In Ontario, a person injured in a motor vehicle accident does not have to seek compensation from third parties

An insured under the uninsured coverage provisions of Ontario’s standard O.A.P. 1 is only disentitled to recover under the uninsured coverage in O.A.P. 1 based on the negligence of an insured joint tortfeasor where the joint tortfeasor’s insurer admits liability to pay or where the insured obtained a judgment against the joint tortfeasor.

Loftus v. Robertson, [2009] O.J. No. 3458, August 21, 2009, Ontario Court of Appeal, W.K. Winkler C.J.O., J.M. Simmons and R.P. Armstrong JJ.A.

The issue on this appeal concerned the scope of the uninsured automobile insurance coverage under O.A.P. 1, the standard automobile insurance policy in use between 2001 and 2003 in Ontario.

The Insured was injured in a car accident in 2001.  While stopped at a red light, her car was struck by a car driven by the Defendant who was the owner and operator of an uninsured automobile.  After being chased by the police, the Defendant entered the intersection at high rate of speed, lost control of his vehicle, and collided with the Insured’s car.  The Insured sued the Defendant and her own Insurer under the uninsured coverage of her insurance policy.  Her Insurer brought Third Party proceedings against the police chief, the Police Services Board, and the Municipality but these parties were not sued by the Insured directly.

The Insurer appealed from an Order that it was obligated to compensate the Insured even though she had failed to sue the Third Parties.  The motion judge concluded that the Insurer was obligated to compensate the Insured even though she failed to sue the Third Parties.

The Court of Appeal held that the Insurer was liable to pay the Insured under the uninsured coverage provisions of her policy unless the Third Parties admitted that they were obliged to pay her or she obtained judgment against them.  The Insurer had attempted to rely on section 2(1) of the Uninsured Automobile Coverage Schedule which essentially provided that the Insurer was not liable to make any payment under the uninsured coverage provisions where a person insured under the contract was entitled to recover money under any valid policy of insurance other than money payable on death or where the person insured under the contract was entitled to recover money under the Third Party liability section of a motor vehicle liability policy.  The Court focused on the meaning of the phrase “entitled to recover money”.  The Court found that within the meaning of section 2 of the Schedule, the phrase means entitled to recover in fact.  Thus, the Court concluded that an insured would be disentitled from recovery under the uninsured coverage in O.A.P. 1 based on the negligence of an insured joint tortfeasor only where the joint tortfeasor’s insurer admits liability to pay or where the insured obtained a judgment against the joint tortfeasor.

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

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