Jury Trial

The present law, as decided in Ontario, is that either party, typically the plaintiff, may elect to have the case tried by jury. Given the awards made for mental distress damages for breach of a “peace of mind” contract, as discussed subsequently, this offers tremendous leverage for a plaintiff’s case against an unfair insurer.

A 1999 decision of Reilly J. was the first such case to allow for jury notice.[1] The submission made by the insurer to strike the notice was based on the argument that the “pith and substance” of the claim was declaratory relief, even though the claim did not directly seek such a remedy.

The relief sought by the plaintiff did not involve a claim for future long term disability benefits beyond trial for which declaratory relief would be required. The jury notice was allowed to stand.

The Court did add that had the action sought a declaration for future entitlement, this would not have necessarily been dispositive of the outcome of the motion.

Choice of Law Clause

The Saskatchewan Court of Appeal considered this issue in its 2015 decision.[2]

The policy issued by Zurich Life Insurance contained a term which limited the resolution of all disputes to Swiss law. The court accepted the general premise that the contracting parties were free to choose such law as may apply between them. That, however, raised the issue as to the impact on a non-party beneficiary. The wording of the clause considered only differences between the immediately contracting parties and did not deal with the claims of beneficiaries. For that reason, it was determined that such a clause did not bar the plaintiff’s claim.

The factors to be considered in the application of this test were also considered in the same case.  The facts were far from routine and are referenced below, as relevant. The court determined that the most substantial connection was Swiss law. The analysis was as follows:

1. Domicile and residence of the parties. This case was unusual as the plaintiff lived in Portugal. The head office of the company was in Switzerland, which is not particularly distinctive.
2. Where the claim arose. In this case, the injury occurred in a mine in Kyrgystan, to which he commuted on a rotational schedule from Portugal;
3. Where the contract was performed. Here the claim was administered from Switzerland.
4. The “style” of the contract. The policy was described as part of the “Swiss Foreign Portfolio” and the choice of law term states Swiss law.
5. Where the contract was made. No decision was made on this issue due to conflicting testimony.
6. Other factors. The premiums and benefits were expressed in Canadian dollars, but payable in Switzerland.

This argument was advanced by Zurich to avoid a punitive damage claim as Swiss law did not allow for such claims. The Court of Appeal allowed for an exception on public policy grounds to allow for punitive damages, even after having accepted Swiss law.

[1] Ramm v Sun Life

[2] in Branco v AIG & Zurich Saskatchewan Court of Appeal