cost Recovery Action Under BC’s Environmental Management Act
Defining the Scope of the Cost Recovery Action Under BC’s Environmental Management Act Defining the Scope of the Cost Recovery Action Under BC’s Environmental Management Act Defining the Scope of the Cost Recovery Action Under BC’s Environmental Management Act
Roshni Veerapen elected as Vice Chair of the Health Law Section
Roshni Veerapen elected as Vice Chair of the Health Law Section Roshni Veerapen elected as Vice Chair of the Health Law Section
Court of Appeal finds insurer has duty to defend insured in claim arising from leak of liquid chlorine from its premises despite pollution liability exclusion
Court of Appeal finds insurer has duty to defend insured in claim arising from leak of liquid chlorine from its premises despite pollution liability exclusion Court of Appeal finds insurer has duty to defend insured in claim arising from leak of liquid chlorine from its premises despite pollution liability exclusion Court of Appeal finds insurer has duty to defend insured in claim arising from leak of liquid chlorine from its premises despite pollution liability exclusion
National Indigenous History Month
National Indigenous History Month
Emilie LeDuc appointed to the British Columbia Law Institute Board of Directors
Emilie LeDuc appointed to the British Columbia Law Institute Board of Directors Emilie LeDuc appointed to the British Columbia Law Institute Board of Directors
William Clark and Kara Hill present at the 2024 Self Governing Professions CLE
William Clark and Kara Hill present at the 2024 Self Governing Professions CLE William Clark and Kara Hill present at the 2024 Self Governing Professions CLE William Clark and Kara Hill present at the 2024 Self Governing Professions CLE
A party’s deliberate decision not to attend a hearing does not render that hearing procedurally unfair
A party’s deliberate decision not to attend a hearing does not render that hearing procedurally unfair A party’s deliberate decision not to attend a hearing does not render that hearing procedurally unfair
Harper Grey’s New Website Recognized by Hermes Creative Platinum Website Award
Harper Grey’s New Website Recognized by Hermes Creative Platinum Website Award
arrow icon

Subscribe