In Ontario, an arbitrator has the jurisdiction to decide whether an insurance policy was properly terminated

The Court does not interfere with an arbitrator’s decision that an insurance policy had been properly terminated.

Lombard Canada v. Kent & Essex Mutual Insurance Co., [2008] O.J. No. 4314, Ontario Superior Court of Justice, R.W.M. Pitt J., October 30, 2008

This was an appeal from an arbitrator’s decision that Lombard Canada rather than Kent & Essex Mutual Insurance Co. was responsible for reimbursing the Ontario Motor Vehicle Accident Claims fund for more than $100,000 paid out to the injured driver.  Kent & Essex issued a policy to the driver and his wife for two vehicles.  The couple later separated and Kent & Essex had them listed as co-insured with two separate addresses.  The car driven by the injured driver was leased and Lombard Canada had provided an insurance policy to the lease company which would be used in the event that the driver allowed his insurance on the leased vehicle to lapse.  Kent & Essex cancelled the policy of the driver for non-payment and sent letters to both addresses on file and to the lease company.  The arbitrator found the policy had been properly cancelled and Lombard Canada’s policy was therefore in effect.  Lombard Canada argued that Kent & Essex had failed to comply with the statutory conditions for terminating a policy since the cancellation notices were sent to an address not listed on file.

The Court dismissed the appeal on the basis that the cancellation letters were sent to the correct address which was a factual finding of the arbitrator and not subject to appeal.  The arbitrator’s decision was reasonable since clear, written documentation of the cancellation existed.  Lombard Canada provided its insurance policy for specifically this type of situation.  Lombard Canada and Kent & Essex were held jointly and severally liable for repaying the fund and both companies were reprimanded by the Court for failing to indemnify the Ontario Motor Vehicle Accident Claims Fund when it was clear that it had no liability.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.

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