Insurance Law can

Subrogation

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  There was talk of using the terrible swift sword of the law drawing blood from abusive companies, rogue files, rogue claims managers, all aided and abetted by counsel who misunderstood their duties as officers of the court
  
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    One such rogue who was villified was Chris Porter of Pilot Insurance.
    
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  Did you ever wonder about the people involved, the lawyers, the claims management staff, the company, some of whom were encouraged by the SCC to seek other employment not calling for standards of good faith behaviour?
  

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  As for the company, it was sold as a subsidiary to Aviva.
  
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  As for Chris Porter, it appears to have pretty well destroyed his career. Attached is the article form Business Edge.
  
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    Since leaving Pilot in 2000, he has been engaged in his own litigation, attempting to restore his reputation, collateral damage you might say. He claims that he was not responsible for the decision to deny the claim.
    
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    Counsel wrote to the SCC who issued a revised judgment properly saying that Porter was the senior claims examiner, and not the senior claims manager. The Court would go no further as the evidence was not put before the lower court.
    
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    He sued a law firm for defamation, which lawsuit was settled on the third day of trial after extensive litigation. (His defamation action was summarily dismissed, but then he successfully appealed to have the case go to trial.)
    
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  Porter says he was treated like a leper by the insurance industry.
  
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    He had difficulty finding counsel to take his case. The settlement did not pay his legal costs.
    
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    After the SCC decision came down, the insurer he was working for let him go. He turned to his family for financial support.
    
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    Now a private investigator, the insurance industry and the legal industry are still reluctant to send him work.
    
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  The comment from the Insurance Bureau of Canada is that, from their perspective, he doesn't exist.
  
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  And yet, from his perspective, his case was never presented. "My role was completely opposite from what was described in the reasons for judgment."
  

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  As always, look at the wording and the legislation. What do they provide?
  
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  M. Subrogation
  
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    “We will be entitled to assume all our rights of recovery against others and may bring action in your name to enforce these rights when we make payment or assume liability under this policy.”
    

Brown:

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  An insurer’s rights are derivative
  
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    They can stand in no better position than the insured – i.e. if insured has no claim, neither does the insurer
    
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  Basic principle of indemnity: an insured should receive no more than the loss.
  
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  Common law modified by statute and contract.
  
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    Rights can arise through torts or contract.
    
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  Rights can be restricted by implied or express covenants to insure:
  
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    Subrogation rights are waived where there is implied or express covenants to insure
    
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      E.g. landlord’s insurer cannot have subrogation rights against tenants if latter burns down apt
      

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  SCC Trilogy of Decisions: dealing with subrogation w.r.t. lease agreements, Brown, 13-8
  
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    Cummeryonge Investments Ltd v Agnew Surpass Shoe Store: lease provided that landlord had to insure property against risk or loss of damage caused by fire, tenant was obliged to care for property except for reasonable wear and tear… and damage to building caused by perils that lessor was obliged to insure. This exception to tenant’s obligation to maintain property was sufficient to preclude action by landlord against tenant, even when latter was negligent, no right to subrogation
    
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    Ross Southwood Tire Ltd v Pyrotech Products: lease required tenant to pay insurance premiums on policy taken out by landlord. After fire caused by tenant’s negligence, insurer sought to bring action by way of subrogation against tenant. Subrogation denied since lease put the risk with landlord. Also, because tenant paid for insurance, he should’ve been entitled to benefit of it. Landlord + tenant treated as joint insureds
    
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    Smith v T Eaton Co: landlord obliged to insure, this effectively removed from the tenant the risk of liability for fire resulting from his negligence and bringing the risk under insurance coverage
    
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  Where a lease contains terms allocating obligation to insure premises, either to landlord or tenant, an agreement to remove any right of action between parties for damage caused to the property may be inferred
  
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    In these cases, there is no right to which insurer may be subrogated
    
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    But this depends on the terms of the lease
    

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  Historically, subrogation only arose where insured fully indemnified
  
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    No longer the law per contract and statute
    
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  There are bilaterial duties of utmost good faith: both the insured and the insurer must protect the claims of one another