When an insurer suspects an insured was intoxicated while causing damage to the insured’s automobile, but a criminal conviction is not obtained, the insurer must diligently build its case and gather compelling evidence to be able to exclude coverage for physical damage.
Background
Section C of the Alberta Standard Automobile Policy Form #1 permits insurers to deny coverage for physical damage caused to the insured’s automobile while the insured operates it in a state that leads to a criminal conviction for impaired driving.[1] If a criminal conviction is not ultimately obtained, insurers may also exclude coverage if the insured was operating the automobile “while under the influence of intoxicating liquor or drugs to such an extent as to be for the time being incapable of the proper control of the automobile” (Incapability Exclusion).[2]
Due to the Supreme Court of Canada’s 2016 decision of R v Jordan, criminal cases of all kinds are increasingly being stayed due to delay. R v Jordan sets maximum time limits of 18 months for provincial court trials and 30 months for superior court trials.[3] When charges are stayed, or when an accused is acquitted of impaired driving, insurers are forced to rely on the Incapability Exclusion. However, proving that the insured was “incapable of proper control” is very difficult. The insurer must gather compelling evidence.
The burden on the insurer is onerous
The burden on the insurer to prove incapability at the time of a motor vehicle accident (MVA) is onerous. Mere evidence of impairment is not sufficient. Evidence must demonstrate that the insured was so intoxicated as to be incapable of properly controlling the automobile.
Somewhat paradoxically, it is possible that an insured could drive while impaired (pursuant to the Criminal Code), but could still be deemed by a civil court to be capable of “proper control,” pursuant to the Incapability Exclusion and the case law that interprets it.
Proving incapability of proper control
While an insurer can easily exclude Section C coverage if the insured is convicted of impaired driving, there are no guarantees this option will be available. If an insurer suspects that an insured caused damage for which it may be liable under Section C while driving under the influence, such that it may want to rely on the Incapability Exclusion, it must immediately start gathering evidence to discharge its burden of proof.
The insurer must gather evidence with respect to two key points:
- The nature of the MVA; and
- The level of intoxication of the insured.
The nature of the MVA
If the nature of the MVA was unremarkable, in that it is consistent with an MVA caused by a sober driver, an insurer will not likely be successful in proving incapability due to intoxication, even in the face of evidence going to the level of the insured’s intoxication. The nature of the MVA and the insured’s manner of driving, if known, must ideally be of a bizarre nature.
In Jasman v Wawanesa Mutual Insurance Co., the Court found the nature of the MVA to be “unremarkable,” in that it could have occurred “due to momentary negligence as much as [the insured’s] general inability to drive properly.”[4]
Similarly, in R & M Drywall Inc. v Co-operators General Insurance Co., the Court concluded that the MVA in that case was “more consistent with a last-minute decision and neglect than incapability”.[5]
The courts in both Jasman and R & M held that the driver was not incapable of proper control, despite relatively strong evidence of intoxication. In some cases, the nature of the MVA will be self-evident. For instance, if an insured collides with a parked vehicle, comes to a resting position, then decides to resume driving and collides with multiple other parked vehicles before leaving the scene, this is the type of MVA that intuitively points to extreme intoxication of the driver, and hence an inability of proper control. Evidence of witnesses to such a series of events would be highly persuasive. In less obvious cases, expert evidence may be required to demonstrate that a sober driver would have responded to driving conditions differently than the insured for which the insurer wants to exclude coverage.
The level of intoxication of the insured
This type of evidence centres on the appearance of the driver, the results of any breathalyzer or physical sobriety tests (and any expert evidence thereon), and the conduct of the driver subsequent to the MVA.[6] The evidence of attending law enforcement officers is helpful but not determinative. The insurer should also seek to corroborate observations of the insured’s level of intoxication through independent lay witnesses. If there are breathalyzer or other sobriety test results, the insurer must be mindful that even if these indicate that the insured was criminally impaired, they are not conclusive proof of incapability of proper control.
When to deny liability and when to indemnify the insured
Where a criminal conviction is not obtained, the insurer must evaluate whether it has evidence that is sufficiently compelling to prove incapability of proper control. Jasman indicates that the nature of the MVA is key. If the nature of the MVA is unremarkable, it may not matter what other evidence the insurer has of the insured’s intoxication level. In Jasman, the insured was not found to be incapable, despite the relatively strong evidence of the attending RCMP officer:
The officer spoke with [the insured] and noted her to have slurred speech, droopy eyelids, and slow blinking. When asked for her driver’s license she produced her social insurance card, realized her mistake, then produced another card that was not her license, again realized her mistake and kept looking. … [the officer suspected that the insured] might be under the influence of alcohol so she made a demand for a breath sample into a roadside screening device. [The insured] complied with the request and based upon the result of that she was arrested for impaired driving and directed into the back of the police vehicle. While doing so, she stumbled and slipped awkwardly into the back seat. The officer could see no obvious reason for this. As the officer drove [the insured] to the RCMP detachment, the smell of alcohol permeated the interior of the police vehicle. The officer determined that it was coming from [the insured’s] breath.[7]
The available evidence must be thoroughly evaluated in determining whether to deny claims in these circumstances. For more information, please contact Robert Gilroy or another member of Dentons’ Insurance Group.
[1] Alberta SPF #1, section C, exclusion (1)(g)(ii). When the insured drives or operates the automobile “while in a condition for which he is convicted of an offence under section 253 of the Criminal Code (Canada) or under or in connection with circumstances for which he is convicted of an offence under section 254 of the Criminal Code (Canada).”
[2] Alberta SPF #1, section C, exclusion (1)(g)(i).
[3] 2016 SCC 27.
[4] 2017 ABPC 106 at para 57 [Jasman].
[5] 2009 ABPC 312 at para 58 [R & M].
[6] R & M at para 20.
[7] At paras 4-5.
