Case Study: Decision on Dependency in a Priority Dispute

The Court of Appeal released a new decision on dependency in a priority dispute between Intact and Allstate, linked below. The Court of Appeal held that the claimants, a woman (Paula) and her two children, who moved in with Paula's boyfriend (Kyle) only seven weeks before the accident, were principally dependent on Kyle at the time of the accident. Kyle, who was Allstate's insured, paid for at least 64% of the claimants' financial needs during the seven weeks before the accident. The finding of dependency meant that Allstate was responsible for the payment of accident benefits to the claimants.

The Court of Appeal upheld the Superior Court decision which overturned the decision of the Arbitrator. The Court of Appeal disagreed with the Arbitrator's approach which focused on whether the fairly recent romantic relationship between Paula and Kyle is likely to be a permanent one.

...what time period accurately reflects the true nature of the particular relationship at issue at the time of the accident.

When conducting a dependency analysis in a case involving a changing environment, the case law requires a determination as to the appropriate time period for the evaluation of dependency. Too narrow a time frame may produce only a "snapshot" of the circumstances, which may be misleading. The appropriate question is what time period accurately reflects the true nature of the particular relationship at issue at the time of the accident.

The Court of Appeal found that the seven-week period in this case accurately reflects the nature of the relationship between the claimants and Allstate's insured and was not merely a "snapshot." The relationship was new but real and the parties intended it to be a permanent one.

For insurers looking to shift priority based on dependency, it is critical to conduct a thorough investigation of the insureds' relationships. The analysis remains factually driven.

Read the full case decision on the Ontario Court's site.

Court of Appeal Decision on Dependency in a Priority Dispute

Dealing with New Relationships

...what time period accurately reflects the true nature of the particular relationship at issue at the time of the accident.