Court Of Appeal Endorses Draconian Deterrent To Insurance Fraud

• Jurisdiction: Canada
• Published date: 23 March 2023
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Criminal Law, Insurance Laws and Products, Court Procedure, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Bennett Jones LLP
• Author: Ms Christine A. Viney, Daniel Morrow and Lana Thorhale (Articling Student)
• topic: Contracts,Insurance Law,Civil Procedure

In Abbas v Esurance Insurance Company of Canada, 2023 ABCA 36 [Abbas], the Alberta Court of Appeal endorsed what it described as draconian consequences for insurance fraud as consistent with the Insurance Act, RSA 2000 c I-3 and necessary to further the underlying purpose of the legislation. Specifically, the Court confirmed the longstanding rule that all claims under a single insurance policy stemming from one incident are void if the insured commits fraud, even if the fraud is material to only a portion of the claim.

Background

The Plaintiff, Mr. Abbas, was injured in a motor vehicle accident with an uninsured driver. He sought coverage under his own policy through his insurer, Esurance Insurance Company of Canada [Esurance]. The policy provided Accident Benefits [Section B] coverage and included an SEF 44 family protection endorsement. Mr. Abbas asked Esurance to provide him with income replacement benefits under Section B and to indemnify him for the amounts he was legally entitled to recover from the uninsured driver who was at fault for the accident under the SEF 44 coverage.

In investigating the claim, Esurance discovered that Mr. Abbas had falsified the employment records he submitted to substantiate his Section B claim. Mr. Abbas had told Esurance that he was employed for a specific period of time when he was not, had lied to the adjuster and had provided a false employer's...