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Do Excluded Drivers have access to AB Coverage? See Court of Appeal Ruling

Domenic D. Nicassio
Domenic D. Nicassio
Associate Lawyer

February 2018

By Domenic D. Nicassio

A recent Court of Appeal decision1 has clarified two issues that are of relevance to insurers involved in priority disputes.

Both appeals involved individuals who were claiming accident benefits although they were listed as excluded drivers in their parents' policies.

The first issue relates to whether excluded drivers in a household may be entitled to accident benefit coverage from the insurers who issue the given policy.

The second issue relates to what is the appropriate standard of review for an insurance arbitrator's decision involving specialized expertise.

Case No. 1

Mr. Rupolo was injured while riding as a passenger in his girlfriend's car. The car was insured by State Farm. Mr. Rupolo applied to his parents' insurer, The Dominion, for accident benefits. The Dominion took the position that Mr. Rupolo was not an “insured person” for the purposes of the SABS as he and his parents had previously signed an Excluded Driver Endorsement due to his poor driving record. The form indicated that Mr. Rupolo would have no coverage if he drove either of his parents' vehicles:

except for certain accident benefits, there would be no coverage under the policy for property damage and bodily injury, damage to the automobile(s) and most accident benefits...”2

The arbitrator interpreted this to mean that there could be accident benefit coverage. The SABS legislation was to be given a broad and liberal interpretation, and any ambiguity would be resolved in the claimant's favour:

“...there is sufficient ambiguity to an individual reading the OPCF 28A to think there would still be full accident benefits if not driving the excluded vehicle and even limited accident benefits if driving the excluded vehicle.”3 long as he was not injured while driving one of the vehicles in respect of which he was an excluded driver.

The arbitrator concluded that Mr. Rupolo was entitled to accident benefits from The Dominion as long as he was not injured while driving one of the vehicles in respect of which he was an excluded driver. If he was a passenger in someone else's vehicle or simply a pedestrian, he would be entitled to claim accident benefits from his parents' insurer.

Dominion appealed the arbitrator's decision to the superior court, which concluded that Mr. Rupolo was not an insured person. The superior court judge applied a standard of 'correctness'.

Case No. 2

Another case involving similar circumstances was launched by a claimant named Mr. Bortolus, who was driving an uninsured motorcycle. Mr. Bortolus was involved in an accident with a vehicle insured by Belair. He applied for accident benefits to Belair, although his parents had a policy with The Dominion. Like the claimant in the first appeal, Mr. Bortolus was an excluded driver under the policy with The Dominion. Although disagreeing with the result and analysis in the first arbitral appeal, the arbitrator ruled that he was bound to follow the outcome in Mr. Rupolo's case that no accident benefit coverage was available.

Based in part on the view that the judge applied the wrong standard of appeal, both decisions were overruled by the Court of Appeal. The Court of Appeal's decision effectively means that the insurer that issued the policy to the parents of each claimant is the priority insurer.

While noting that a correctness standard is acceptable in relation to general issues of law, the Court of Appeal noted that a ‘reasonableness' standard should have applied given the special expertise of the given arbitrators:

The arbitrators were not simply analyzing a standard form contract in isolation. Rather, they were required to apply their specialized expertise to evaluate each SABS claim in the context of the home statute ... neither appellant has identified an ‘exceptional' question that would serve to rebut the reasonableness standard. As such, the appeal judges were required to review the arbitral decisions in both cases from a deferential posture, to consider whether each decision fell within a range of reasonable outcomes.”4

In the context of an arbitral decision, a standard of reasonableness means that as long as the process and the outcome fit comfortably with the principles of justification, transparency and intelligibility, it will not be open for reconsideration on appeal.

Although coverage may be excluded for the driver in respect of involvement with a specific vehicle, the individual may still access accident benefits if he or she is injured in another vehicle or even as a pedestrian.

1 The Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company, 2018 ONCA 101.
Ibid. at para. 8.
3 Ibid. at para. 11.

4 Ibid. at para. 53 and 55.


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