Case information

Insurance — Insurer’s duty to defend — Allocation of defence costs —Insured’s disclosure obligations — Insurer’s right to assess coverage — How should courts allocate defence costs between insured and insurers of covered and uncovered claims extending over a lengthy period of time during which multiple policies were issued by different insurers — Can insured rely on privilege to frustrate insurer’s access to and use of information material to defence of claims in order to assess coverage — Applicable test and measures required to provide insurer access to defence material while protecting insured’s right to conflict-free defence — How insurer should manage information disclosed by insured to ensure compliance with good faith obligations?

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

Loblaw Companies Limited, Shoppers Drug Mart Inc. and Sanis Health Inc. are named as defendants in five class actions. Each was insured for the class periods but by different insurers providing general liability insurance for different parts of class periods, and variably by some excess liability insurers. They applied for pre-trial declarations, including that each is entitled to select a single insurance policy and require that the selected insurer must defend all claims, and that any insurer that wants to be associated in the defences and receive privileged defence information must enter a Defence Reporting Agreement requiring ethical screens in addition to any existing protocols they have. The applications judge granted the declaratory relief. The Court of Appeal allowed appeals in respect of allocating defence costs and held costs should be shared according to a pro rata time-on-risk calculation. It dismissed appeals against the Defence Reporting Agreement except in respect of its execution against two excess insurance providers.