Last year we reported on Northbridge General Insurance Corp v Ashcroft Homes-Capital Hall Inc, in which Justice Perell gave a primer on insurance appraisals in Ontario. (See our prior post here.) In a recent decision, the Ontario Court of Appeal has confirmed the lessons from that case.
Desjardins General Insurance Group v Campbell, 2022 ONCA 128, confirms that the purpose of the appraisal process under the Insurance Act is to provide an easy, expeditious and cost-effective means for the settlement of valuation issues under insurance policies. The process is intended to be collaborative. However, if the appraisers appointed by the parties cannot agree on a compromise, they appoint an umpire with the sole authority to decide. The umpire must be impartial, but the appraisers need not be. That requirement was eliminated from the Insurance Act in 1966. As such, the general practice of insurance companies to appoint their employees, and of insureds to appoint their lawyers, is perfectly fine.
Ultimately, the constraint on appraisers is practical, rather than legal: “the process creates incentives for the parties to present reasonable valuations to the umpire to maximize the prospect that theirs will be chosen.”
Christiaan Jordaan is a Partner at Theall Group LLP and assists clients to resolve various commercial disputes, with a focus on appellate advocacy, class actions, judicial review and insurance matters. He also handles competition, employment and some insolvency litigation. He has appeared at the Supreme Court of Canada, all civil levels of court in Ontario, before the Federal Court and the Federal Court of Appeal, as well as private arbitrations. He is an experienced trial and appellate lawyer.
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