Case Summary: It is difficult for an insurer to dispute priority having agreed to accept priority
Insurer not entitled to dispute priority having agreed to take priority over the payment of accident insurance benefits.
Insurance law – Accident and sickness insurance – Priority coverage – Arbitration – Enforcement of award – Insurer – Rights, duties and liabilities
Pembridge Insurance Co. v. Sovereign General Insurance Co.,  O.J. No. 6590, 2019 ONSC 7291, Ontario Superior Court of Justice, December 16, 2019, J. Kimmel J.
Pembridge appealed from the award of an arbitrator pursuant to which Pembridge was found to be the insurer responsible to pay statutory accident benefits to an insured as a result of having agreed to take over the priority for her claims.
Pembridge asserted it was entitled to dispute its obligation to pay the insured, having complied with all of the prescribed requirements for raising a dispute and making an application for arbitration and there being no express prohibition in the regulations against an insurer that has agreed to accept priority later disputing its obligation to do so. Sovereign sought to uphold the arbitrator’s findings that when Pembridge accepted priority, an agreement was formed that could not be unilaterally withdrawn, and the existence of that agreement provided a sufficient basis on which to find that Pembridge was the insurer responsible to pay the accident benefits.
The court dismissed the appeal finding the arbitrator’s findings were reasonable. Those findings were based on an assessment of the facts and the application of well-established arbitral jurisprudence concerning the binding effect of an insurer’s acceptance of priority, absent exceptional circumstances that did not exist in this case.
This case was digested by Cameron B. Elder, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Cameron B. Elder at firstname.lastname@example.org.