The Newfoundland and Labrador Court of Appeal recently affirmed
the test for confirming a cause of action and thus resetting a
limitation period under the NL Limitations Act. Insurers
dealing with NL claims can be reassured that payments made in the
course of investigating claims, such as payments for medical charts
and reports, won't be considered "a payment in respect of
that cause of action", and won't typically confirm a cause
of action and thus reset a limitation period. However, insurers
should be mindful that payments for lost wages and/or allied health
costs might be treated differently. To minimize the ability of a
party to later argue that an insurer reset her limitation period,
any such payments made before a Statement of Claim is issued should
be on a "without prejudice" basis. They also should be
accompanied by a statement to the effect that they should not be
construed as confirming a Plaintiff's cause of action or
waiving any limitation period.
The facts in Tuck v. Supreme Holdings were simple. On
December 28, 2009, Ms. Tuck was involved in a motor vehicle
collision and allegedly sustained injuries. Her Statement of Claim,
though, wasn't issued until February 28, 2012 –
approximately two months after the expiration of the two year
limitation period. On account of this, the Defendants' insurer
refused to deal with her claim on the basis it was statute-barred.
Ms. Tuck, however, claimed the Defendants "reset" the
limitation period by confirming her cause of action pursuant to
section 16(1)(b) of the NL Limitations Act. If this
was correct, her Statement of Claim was issued in time. Under
section 16(1)(b), a confirmation of a cause of action occurs where
a person "makes a payment in respect of that cause of action,
right or title of another."
The evidentiary record for both the initial Rule 38 Application
and the later Appeal was limited because Ms. Tuck's original
lawyer's paper file was destroyed by fire and the
Defendants' insurer's file couldn't be located. The
Court of Appeal considered the following facts:
Tuck's lawyer wrote to a named
representative of the insurer on April 9, 2010, in correspondence
marked "without prejudice", advising he was in possession
of a doctor's report concerning Ms. Tuck that he would be
pleased to forward upon receipt of the doctor's fee plus
The Defendants' insurer
subsequently forwarded a cheque in payment for the report that the
law firm receipted on May 21, 2010.
Tuck's lawyer forwarded the
medical report to the insurer on that date or shortly after.
On August 4, 2016, the Court of Appeal affirmed that when a
party establishes "confirmation" by the other, the
limitation period is "reset" and runs from the date of
that confirmation. The Court also concluded that an admission of
liability is not required for confirmation under section 16(1)(b)
and payment for a medical report in the context of a personal
injury action is not a payment "in respect of that cause of
action" within the meaning of that section.
No admission of liability required. Section
16(1)(b) does not require an admission of liability to constitute
confirmation even though the Supreme Court of Canada previously
held that a written admission of liability is required to
constitute acknowledgment in section 16(1)(a) of the Act (Ryan v. Moore).
Payment relates to handling of claims, not in respect of
a cause of action. The Defendants' insurer's
payment for the medical report was not "a payment in respect
of [her] cause of action" within the meaning of section
16(1)(b). The Supreme Court of Canada previously explained that the
purpose of such a payment is to promote investigation and early
resolution of certain aspects of a claim, not to indemnify (Ryan v. Moore). The Court of Appeal added
that both insurers and plaintiffs require medical and other
information: insurers to set their reserves and responsibly handle
claims of and against their insureds, and plaintiffs to evaluate
and prosecute their claims. The related expenses are "costs
related to the handling of claims, not payments in respect of a
cause of action". The overall purpose of obtaining medical
information respecting a claimant or a potential claimant in a
personal injury action is investigatory, and absent unusual
circumstances, actions taken to investigate claims, without more,
should not operate to alter the applicable limitation
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.
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