Our first case illustrates an old military principle: You can delegate your duties to others, but you can’t escape responsibility when things go wrong. A new form of tortious liability (the “non- delegable duty of care”) may be coming to Canada. Organizations that contract out key responsibilities to third parties (i.e. public organizations like hospital operators, educators, social services, etc.) may be directly liable for the acts of their independent contractors in the future.
Our second case deals with material change in risk under Homeowners insurance policies when a home is left ‘vacant’ or occupation is infrequent.
Lastly, the Canadian Broadcasting Corporation reports that changes are coming to the Prince Edward Island automobile insurance benefits, so that these benefits will fall in line with what is offered in the other two Maritime provinces.
Woodland v. Essex County Council  UKSC 66
This case is from the Supreme Court of the United Kingdom. Here, the Plaintiff started an action against the Defendant education authority for injuries she suffered during a swimming accident during school hours.
The Plaintiff, aged 10, was enrolled in a swimming class as part of her school’s physical education program. The Plaintiff went to the pool accompanied by a school teacher. The swimming lessons were contracted out to a private unincorporated business named “Direct Swimming Services”, and the business’ swimming instructor and life guard were responsible for these lessons. During a swimming lesson, the Plaintiff had difficulties and was found floating face-down in the water. She was resuscitated but suffered a serious hypoxic brain injury.
The Plaintiff started an action against the Defendant education authority directly under the doctrine of “non-delegable duty of care”. This doctrine states that there are certain duties that even when delegated to a third party for which the original party may remain liable. Any injuries the Plaintiff suffers as a result of the negligence of the third party still leaves the Defendant liable.
In the first hearing, the Defendant was successful in having the allegation of a non-delegable duty of care against it struck out, and the Plaintiff appealed.
The Court of Appeal reviewed case law in the U.K. and Australia and recognized that such a duty exists where the following 5 circumstances are present:
1. The Plaintiff is someone who is especially vulnerable or dependent upon the protection of the Defendant against the risk of injury. (e.g. a medical patient, or a child).
2. There is a relationship between the Plaintiff and the Defendant which places the Plaintiff in the custody, charge or care of the Defendant and from which can be imputed a positive duty to protect the Plaintiff from harm.
3. The Plaintiff has no control over how the Defendant chooses to perform its obligations.
4. The Defendant has delegated some function to a third party which is an integral part of the positive duty he or she assumed towards the Plaintiff and the third party is exercising the Defendant’s custody or care of the Plaintiff.
5. The third party has been negligent in the performance of the very function assumed by the Defendant and delegated to the third party.
In the case at hand, the Court of Appeal found that the Defendant had assumed a duty to ensure the Plaintiff’s swimming lessons were carefully conducted and supervised. In the circumstances, the non-delegable duty of care applied. If the third party was negligent, liability would rest with the Defendant. The Court of Appeal allowed the appeal and permitted the Plaintiff to advance her claim of non-delegable duty of care against the Defendant at a future trial.
Peebles v. Wawanesa Mutual Insurance Co., 2013 BCCA 479
n this case, the Plaintiffs were two friends who owned a home jointly in Surrey, British Columbia. The home was insured under a homeowners policy issued by the Defendant. Sometime in late 2007, the Plaintiff’s decided to sell the home.
One Plaintiff, Mr.Peebles, lived elsewhere but checked on the home a few times a week. The second Plaintiff, Mr. Quinn, worked three weeks at a time in the Northwest Territories, followed by one week off which he spent in British Columbia. Mr. Quinn had an “on and off” relationship with his girlfriend. While his relationship was on, he would stay at his girlfriend’s home, returning back to his house when his relationship was off.
On April 26, 2008, a fire damaged the Plaintiffs’ home. The Plaintiffs filed a Proof of loss. The Defendant denied coverage on the basis that a material change in risk had taken place as the property was “vacant”.
By the date of the fire, most furniture had been removed from the home and the only items remaining were one or two hutches, a sleeping bag, an alarm clock, a shop vac, a few tools, a few personal items, clothing and food. In the 30 days prior to the fire, the second Plaintiff Quinn had spent at least one night at the home.
The Trial Judge found for the Defendant, stating that there was a material change in risk because the “nature of the occupancy had changed dramatically”due to the reduced occupancy of the home. The trial judge did not find that the home had been vacant, merely that the reduced nature of the occupancy affected the risk to the insurer and would have affected the premiums had the insurer been aware. The Plaintiffs appealed.
The Court of Appeal overturned the trial judge’s decision, entering judgment for the Plaintiffs. The Court of Appeal found that it was bound by an earlier decision of the British Columbia Court of Appeal. Since all policies have a statutory condition protecting an insurer from liability for loss occurring when a building was “vacant or unoccupied for more than thirty consecutive days” this meant that the insurer should be said to have accepted the risks associated with a vacancy for a period of thirty days or less, no matter how infrequently the home is occupied.
The Court of Appeal reviewed the Trial Judge’s decision and noted that the Trial Judge found that the home had not been “vacant”. The Court of Appeal also pointed out that a period of vacancy of thirty days was not per se a material change in risk. If the policy allowed a vacancy of up to thirty days, that it had to permit reduced occupancy within that 30 day period as well.
CHANGES TO THE P.E.I. MINOR INJURY CAP ANTICIPATED
The Canadian Broadcasting Corporation is reporting changes will be coming to automobile insurance benefits on Prince Edward Island.
The proposed changes would lift the $2,500 minor injury cap to $7,500, along with changes to the definition of what constitutes a minor injury. Changes are also anticipated to a number of no-fault insurance payouts, including for medical and rehabilitation expenses, and for loss of income. In particular, medical and rehabilitation payouts would increase from $25,000 to $50,000, and loss of income payments from $140 a week to $250 a week.
The text of the full story can be found here:
http://www.cbc.ca/news/canada/prince-edward-island/p-e-i-to-raise-cap-on- auto-insurance-pay outs-1.2436228