An Insurance Law Update
by Jon Rossall, Partner
The Alberta Court of Appeal issued written reasons today explaining its refusal to issue a Stay pending Appeal of the Trial Judge’s decision striking out the Alberta Insurance Act Minor Injury Regulation (Morrow v. Zhang, 2008 ABQB 125). Readers will recall that the impact of the Trial Judge’s decision was to strike down the $4,000 cap on non-pecuniary damages for minor injures as defined in that Regulation. The Trial Judge had denied an earlier application for a Stay, on the basis that there was no evidence of “irreparable harm”, nor did the balance of convenience favor the granting of a stay. (See previous McLennan Ross Alert Minor Injury Regulation Stay Application.)
Before the Court of Appeal, a broad Stay was sought, one which would stay all claims for damages that might otherwise be captured by the cap or, in the alternative, an order staying enforcement of any such judgment pending the hearing of the appeal.
While the parties agreed that the first part of the traditional test for a Stay was met – that there was a serious issue to be resolved – there was significant disagreement as to whether irreparable harm would arise should the Stay not be granted, or whether the balance of convenience favored the granting of the Stay. The Court of Appeal ruled that, with regards to the Applicant’s argument that the uncertainty created by the situation would impact on rate hearings before the Alberta Insurance Review Board, such uncertainty had existed since the litigation commenced in October of 2004, and the AIRB was alive to the issues. In response to the suggestion that settlement of pending claims would be delayed or impacted without a stay, the Court indicated that insurers could not be forced to settle at amounts higher than the cap in the interim, so there was no such impact. Further, the Court found that there simply was no evidence of claims that are, or about to be tried between now and the date of the Appeal that would be impacted by this presence of the decision.
Finally, while the Court understood the concern raised regarding the potential of limitation periods to expire in the interim, there was no power to grant a blanket “suspension” of the operation of the Limitations Act.
The Court of Appeal went on to say that even if irreparable harm had been proven, it would have denied the Stay on the same basis as the Trial Judge – that a Stay would perpetuate the stereotypes of persons suffering from so-called “minor injuries” and the Court should consider the interests of those persons, as well as the general interests of the public in not impacting further on Charter rights.
The appeal is scheduled to be argued in September of this year.
This alert is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Alexis Moulton at amoulton@mross.com or Dave Risling at drisling@mross.com, or any other member of our Insurance Practice Group for further advice on this or any other Insurance Law matter. |
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