Law Times

March 19, 2018

The premier weekly newspaper for the legal profession in Ontario

Issue link:

Contents of this Issue


Page 0 of 15

BY ALEX ROBINSON Law Times T he Ontario Court of Ap- peal recently took the rare step of convening a five- member panel to over- rule itself on whether an insurer could bring a claim on behalf of a bankrupt insured party. In Douglas v. Stan Fergusson Fuels Ltd., State Farm brought a claim against a company that al- legedly caused a contamination in 2008 after delivering oil to the property of Art and Wendy Doug- las, insured parties who owned a home in Kingston, Ont. The insurance company spent more than $800,000 remediating the property. After the defendant, Stan Fer- gusson Fuels, tried to have the claim summarily dismissed, the Court of Appeal found an insurer cannot commence a subrogated action on behalf of an insured when they are bankrupt. Lawyers say the decision could cause is- sues for counsel pursuing recovery claims on behalf of insurers in cer- tain situations. "At the time this action was commenced, the insured's cause of action had vested in his trustee in bankruptcy and the insured was an undischarged bankrupt. As a result, the insured lacked capacity to bring the action, and the insurer could not commence a subrogated claim in his name," Assistant Chief Justice Alexandra Hoy wrote in the majority deci- sion. Anne Juntunen, a partner with Lerners LLP, says the decision means that an insurer's subrogated rights to recover against an alleged wrongdoer is affected by the in- sured's actions after the time the insurance policy is entered into. Typically, the right of subroga- tion arises when an insurer makes a payment on a claim. The insurer could then take a subrogated interest and pursue an action in the name of the insured against whoever would be respon- sible for the loss. "What the decision means now is that insurers are affected by whatever their insureds might do or whatever might happen to their insurance," says Juntunen, who was not involved in the decision. Amy Pressman, one of the lawyers representing the appel- lants, says she requested the Court Tribunal dismisses LSO appeal against lawyer BY ALEX ROBINSON Law Times A tribunal dismissed an appeal brought by the Law Society of Ontario, which claimed a hearing panel was wrong to find a lawyer who was found in contempt of court had not committed profes- sional misconduct. In 2015, the Supreme Court of Canada found lawyer Peter Carey in contempt of court for having breached a freezing injunction when he returned a client's funds held in trust. Despite this ruling, a hearing panel subsequently found that the lawyer had not committed profes- sional misconduct as he did not in- tend to interfere with the adminis- tration of justice when he breached the court order. The law society appealed the hearing panel's, conclusion and a panel of four adjudicators with the Law Society Tribunal Appeal Divi- sion upheld the finding. " . . . [T]he Lawyer erred in judg- ment in returning trust money to his client in 2006, but did not engage in conduct that tended to disrespect or prejudice the admin- istration of justice in a manner that brought discredit upon the legal profession," said the decision in Law Society of Upper Canada v. Carey. The hearing panel's decision was a departure from a general rule that when a lawyer is found to be in breach of a court order and in contempt, it is normally enough to find they have committed profes- sional misconduct. Lawyers say the decision shows a contempt or- der will not always automatically result in a professional misconduct finding by the law society. Benjamin Zarnett, the lawyer who represented Carey in the ap- peal, says there is nothing in the decision that undermines the importance of lawyers having to comply with court orders and that the decision properly recognizes there can be unique circumstances DUTY COUNSEL NEEDED Too many lawyers not getting assistance P7 FOCUS ON Privacy Law P8 PM #40762529 $5.00 • Vol. 29, No. 10 March 19, 2018 L AW TIMES C O V E R I N G O N T A R I O ' S L E G A L S C E N E • W W W . L A W T I M E S N E W S . C O M LEGAL AID FUNDING Pressing needs exist for family law cases P5 See Decision, page 4 See Client, page 4 OCA overrules itself on insurance claims Anne Juntunen says a recent decision by the Court of Appeal could cause issues for lawyers pursuing recovery claims on behalf of an insurer in certain situations. Photo: Robin Kuniski Follow Lawyers say a Law Society Tribunal Appeal Division decision shows a contempt order will not always automatically result in a profes- sional misconduct finding by the law society. KEEPING PACE WITH THE CHANGING LEGAL COMMUNITY • an up-to-date alphabetical listing • contact information • legal and government contact information ORDER YOUR COPY TODAY! Call 1.800.387.5164 or visit for a 30-day no-risk evaluation CANADIAN LAW LIST 2018 Hardbound • Published February each year • L7798-7859 • On subscription $179* • One time purchase $199* Multiple copy discounts available * Plus shipping/handling and applicable taxes Untitled-2 1 2018-03-14 2:11 PM Legal News at Your Fingertips Sign up for Canadian Legal Newswire today for free and enjoy great content. Visit newswire-subscribe ntitled-3 1 2018-03-14 2:24 PM

Articles in this issue

Links on this page

Archives of this issue

view archives of Law Times - March 19, 2018