Can an Insurance Appraiser be Liable in Negligence?

In the recent BC Supreme Court case of Ivarson v. Lloyds, the Court refused summary dismissal of a negligence claim against an appraiser who had carried out a statutory appraisal contemplated under British Columbia's Insurance Act.  The Court directed that the matter should proceed to a full trial.

The reported decision deals with applications by the Insurer (Lloyds) and by the Appraiser (a public adjuster appointed by the insureds) for summary dismissal of the respective claims against them.  Having gone through half a dozen lawyers, the insureds were now representing themselves in the litigation.  The quantum of the claim had been determined by the statutory appraisal process and the insurer had paid all amounts determined to be due under the policy.  The insureds attempted to have the appraisal set aside.  But, the court ruled, in the "absence of any fraud, collusion, bias, or disqualification by reason of interest or lack of impartiality", the appraisal process was binding on all parties and could not be set aside.  The claim against the insurer was, therefore, summarily dismissed.

However, in an interesting twist, the insureds had also sued their own appraiser claiming he was "negligent or, alternatively, in breach of contract, in the manner that he conducted the appraisal on the insureds' behalf."  The Court ruled that, although the appraisal award was still binding on the parties, the issue of the appraiser's liability was less clear and warranted a full trial.

The Appraiser cited various cases in support of the argument that appraisers are immune from liability claims arising from their conduct in the course of an appraisal.  But the Court decided the authorities were NOT conclusive in this regard:

It may be that an appraiser does indeed enjoy immunity against a claim for damages in negligence or breach of contract for his or her actions in an appraisal process. [However], I am not satisfied . . . that this is the case. I recognize the basic administrative law principle upon which the defendant's contention rests, namely that negligence in the exercise of a quasi-judicial statutory power will not generally give rise to liability.  I do not understand that principle to be immutable.  The more the quasi-judicial power being exercised resembles the discharge of a public law function, the less likely it is  that those who discharge such a power will be liable for damages based on negligence or breach of contract. On the other hand, the more the quasi-judicial statutory power resembles a private activity, the less likely it is that immunity from suit will follow.  It appears to be settled law that an appraiser acting under the Insurance Act is not performing as an arbitrator, but rather is performing the function of a valuer.  The distinctions between arbitrators and valuators and the impact those distinctions have on their liability [is yet to be determined]."

Insurable Interest Subscribers who would like to read the decision in full can access the Reasons for Judgment on the BC Superior Court website. Those interested in learning more about the appraisal process can also review an article on the subject on the Clark Wilson insurance website at or can direct any questions they may have to Nigel Kent at 604.643.3135 or npk@cwilson.com.