The Ontario Court of Appeal has again confirmed that an
insurer's contractual right to control a defence must yield to
the interests of its insured where its coverage position creates a
reasonable apprehension that defence counsel would be in a conflict
In Hoang v. Vicentini, the Ontario Court of Appeal
ordered an insurer to relinquish control over the defence of its
insured and pay for the insured's independent
counsel.1 The Court confirmed that if a fact affecting
your coverage is disputed in the underlying litigation, a conflict
of interest arises.
The decision in Hoang v. Vicentini was the result of a
chambers motion to remove counsel due to a possible conflict of
The underlying litigation was based upon tragic circumstances.
Can Hoang, the insured, dropped off his son, Christopher, at the
intersection of Queens Quay and Yonge Street in Toronto, Ontario.
Unfortunately, Christopher's hat blew off and he chased it into
the intersection. Christopher was severely injured when he was
struck by a vehicle.
Christopher (by his litigation guardian) sued his father as well
as the driver and the owner of the vehicle that struck him. The
action was tried before a jury which found Mr. Hoang solely
responsible. The action against the driver and owner of the vehicle
As part of the decision, the jury specified that Mr. Hoang's
negligence included his "unsuitable choice of unloading
area." On the basis of a prior decision of the Court, Justice
Laskin recognized that this finding of fact could give rise to
coverage under Mr. Hoang's liability policy.2
The plaintiff launched an appeal of the decision seeking to
overturn the dismissal as against the driver and owner. Mr.
Hoang's counsel responded with a notice of cross-appeal on his
behalf requesting the court set aside all particulars of
negligence, including his "unsuitable choice of unloading
Justice Laskin recognized that, for Mr. Hoang, a decision
overturning the finding of "unsuitable choice of unloading
area" yet leaving in place the findings of negligent parental
supervision, would be a disastrous result. He would be left without
any prospect of indemnification and his son would be left without
any hope of recovery.
Relying on an earlier decision of the Court in Brockton
(Municipality) v. Frank Cowan Co., Justice Laskin confirmed
that where a conflict of interest arises, the insurer may be
required to relinquish control of the defence and pay for
independent counsel for its insured.3 To that end,
Justice Laskin recognized that while "not every potential
conflict ... requires the insurer to yield the right to control the
defence", an insurer is required to yield where there is
"a reasonable apprehension of conflict".4
Justice Laskin held that the conflict was "readily
apparent". He held that a reasonable bystander might think
that counsel appointed by the insurer would focus on overturning
the one finding for which the insurer could be liable to indemnify
the insured. Justice Laskin noted that this finding was not
intended to impugn counsel's integrity, but that
"appearances count". The test is not "actual"
conflict but the "reasonable apprehension" of
Because that appearance was alive in the case before him,
Justice Laskin ordered the insurer to be added as a party to the
appeal, to yield control of Mr. Hoang's defence, and to pay for
his independent counsel.
The conclusion in Hoang v. Vicentini is short, clear,
and effective. Here, the Ontario Court of Appeal has confirmed that
an insurer's right to control a defence is not sacred. Defence
counsel's primary obligation is to the insured and this takes
primacy over the interests of the insurer. This decision dispels
the suggestion that defence counsel must evenly balance the
interests of the insured and insurer when defending a case. Where
the insurer's interest comes into conflict with the
insured's, and where that conflict is an issue in the
litigation, independent counsel is necessary to safeguard the
1. Hoang v. Vicentini, 2015 ONCA
2. Ibid at para. 8. See also Lefor
(Litigation Guardian of) v. McClure (2000), 49 O.R. (3d) 557
3. Brockton (Municipality) v. Frank Cowan Co.
(2002), 57 O.R. (3d) 447 (C.A.).
4. Hoang at para. 16.
5. Ibid at para. 17.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In the recent case Routh Chovaz Insurance Brokers Inc. v. Aviva Insurance Company of Canada, 2016 ONSC 2567, the court granted summary judgment to Aviva, dismissing an action brought by an insurance broker...
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