If you have hired an individual, such as a lawyer, accountant, doctor or insurance broker, to provide you with a professional service, and that person fails to provide that service to your satisfaction or causes you harm via how they carry out their duties, then you are entitled to bring a claim against such a person for professional negligence.
As noted above, such claims may arise about any professional hired to provide a service they are legally licensed or otherwise entitled to. Once a person establishes that they may have a claim of professional negligence against an individual in that they either did not perform the service they were hired to perform or performed such service negligently, they must consider how they will prove the claim.
In this blog, we review the steps to prove an insurance broker’s professional negligence successfully.
In the Aftermath of a Car Accident, a Claim for Professional Negligence Arises
The case of Carriere de Davide v Westland Insurance Group Ltd. arose due to a motor vehicle accident in July 2016. The plaintiff, on the date in question, had been a passenger in one of two car accidents. The driver of the vehicle in which the plaintiff was a passenger was at fault for the accident. The plaintiff suffered serious injuries as a result of the accident (including a severe traumatic brain injury, various bone fractures in his neck, shoulder, spine, chest and pelvis, a sprained ankle, and lacerations of his kidney, liver, spleen, bowel and colon), for which he sought compensation in relation to paying expenses related to his care and damages. The plaintiff was hospitalized for five months before he was allowed to return to his home, and he received extensive treatment, including physiotherapy, occupational therapy, visual and speech therapy, kinesiology and counselling, in the months and years after the accident.
As the vehicle driver that caused the accident was underinsured and carried only $200,000 in third-party liability insurance, the plaintiff turned to his auto insurance policy to cover the discrepancy in what he required to address the damages and injuries he had suffered. Unfortunately for the plaintiff, the policy which he had obtained from the defendants, Westland Insurance Group Ltd. (“Westland”), included only $1 million worth of basic underinsured motorist protection (“Basic UMP”). Nearly $560,000 was deducted from this amount to account for ICBC rehabilitation benefits, past and future total temporary disability benefits and the plaintiff’s prorated share of the at-fault motorist’s third-party liability coverage. As a result, the plaintiff received approximately $665,000 in compensation from ICBC ($90k from at-fault motorist’s third-party liability policy, $91k from future total temporary disability benefits, $43k from Part 7 rehabilitation funds and $440k from the plaintiff’s UMP Policy), which was well short of what the plaintiff estimated his actual losses as a result of the accident to be.
Upon realizing that he could not recover sufficient damages to pay for all his losses, the plaintiff commenced a claim in professional negligence against Westland “for not having properly counselled him about the benefits and costs of Excess UMP coverage.” The plaintiff claimed that, although he could not recall his conversation with a Westland representative, “if he had understood that he could get an extra $1 million worth of UMP for just $25. Because he did not buy it, he surmises that the agent must not have offered and sufficiently explained it to him. Therefore, he argues that Westland should be found liable for its agent’s negligence”.
The Plaintiff’s Post-Accident Circumstances
Although the plaintiff had not been able to undertake any paid work since the accident, he had made two attempts at volunteer work: one at a golf course in 2018, which involved cleaning the yardage of the plaintiffs for three hours once per week in which he engaged for only one summer, and; one which involved the provision of cleaning and laundry services at a sports complex, in 2019, for two hours per week, in which the plaintiff engaged for less than one year. The plaintiff found the tasks associated with each position too taxing, so he had not sought a volunteer position since 2019.
While the plaintiff had regained his mobility in the years after the accident, he tires easily and is unable to participate in any of the sports he had previously enjoyed, such as skiing, mountain biking, softball and hockey. Although still able to occasionally play golf, the plaintiff can only play nine holes at a time. The plaintiff’s social life had changed plaintively from his pre-accident existence, as he went from an extremely extroverted and sociable person to one who “rarely interacts with anyone other than his roommates.”
The Legal Principles Applicable to Claims of Insurance Broker Professional Negligence
There are four elements that a plaintiff must prove, on the balance of probabilities (i.e., to a certainty of 51 per cent) to be successful in a claim of broker’s professional negligence:
- that the broker owed the plaintiff a duty of care
- that the broker’s behaviour breached the standard of care
- that the plaintiff suffered damages of some kind
- that the damages suffered were caused, in fact, and in law, by the broker’s breach
When determining whether the broker’s behaviour breached the standard of care (point two), the court will undertake a three-part assessment: first, it will make a factual determination with respect to what happened on the date of the purchase of the insurance policy under review; next, the court will determine the standard of care that is applicable in the circumstances, and; finally, the court will assess whether the broker’s behaviour fell below the standard of care.
As to the standard of care owed by an insurance broker to clients, the courts have determined that the insurance broker’s duty of care includes the following:
- “the insurance broker has a stringent duty to provide the customer with information, counsel, and advice about available insurance coverage to meet the customer’s needs
- where the customer adequately describes their situation, the onus is on the insurance broker to review the customer’s insurance needs and provide the full coverage requested and
- should an uninsured loss nevertheless occur, the insurance broker will be liable unless it points out the gaps in coverage to the customer and provides advice on how to protect against those gaps.”
Regarding points b and c, the court implements the “but for” test, which means that “there must be a demonstration that but for the defendant’s negligent behaviour, the plaintiff’s damages would not have occurred.” In other words, the court must establish that the harm occasioned is related to the broker’s actions to hold the broker liable to the client for any damages or losses suffered.
Application of the Legal Principles to the Facts of this Case
In this case, the first criterion was easily established. There was “no question that Westland owed a duty of care to [the plaintiff] within the context of their insurance broker-customer relationship.” In respect of the second criterion, that the broker’s behaviour be demonstrated to have breached the standard of care, the court considered the fact that the plaintiff had never, before the accident, purchased excess UMP coverage on any of the 16 prior occasions during which he purchased insurance coverage from Westland. Moreover, the individual broker who had dealt with the plaintiff on the occasion in question testified that she had provided the plaintiff with the same information she would provide every client in his circumstances and that discussion of excess UMP coverage was a standard inclusion in such conversations. That employee proved to the court that the plaintiff had confirmed his desire to purchase Excess UMP coverage. He provided his initials on the insurance contract next to the words “No Excess UMP purchased on this Transaction.” The court applied the abovementioned standard of care, which it determined required that Westland offer and explain Excess UMP coverage to the plaintiff but did not demand that they encourage him to purchase it, and concluded that Westland had satisfied this standard. As such, the court concluded that there had not been any breach of the relevant standard of care.
Moreover, the court was not satisfied that Westland had caused any injury to the plaintiff, in that the answer to the question “but for the manner in which [Westland] advised [the plaintiff] regarding his UMP coverage options, would [the plaintiff] have purchased Excess UMP rather than being content with Basic UMP?”, was “no.”
The court was particularly convinced by the plaintiff’s historical demonstrations of independence and single-mindedness and the fact that he had declined Excess UMP coverage on 16 prior occasions. As the plaintiff had failed to prove elements two and three of his claim of professional negligence, his claim was dismissed.
Vancouver Lawyers Advising Clients On Professional Negligence Claims
If you are involved in commercial litigation, whether related to a claim of professional negligence, a business dispute, a real estate transaction gone awry, or a disagreement concerning construction or insurance coverage, you need knowledgeable legal assistance.
From our offices in downtown Vancouver, British Columbia, Meridian Law Group is proud to provide competent, capable, and helpful assistance for commercial litigation matters to British Columbians from all over the province. Contact Meridian Law Group online or by telephone at (604) 687-2277 to schedule a confidential consultation.
