Canada: A Note About Notice Under The Insurance Act

We have previously written about the "new" BC Insurance Act and Insurance Regulation (the "BC Insurance Act") which came into force on July 1, 2012 after many years (see our paper entitled: Making the Transition to the New World Order). The Alberta Insurance Act and Fair Practices Regulation (the "Alberta Insurance Act") came into force on the same date. Both Acts contain very similar provisions and although there have not been many cases in BC decided under the new legislation, a recent Alberta case (Dhillon v. Anderson, 2014 ABQB 609) may be of assistance in determining how a BC Court would find on the issue of notice and limitation periods.

The BC Insurance Act imposes a two year limitation period for coverage enforcement actions against insurers and also requires insurers to provide written notice to a "claimant" of the applicable limitation period. We note that the definition of "claimant" under the BC Insurance Act is not as exhaustive as under the Alberta Insurance Act but does include a "judgment creditor" under s. 25. It is not so broad so as to include an unrelated third party as it does under the Alberta Insurance Act (s.5.3(1)(iii)). It is true under both Acts that if an insurer fails to provide the required notice, the running of the limitation period is suspended until the notice is given. Similar requirements are imposed by the Alberta Insurance Act. Neither the BC nor the Alberta legislation specify any other circumstances which suspend or extend the two year limitation period.

The above (although with respect to third party claimants) was recently addressed by the Alberta Court of Queen's Bench. In Dhillon, the plaintiff was injured in a motor vehicle accident in March 2011. The Alberta insurer made an immediate offer to settle the plaintiff's claim, which the plaintiff refused. During the course of subsequent negotiations between the parties, the insurer made various requests for medical documentation. In Dhillon, the Court held that an early offer to settle, requests for medical information, and ongoing negotiations do not operate to waive or suspend the running of the limitation period. The Court also held that the requirement to provide written notice to a claimant of the applicable limitation period does not apply to claims that were already in existence when the new legislation came into force.

On July 1, 2012, the Alberta Insurance Act came into force, requiring insurers to provide claimants with written notice of any applicable limitation period. This notice was not provided to the plaintiff. The parties failed to settle before the expiry of the two year limitation period and the insurer advised the claimant that his claim would be dismissed. The claimant then commenced an action against the insurer, advancing the following arguments:

  1. that the Fair Practices Regulation applied to claims that were under discussion before the regulation came into force. Consequently, the insurer should have advised the plaintiff of the applicable limitation period and its failure to do so extended the limitation period; and
  2. that the doctrine of promissory estoppel suspended the running of the limitation period while the parties negotiated a possible resolution of the claim.

The Court rejected both arguments. First, the Court held that the legislation is more than simply procedural as it imposes a new substantial obligation on insurers. As such, it does not apply retroactively and the insurer was under no obligation to provide the plaintiff with notice of the limitation period. Secondly, the Court held that promissory estoppel only applies where the plaintiff can establish that the insurer, by words or conduct, made a promise or assurance which was intended to affect the legal relationship between the parties and be acted on. Furthermore, the plaintiff would have to show that he acted in reliance of that promise. After examining the insurer's conduct, the Court concluded that merely making an early offer to settle and asking for medical documentation does not amount to the type of assurance or promise sufficient to extend the applicable limitation period. Such requests suggest that further settlement discussions are likely to be held and are not an admission of liability by the insurer. Accordingly, the plaintiff's claim against the insurer was dismissed as it was brought outside the limitation period.

We include the below chart as a reminder of the applicable provisions – in both the BC Insurance Act and Alberta Insurance Act.

Notice & extension of the limitation period

 

 BC Insurance Act

 Alberta Insurance Act

  • Section 23(1)(b) of the Act establishes a limitation period of "not later than 2 years after the date the cause of action against the insurer arose".
  • Section 4 of the Insurance Regulation, B.C. Reg. 403/2012 requires insurers to give written notice to a claimant of the applicable limitation period 1) within 5 business days of the denial of a claim, or 2) within 10 business days of the one-year anniversary of receiving notice of the claim, if the claim hasn't yet settled. The insurer is not required to provide notice if the claimant is represented by legal counsel.
  • Failure to provide the required notice under s. 4 of the Insurance Regulation has the effect of suspending the running of the limitation period until the notice is given.
  • Section 558(1) of the Act also establishes a 2-year limitation period from the date the cause of action against the insurer arose.
  • Effective July 1, 2012, s. 5.3(2) of the Alberta Fair Practices Regulation require insurers to give written notice to a claimant of the applicable limitation period within 60 days of becoming aware of a claim. The insurer is not required to provide notice if the claimant is represented by legal counsel.
  • Failure to provide the required notice under s. 5.3(2) of the Alberta Fair Practices Regulation has the effect of extending the applicable limitation period.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions