Dinner And Drinks: BC Court Of Appeal Confirms Nightclub Accident Not Within Scope Of Professional Insurance

In what may be the final chapter of a very long and protracted legal proceeding, the British Columbia Court of Appeal recently issued its decision in Poole v Lombard General Insurance.1 This is a case that has captured the attention of the legal community across Canada both for the nature of the claim – an articling student suing an associate at her law firm for injuries suffered as a result of a fall at a night club after a firm sponsored dinner – and for the quantum of damages awarded – almost six million dollars in future wage loss. While the facts of this case should serve as a warning to employers that they need to be aware of potential liability for the acts of employees at non-traditional work functions, the appeal should also be of some comfort to insurers providing professional insurance to employers. In Poole v Lombard, the appellate court held that any connection, however tenuous, between the event where the act occurred and the employment, was not sufficient to engage coverage under the law firm's insurance policy. The policy, which was more broadly worded than many, did not extend to acts by an employee while out for impromptu drinks with co-workers after a employer sponsored dinner.

The accident on which this case is based, occurred over ten years ago on April 6, 2001, when an articling student struck her head on the floor after being knocked over by an associate of the firm while dancing at a local nightclub. At the time, the student and the associate were both part of a group of co-workers who had gone out for drinks after a dinner, sponsored by their law firm employer. The hearing of this matter was split into two separate trials. The first trial dealt with the accident itself, and the second trial dealt with insurance coverage. The appeal in Poole v Lambard, was in relation to this second trial.

At the first trial, the British Columbia Supreme Court found that the student had suffered a mild traumatic brain injury as a result of the accident on the dance floor and that she could no longer pursue her career as a lawyer. The court further held that the accident was caused solely by the negligence of the associate and awarded damages against the associate personally in the amount of $5,913,783.54. Notwithstanding this significant damage award, the associate had previously reached a settlement agreement with the student on the basis that he would pay $1,050,000, the limits on his home owners insurance policy, and agree to...