Steven Stieber

The insured municipality suffered a catastrophic bacterial infection of its water supply, leading to investigations and a class action lawsuit.

The municipality's insurer appointed counsel to defend the civil actions under a reservation of rights.

Dissatisfied with the appointed counsel's advice and the reservation of rights, the municipality retained independent counsel and sought reimbursement from the insurer.

The Court of Appeal held that an insurer is only required to surrender control of the defence and pay for independent counsel if there is a reasonable apprehension of conflict of interest.

As the reservation of rights was based on policy limits and exclusions rather than the insured's conduct, no conflict existed.

The insurer was not obliged to pay for the independent counsel.

The appellants appealed a decision finding that a commercial general liability (CGL) policy provided coverage for an accident involving a supply truck.

An employee negligently left a steel base plate unsecured on the truck during a work site clean up, which later flew off and struck a school bus.

The Supreme Court of Canada held that the accident resulted from two concurrent causes: the negligent clean up of the work site (non-auto-related) and the negligent operation of the truck (auto-related).

The Court found that the CGL policy's automobile exclusion clause did not oust coverage for the non-auto-related negligence, as there is no presumption that all coverage is excluded when one concurrent cause is an excluded peril.

The appeal was dismissed.

The appellant employer appealed an order holding that it was not relieved from liability under the no-fault provisions of the Insurance Act after its employee, driving a leased vehicle in the course of employment, was involved in a motor vehicle accident.

The Court of Appeal held that an employer is not a person 'present at the incident' under s. 267.1(1) merely because its employee was involved.

However, the employer qualified as an 'other person' under s. 267.1(7), with the result that it was protected from vicarious liability for pecuniary loss caused by the employee and remained liable only for pecuniary loss arising from its own independent negligence.

The appeal was allowed and the order below was set aside.